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Mr. Lyndon L. Olson, Jr. Opinion No. m-734
Chairman
State Board of Insurance Re: Whether an insurance carrier
1110 San Jacinto Boulevard m=Y consider completion of a
Austin, Texas 78701 defensive driving course under
article 6701d, section 143A.
V.T.C.S.
Dear Mr. Olson:
You ask several questions about the practice engaged in by some
insurance companies of considering the completion of a defensive
driving course as the equivalent of a conviction of certain mis-
demeanor offenses under article 6701d, V.T.C.S., the Uniform Act
Regulating Traffic on Highways. Your questions are:
1. Does article 6701d, section 143A, prohibit
insurers from considering completion of a defensive
driving course for underwriting purposes or does it
merely prohibit the charge from being considered by
a court in assessing punishment for subsequent
traffic citations?
2. If the statute prohibits the consideration
of completion of a defensive driving course for
underwriting purposes, would an insurer's con-
sideration of such completion violate the Deceptive
Trade Practices - Consumer Protection Act, Business
and Commerce Code section 17.46 and thereby allow
enforcement by the State Board of Insurance under
article 21.21, section 7 of the Insurance Code? If
not, would such an act violate other Insurance Code
provisions?
You advise that various insurance companies charge increased insurance
prices when an insured or a person seeking insurance takes a defensive
driving course in exchange for dismissal of a traffic citation under
section 143A of article 6701d.
Section 143A of article 6701d, V.T.C.S., provides:
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Mr. Lyndon L. Olson, Jr. - Page 2 (JM-734) i
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(a) When a person is cherged with e mis-
demeanor offense under this Act, other then a
violation of Section 51. committed while operating
a motor vehicle, the court:
(1) in its discretion may defer proceedings
end allow the person 90 days to present evidence
that, subsequent to the alleged act, the person
has successfully completed e defensive driver’s
course approved by the Texas Department of Public
Safety or other driving safety course approved by
the court; or
(2) shall defer proceedings end allow the
person 90 days to present written evidence that,
subsequent to the alleged act, the person has
successfully completed a defensive driver’s course
approved by the Texas Department of Public Safety
or another driving safety course approved by the
court, if:
(A) the person presents to the court en
oral request or written motion to take a
course ;
(B) the person has a valid Texas driver’s
license or permit; end
(C) the person’s driving record es main-
tained by the Texas Department of Public Safety
does not indicate successful completipn of a
driving safety course under this subdivision
within the two years immediately preceding the
date of the alleged offense.
(b) When the person complies with the pro-
visions of Subsection (a) of this section and the
evidence presented is eccepted by the court, the
court shall dismiss the charge.
When a charge is dismissed under this section,
the charge may not be pert of the person’s driving
record or used for any purpose, but the court
shall report the fact that a person has success-
fully completed a driving safety course and the
date of completion to the Texas Department of
Public Safety for inclusion in the person’s
driving record. The court shall note in its
report whether the course was taken under the
procedure provided by Subdivision (2) of Sub-
section (a) of this section for the purpose of -,
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Mr. Lyndon L. Olson, Jr. - Page 3 (JM-734)
providing information necessary to determine
eligibility to take a subsequent course under that
subdivision. (Emphasis added).
Resolution of your first question depends on whether the
underscored language in section 143A applies to insurance companies.
It has been suggested that the directive that “the charge may not be
pert of the person’s driving record or used for any purpose” applies
only to the courts. This language, however, is broad end is not, by
its terms, limited to the courts. Because the prohibition is somewhat
embiguous, its scope depends on the legislative intent behind the
phrase in question end behind the whole of section 143A.
