Eon. Joe P. Qlbbs, page 2 (V-1335)
applicable to intrastateor looal operations, Due to this
fact, you have been petitioned to order liability lnsuranae
on such vehicles regulated under the casualty rate lav,
which Is said to allow more flexibilityla gearing Ineur-
ante costs to the current experience of such oarriers by
enabling promulgationof more than one rating plan.
Specifically you aek whether such order is author-
lzed by the terms of Article 5.02 aaaed to the motor vehicle
rate Law by Ssnate Bill 431, Acts f1st Leg., R.S. 1949, oh.
462, p. 842/.
The motor vehicle rate law requires "rates of
premium . . . charged and collectedby all insurers writing
any form of insuranceon motor vehicles in this state" to
be fixed by the Board in accordancewith Its terms. It oov-
ers Insuranceon motor vehicles ussd by such carriers,
The casualty rate law authorizes the regulation
of rates foti""casualtyInsurance"and expressly excludes from
Its applicationa number of dealgnated types or kinds of in-
surance. “Motor vehicle" Insurance is among those expressly
excluded.
The amendatoryAct of 1949, upon which the whole
question turns, reads:
'An Act to authorize the further regulation
and supervisionof Automobile Insurance
and amending Chapter 253, Acts of the
40th Legislature,page 373, as amencled;
and declaring an emergency.
"Be it enacted by the Legislatureof the State of Texas:
“Se&Ion 1, That Chapter 253, Acts of the
40th Legislature,1927, as amended, also known
as Artiole 4682b, VernonIs Civil Statutes of
Texas, is hereby amended by adding thereto a new
section, to be known as Section lA, to be inserted
mdlately preceding Section 2, to read as follows:
"'SsotLonIA. There shall be excluded from
regulationuoder the provisions of this Act any
lasuraneeagainst liability for damages arising
out of the ownership,operation,maintenance or
use of or against loss of or damage to motor ve-
hfoles deecribed in the foregoing section which
Hon. Joe P. Gibbs, page 3 (V-1335)
may, In the judgment of the Commissioner, be
a type or class of Insurance which is also
the subject of or may be more properly regu-
lated under the terms or provisions of other
insurance rating laws heretofore or hereafter
enacted covering such insurance. If such sit-
UatiOQ shall be found to exist, then the Com-
missioner shall make an order declaring which
of the said rating laws shall be applicable
to such type or class of insurance, and to any
motor vehicle equipment mentioned in Section
1 of this law.1
"Sec. 2. The fact that the present auto-
mobile rating laws now in effect in Texas con-
tain some conflicts so that it Is difficult for
the administrative aUthOriti8S and the insurance
Industry to tell under which law a certain type
of Insurance or a certain type of property is to
be supervised or regulated, and the fact that It,
is highly desirable that some method for the com-
posing of these differences and conflicts be
vested in the adminiStrativ8 authorities, create
an emergency aAd an imperative public necessity
that the Constitutional Rule requiring bills to
be read on three consecutive days in 8aCh House
be, and said Rule is hereby suspended; and this
Act shall take effect and be In force from and
after Its passage, and it is so enacted."
In briefs submitted by interested parties it Is
argued on the one hand that Insurance against.liability for
damages arising out of the ownership, operation, mainte-
nance, or use of or against loss of or damage to motor ve-
hiCl8S IS neither "the subject Of" the Casualty rate law
nor is that law an "insurance rating law . . e covering
such insurance," as required by the amendment before such
an order is permitted. This argument Is based in the main
on the fact that the casualty rate law expressly excludes
'motor 98hlcle Insurance" from its ap lication. These par-
ties concede that the amendment of 19f 9 to the motor vehi-
cle rate law Is Intended to authorize the Board to order
regulation of certain forms of Insurance involving motor
vehicle and transportation operations under other Statutes,
but it is iQSist8d that the Board may so act only in spe-
cial Instances of uncertainty as to which of two or more
statutes apply, citing the "emergency clause' of the amen-
datory Act. Since motor vehicle Insurance is expressly
excluded from regulation under the casualty rate law, they
Hon. Joe P.,,Gibbs,page 4 (V-1335)
say that there is no "difference," "difficulty," "conflict,"
Or Similar uncertainty, within the meaning of the "emergency
clause,lIas to whether the kinds of Insurance here involved
should be supervised or regulated under the casualty or the
motor vehicle rate laws.
