Untitled Texas Attorney General Opinion

. - Hon. 3. Byron Saunders opinion No."S468 Casualty.Insurance Commissioner, Casualty Insurance Division Re: Construction of Chapter Board of InsuranceCommissioners 117, Adts of the'54th Austin 1, Texas ,, :.Legislature, 1955,(Senate Bill 15); *as-to whether county mutual msurance .companiesmay write lia- "abilityinsurance on auto- Dear Mr. Saunders: mobiles. You have askedfor the opinion of this office~as. to whether county.mutual ~insurancecompanies organized.under Chapter 17 of the Te~xasItisurayzeCode can write Bodily ... Injury and Propertg.Damage Liability Insurance eon automo- biles after the effective~date of Senate Bill 15 @&s&d by the 54th Legislature, 1955. The purnoses.set out by Article 17.01 of the Texas Insurance Code,&gsl, are a'8follovs: "County Mutual Insurance,CompanFes are companies organized for the purpose of insur- ance on the mutual or cooperative plan against loss or damage by~fire, lightning; gas explo- sion, theft, windstorm and hail, and for all or either of such purposes. "Unless they are restricted by their char- ters, they may write insurance against,said hazards: ., "(a) On both rural and urban dwellings and attendant outhous.esland yard buildings and' all their contents for home and personal use -- including family vehicles, musical.instruments and libraries; "(b) On barns and other farm, dairy, truck garden, hennery and ranch buildings and improve- ments of every description; Hon. J. Byron Saunders, page 2 (S-168) "(c) On all vehicles, harness, imple- ments, tools and machinery of every kind and description used on and about farms, truck gardens, dairies, henneries or ranches; "(d) On all fruits and products, other than growing crops, and all fowls, domestic animals and livestock of every description, produced, raised, grown, kept or used on truck .' gardens, henneries, farms, ranches.and dai'ries; and n church houses, county school housei(e) country ' lodge rooms and country recre- ation ialls, other than road houses and public dance halls and their contents." The first paragraph above defines a county mutual insurance company and sets out the type of physical damage The paragraphs following numbered (a), ,~designate those things on tihich'this be written by a county mutual insur- ance company. This Article is not amended by. Senate ~Biil 15 of the 54th Legislature. Section l~of Article ~17.25, Texas Insurance Code, 1951, should be next consideredin determiningan answer to your question. Section1 of said Article~has been amended by S. B.~l5 by an addition to the present section, and as amended reads as follows: "Section 1. Regulation. County Mutual insurance companies operating Under the.Drbvi- sions of this-Chapter-shall be authorized'to write insurance against loss or damage from any hazard provided therein or,that any other fire or windstorm insurance company operatingin Texas may write on property described in Article 17.01 of this Chapter. County mutual insurance corn;- panies aualifyinR to write casualty lines for statewide operati~onmay write all lines of auto- mob ile insurance, Drovided that no such company shall assume a ,risk~'onany one hazard greater than five (5%) per cent of its assets. unless such ex- C." LThe underlined Dortion of Section 1 is ~that which has been added by S. B. 15L7 Hon. J. Byron Saunders, page 3 (+1@3). -:~~ Companies organized under Chapter 17..mus-tmain- tain at all ~times a free surplus,investedin .only those items required by Article 2.08 of~S.Ri 15;,as follows: : Art. 17.11 Financial Requirements and Imoalrment of Surplus. "(a) Not less than ,$25,000.00~~if,~]:the corn-~ pany is organized to write insurance locally 'in the oounty~of its domicile only; or "(b) No~t less.than ~$5O,OOO.OQ.ifthe. com- pany is organized to write insurance .in the oorrirtyof~its domicileeand anyadjoining.coun- ties only; ore" ':~y(c) Not-less than anamountequalto ~the. aggregate.of~the.minimumcapital~and ~minimum surplus requlred.of a:fire ~insurancecompany.by .._. Article 2.02 of this Code if such~company,is organi.zedto write insurance-in a county.other, ,. than the,county of.its-:domioileanddany adjoin- .: lpg~gounties within this State."~ ._, Under Article 17.22 of,S.B.,15, county mutuals are::.~ subject to Article 5.12 of the Texas Insurance Code, 1951. This article provides for a tax on gross motor vehicle insurance premiums. Article 5.01, Texas Insurance Code, 1951, defines,mofor vehicle or automobile ins~uranceunder~ Chapter 5, as follows:' ,' PI . . . "Motor vheicle nor automobile insurance as referred to in this sub-chapter shall be taken propelled vehicle, and in&ding also-every vehicle, trailer or semi-trailer pulled or towed by a.motor vehicle, but excluding every motor vehicle running only upon fixed rails or tracks. Workmen's Compensa- tion Insurance is excluded from the foregoing defini- tion and from the terms of this subchapter:Acts 1951, 52nd Leg.,ch. 491." Hon. J. Bryon Saunders, page 4 (S-168) Article 17.25 ~of'SenateBill 15 would provide that county mutuals are subjeot tomArticle 5:06 of theTexas Insur- ance Code, 1951, which provides for the policy forms to be. prescribed by the Board of Insurance Commissioners in writing automobile insurance as.defined in Chapter 5 of the 1951 Code. , 15 in regard to t'heamendment The caption t0,'~S.B. of Article 17.25 of the Texas Insurance Code, 1951, reads in part as follows': 1, . . . by amending Section I of Article 17.25 of the Code so.as to provide that in addition to lines heretofore authorized, county mutua~linsur- ante companies by quali~fgingmay write all lines of automobile insurance with limitations." It is clear ~froma treadingof the above:quoted portions of the Texas Insurance Code of 1951, as.well as those portions of S.B.:15 of.the@th Legislature,amending said Code, and~it is the opinion qf'this office, that a county mutual insurance companymeeting the requirements as set forth~therein may write~liability and property damage insurance coverage on automobiles in,addition to,- the physical damage coverage set out in Article 17.01 of the Texas Insurande Code of 1951. 2 .: SUMMARY ‘. : Underthe -provisionsof Chapter 117,:Acts of the 54th Legislature, 1955 (Senate Bill-ls), county mutual insurance companies may write liability insurance on automobiles. APPROVED: Yours very truly, '. Jo.-.Fred Jones ~,,~ 'JOHN,~BEN.'SREPPRRD State Affairs Division .'~Attorney'General .ofTexas J. A. Amis, Jr. Reviewer .By.R~obertO.-Fagg." Davis Grant As~sistant : Reviewer'~ Robert S..Trotti First Assistant John Ben Shepperd Attorney Generals