THEATTORNEY GENERAL
OF’ TEXAS
Hon. John Osorio, Chairman
Board of Insurance Commissioners
International Life Building
Austin, Texas
Opinion NO. W-56
Re: Whether a county mutual Insurance
company may write insurance on
risks in states other than Texas?
Dear Mr. Osorio:
You have requested our opinion on the following
question:
Way a county mutual insurance comfiany
write insurance on risks in states other than
Texas? It
In your opinion request you have called our atten-
tion to Article 17.16 of the Insurance Code. This section
of the Code was formerly Article 486Oa-20, Section 15, Ver-
non’s Civil Statutes, Acts 1937, 45th Legislature, page 184,
chapter 99, paragraph 15. The statute then read as follows:
“A county mutual insurance company may
write insurance (a) in any county adjoining
the county in and for which it is organized,
or (b) in any county in which no county mu-
tual insurance company has been organized,
or (c) anvwhere, if its reserve fund or pol-
icyholders contingent liability, or both such
reserve fund and contingent liability taken
together, exceed the sum of Fifty Thousand
($50,000.00) Dollars.f’ (Emphasis supplied).
The identical question you have propounded to us
was the matter of Attorney General’s Opinion No. T-729, dated
December 9, 1948, wherein it was concluded that a county mu-
tual insurance company with a reserve fund or policyholders
contingent liability, or both, taken together, in excess of
. Hon. JohnOsorio , ‘page ,,2.. f W-56)
:
$50,000~00, might write insurance outside of Texas. This
opinion was, of course, based upon the language of the stat-
ute as it was at that ,time. The opinion was bottomed upon
the use of the word ltanywher’e” In Subsection (c) + In enact-
ing the 1951 Code (Acts 1951, ,,~52ndLegislature, ;chapter 491))
the Legislature chose to leave the word, %anywhere,” in Sub-
section (cl, and incorporated what had been’ Section 15,~of Ar-
title 486Ca-20, Section 15,~,,J$&t,r,, into ,Jlrt1clgs,~,&7.16 and
16.07 of the Insurance Code .‘,‘~,.,_,~er,eafta~i.,m,~195$,, the,,Legis-
lature amended Chapter. 17 of ‘the Insuranc-e, Code.,,“: (Acts 1953.,
53rd Legislature, chapters 196,. ‘page 540)•:~‘Th~e:,amendatory
,
statute included a variety of’ changes lPiuiting”t4e operations
of county mutuals. ,AmendedArticle ~17.16prov&dedr
, ,~
“A county mutual ,innrance company possessed
of Ten Thousand ($lO,OO,O.OC) Dollars or more :in
surplus, as ~pr0vi~ded’i.n Article lT,ll;~ may%@.te. ~1.’
insurance ,in any county, adjoining ,the :caurity,,~,~in,~:r~,:..
;’
and for which it is organized; ‘and, suc4’Qo~~ #ny”
possessing as much &Twenty-fire ThQuaaW P$25,~~
000 -00) Dollars in such surplus may urlte~->Pr+:~ ~..~,
.” G3mp4’+~,,;,+lp+ :, ”
The amendment made three changes in, ‘the Ithan&&&-
ing law, i.e., \(l) requiring Ten Thousand ($lC@CO;OC) ,Dollars
or more, in sur’@us to ,wrlte insurance inan ,adjQinihg ,,COunty,
(2) requiring Twenty-five Thousand .~5,~OO’~OO),,Dollars,,surplus
to write insurance on a state-wide,,basis, and [3)‘~additioa of ~,
the words, “within this State” after the vord l&?&here.“.
The courts have, declared that ,the’ mere”‘&& that the
Legislature enacts an amendment indicates that it. thereby in-
tended to change the original Act by creati
withdrawing an existing oki@+ ‘1 Sutherland,
&&J p* 412; &&ren vi State, 82 Tex.Cri
811 11917) ; ,Ameri
166, 36 S.W.2d~71
It. is- within the power of ~the Legislature to prohibit
the insurance company from do’ing b~s~~~s,,,:MitSi,dd~the: State. If
the Legislature had not intended, by such amendment, to restrict
the activities of a county mutual insurance compa@y to doing I_
business within the State then the,phrase “withimthis State”
.,
Hon. John Osorio, page 3 &%56)
“The rule is elementary that we must give
some effect to changes in the words of legis-
lative acts, and must also construe their words,
so as to accomplish the legislative intent*”
The language in question contained in the 1953
amendment was not changed by the 1955 amendment of Article
17.16 (Acts 1955, 54th Legislature, page 413, chapter 117,
paragraph 36).
In the opinion request you direct our attention
to the provisions of Article 17.25, Section 1, of the In-
surance Code, which deals with the regulation of county
mutual insurance companies. The provisions of this subsec-
tion do not directly relate to t-he question you have asked
US¶ and are not controlling, inasmuch as Article 17.16 ’
specifically deals with the matter of the sphere of opera-
tion.
A county mutual insurance company may not
write insurance on risks in states other than
Texas.
Very truly yours,
WILL WILSON
Attorney General
i??%G&&g&*
BY
Wallace P. Finfrock
Assistant
WPF:wb
APPROVED:
OPINION COMMITTEE
H. Grady Chandler
Chairman