These parties also contend that to empower the
Board to choose some other statute under which to regulate
insurance as to some motor vehicles merely because the Board
concludes that such may be "more properly' regulated would
effect an unconstitutional delegation of legislative power
without a sufficient standard to guide the Board and an un-
constitutional delegation of power to suspend the motor ve-
hicle rate law.
It is argued, on the contrary, that such construc-
tion would render the amendment presently and practically
meaningless, since no other rating law covers 'motor vehicle
Insurance" as such. The construction urged is, in effect,
that the "Insurance" which must be the "subject of'lor
"covered by" such other laws is Insurance against loss or
damages resulting from accident to or injury suffered by any
person for which accident or injury the assured Is liable,
or insurance against loss or damage to an insured's proper-
ty. These parties argue that their construction Is consti-
tutional.
The 1949 amendment to the motor vehicle rate law
is clearly intended to authorize the Board of Insurance Com-
missioners to regulate certain motor vehicle insurance rates
under the provisions of other statutes. It says, in effect,
that any form of insurance covering liability of those in
charge of a motor vehicle or covering loss of or damage to
a motor vehicle shall be regulated under any other statute
regulating rates on insurance of the same "type or class"
when so ordered by the Board under the conditions stated.
The problem presented is, then, whether insurance against
liability for damages arising out of ownership, operation,
maintenance, or use of motor vehicles operating under permits
of the Interstate Commerce Commission Is a 'type or class of
insurance" which Is also the subject of or covered by the
casualty rate law.
Obviously,,at the time of the ameidment, no other
statute applied to motor vehicle insurance as defined In
the motor vehicle rate law, since the motor vehicle rate law
specifically covered Insurance on motor vehicles and its pro-
visions were therefore exclusive on the subject. Regulation
of rates on motor vehicle insurance as there defined was as
. .
Hon. Joe P. Gibbs, page 5 (V-1335)
certainly and effectively excluded from the provisions~of all
other rate statutes as it was from the casualty rate law, re-
gardless of an express exclusion. Consequently, the 1949
amendment must have been Intended to authorize the Board to
regulate rates thereon under other statutes applicable to
hazards or perils similar to those to which motor vehicle
owners and operators are exposed, and to repeal any express
or implied restrictions then in effect.
We have no doubt that Insurance against liability
for damages arising out of the ownership, etc., of motor
vehicles is a similar "type or class" of insurance to that
covered by the casualty rate law applicable to "casualty
insurancei" although the term "casualty insurance" is not
defined in the statutes. Your letter states that llablllty
insurance Is within the general category known as "casualty
insurance," and, since such phrase is a term used in the
statute in connection with the Insurance business, your in-
terpretation of its meaning is authoritative. Article 10
of Vernon's Civil Statutes provides that In construing civil
statutes "the ordinary signification shall be applied to
words, except words of art or words connected with a particu-
lar trade or subject matter, when they shall have the signlf-
icatl.onattached to them by experts In such art or trade . .'
We do not find the few available decisions discus-
sing the term "casualty insurance" to be particularly per-
tinent to a construction of the term as used in the casualty
rate law. That it includes the type of insurance in question,
however, is, In our opinion, established by an examination of
the insurance statutes. Chapter 8 of the new Insurance Code,
like Chapter 18 of Title 78 of the Revised Civil Statutes of
1925, is headed "General Casualty Companies." Organization
of corporations is there authorized to insure against, among
other hazards, loss or damages resulting from accident to or
Injury suffered by any person for which accident or injury
the assured is liable. See Article 8.01 ,&%n/- The term
is also defined in "Dictionary of Insurance Terms," published
by the Chamber of Commerce of the United States in 1949, as
'a class of insurance made up of a variety of subclasses,
principally concerned with Insurance against loss due to le-
gal liability to third persons . e .' Insurance against
liability arising from truck operations is clearly within a
general class of insurance dealing with responsibility of
the Insured to third persons for Injury and damage caused by
accidents and Is a form of "casualty insurance," as that term
Is used in the casualty rate law.
Having determined what we believe to be the clear
Hon. Joe P. GFbbs, page 6 (V-1335)
intent of the amendment of 1949, we do not consider an ex-
tended discussion of the emergency clause necessary. The
emergency clause may be looked to as an aid to construction
of a statute but it 'cannot be invoked for the purpose of
raising an ambiguity in the language of the statute.'
Llm Casualty Co. of New York v Lem, 62 S.W.2d 497, 499
error');
dism. narte Hayden, 215 S.W.
The effect of the 1949 amendment Is to modify the
exclusion of motor vehicle Insurance from regulation under
other statutes applicable to the same general 'type or
c lass" of hazards in cases where the Board concludes that
such insurance may be more properly rated under such other
statutes and orders regulation of rates thereunder. See
Urban v. Harris County, 251 S.W.594 (Tex. Civ. App. 1923,
error ref.), quoting Sutherland on Statutory Construction,
as follows:
"A new statute/which affirmatively grants
a larger jurisdiction, or power, or right, re-
peals any prior statute, by which a power, jurls-
diction, or right less ample or absolute has been
granted. 'If the exercise of a power granted by
a legislative act may include going beyond limits
fixed by a prior statute, such limit is impliedly
removed, at least so far as it conflicts with the
doing of that which is subsequently authorized."
We therefore conclude that the motor vehicle rate
law, as amended in 1949, authorizes the Board, upon a find-
ing that more proper regulation of rates on such insurance
can be accomplished under the casualty rate law, to order
regulation under the latter statutes.
We also conclude that Article 5.02 thus construed
is not unconstitutional as improperly delegating leglsla-
tive powers to make or suspend laws. The power here is to
apply one of several statutory systems to the specific
subject matter, which is the effect of the amendment regard-
less of which suggested construction Is adopted. Power to
regulate rates on insurance is commonly delegated to special
regulatory agencies who are broad discretion in re-
gard thereto. Article 5.60 authorizes the Board to
regulate Workmen's Compensation insurance rates. Discretion
is vested in the Board as to whether certain systems Of rat-
ing desl nated in the statute shall be promulgated. Article
5.01 L46[2b; Sec. u delegates power to the Board to approve
various systems of rating. The standards by which the Board
. .
Hon. Joe P. Gibbs, page 7 (V-1335)
IS to be guided are set out in the broadest terms. The
rates must be "just, reasonable and adequate." The stand-
ard set out in Article 5.14 L4698a, Sec. g is that "Rates
shall be reasonable, adequate, not unfairly discriminatory
and non-confiscatory as to any class of insurer."
The various insurance rate regulatory statutes
are all Intended to result In rates as to any particular
class of risk based on essentially the same considerations
and standards, so that, in the final analysis, alternatives
as allowed in any of these statutes are as to mechanics and
classification, It is not as if one rate law contemplated
a higher or lower average rate in relation to loss experi-
ence for the classes included than Is contemplated in another
rate law. The discretion authorized is as to the mechanics
and classification system by which the just rate is to be
determined. We see no essential difference in the discre-
tion vested by the amendment and that commonly vested in
rate regulatory statutes generally. No extended citation
of authorities is necessary to establish the constitutional
propriety of such delegation in connection with rate making.
In Daniel V* Tyrrell & Garth, Inv. Co,, 127 Tex. 213, 93 S.W.
2d 372, 375 (19x6), in upholding Article 1302a, V.C.S., em-
powering the Board to regulate title Insurance rates, the
court said:
"We think it is settled by the authorities
of this state that rate-making, as that term Is
applied to cases such as this, is a legislative
power, which can be delegated to a board or com-
mission, under proper safeguards; e D *"
And see Board of Insurance Commissioners v. Carter, 228 S.W.
2d 335 (Tex. Civ. App. 1950,'error ref. n-r-e.); State v.
Whitman, 196 Wis. 472, 220 N,W. 929 (1928); 1nsuran;;lgo. of
North America v. Welch, 49 Okla. 620, 154 Pac. 48 ( 1
State v. Howard, 96 Neb. 278, 147 N,W, 689 (1914); Hendeison
v. M&Laster, 104 S.C, 268, 88 S.E. 645 (1916); Aetna Ins. Co.
v. H de, 34 F,2d 185 (W.D. MO. 1929) affirmed in 281 U.S. 331
m&T
Hon. Joe P. Gibbs, page 8 (V-1335)
SUMMARY
Article 5.02 of the Insurance Code
authorizes the Board of Insurance Commis-
sioners to order regulation under Articles
5.13 through 5.24 of the Code, covering
"casualty insurance" rates, of public lia-
bility insurance rates on certain motor
vehicles used by motor aarrlers operating
in interstate commerce.
APPROVED: Yours very truly,
Jesse P. Luton, Jr.
Reviewing Assistant
Charles D. Mathews
First Assistant
NMc/rt