Legislative intent is derived from a general review of en entire
enactment es well es from an examination of the circumstances existing
at the time of enactment, any “evil” to be corrected by the statute,
end the purpose to be accomplished by the statute. The legislature
added section 143A to article 6701d in 1975. Acts 1975, 64th Leg.,
ch. 738, et 2406. As originally enacted, the provision applied only
when the courts exercised their discretion to apply it. In 1979, the
legislature emended section 143A to require the courts to apply the
section to defendants who comply with the three requirements set forth
in subsections (a)(2)(A), (B), and (C) of section 143A. Acts 1979,
66th Leg., ch. 610, et 1359; see Attorney General Opinion NW-428
(1982) . The bill analysis to thisamendment notes that
[e]ven though [section 143A] is advantageous to
people in that it gives them en alternative to
traffic fines and raised insurance retes. the law
is only applicable to those persons whom the court
chooses to allow the benefit. (Emphasis added).
This language indicates that one of the primary purposes for the
alternative provided by section 143A is to prevent en increase of
insurance premiums.
It is significant that the bill also emended subsection (f) of
section 21 of article 6687b, V.T.C.S., the statute governing the
department’s jurisdiction over Texas drivers’ licenses, to provide
that the department may not release the reasons for the completion of
a driving safety course. The department may only release this
information to the courts for the purpose of determining eligibility
to take a subsequent course uuder section 143A. The fact that the
legislature restricted the access of all persons except. the courts to
the information indicates chat the legislature intended the
prohibition to apply broadly. Consequently, section 143A prohibits
insurers from considering a charge that is dismissed pursuant to
section 143A as pert of a person’s driving record and from using the
dismissal of the charge for “any purpose.”
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You also ask whether, if section 143A prohibits the consideration
of the completion of a defensive driving course under section 143A for
insurance purposes, such consideration violates the Texas Deceptive
Trade Practices - Consumer Protection Act, Business end Commerce Code
section 17.46, thereby allowing the board to prohibit the conduct
under article 21.21, section 7, of the Insurance Code. Secrion 7
authorizes the board to issue a cease end desist order against: persons
found , after a board hearing, to have violeted the unfair
competition/deceptive acts provisions of the Insurance Code or the
Deceptive Trade Practices - Consumer Protection Act. It should be
noted that the board does not hold the exclusive means to regulate the
legality of insurance practices. See Attorney General of Texas v.
Allstate Insurance Company, 687 S.Wx 803 (Tex. App. - Dallas 1985,
writ ref’d n.r.e.). Additionally, section 16 of article 21.21 of the
Insurance Code creates a private cause of action for treble damages
for injury from unfair or deceptive insurance practices (1) prohibited
in section 4 of article 21.21, or (2) rules lawfully adopted by the
Insurance Board under article 21.21, or (3) described in the Deceptive
Trade Practices - Consumer Protection Act as unlawful. See Royal
Globe Insurance Company v. Bar Consultants, Inc., 577 S.W.2d688, 691
(Tex. 1979).
Subsection (b) (12) of section 17.46 of the Business end Commerce
Code, the Deceptive Trade Practices Act, provides that the term
“f else, misleading, or deceptive acts or practices includes . . .
representing that en agreement confers or involves rights, remedies,
or obligations which it does not have or involve, or which are
prohibited by law.” (Emphasis added). As indicated, section 143A of
article 6701d, V.T.C.S.. prohibits insurers from considering the
completion of a defensive driving course under section 143A as pert of
a person’s driving record or for any other purpose. Consequently, the
practice could fell within et least one express prohibition of the
Deceptive Trade Practices - Consumer Protection Act. A violation of
the act necessarily depends on the facts in each case. See Royal
Globe Insurance Co. v. Bar Consultants, Inc., supra; Attorney General
Opinion JK-218 (1984).
Your final question is whether, if the practice in question does
not violate the Deceptive Trade Practices - Consumer Protection Act,
the practice violates other Insurance Code provisions. Because your
question is premised on a negative response to your inquiry about the
Deceptive Trade Practices - Consumer Protection Act, it is not
necessary to address it in full in this opinion. You should be aware,
however, that a number of Insurance Code provisions are implicated.
For example, article 5.09 of the code prohibits distinctions or
discrimination between insureds having like hazards. See also Ins.
Code art. 21.21, §4(7). Considering the completion of a defensive
driving course as the equivalent of a conviction for insurance
purposes raises discrimination questions.
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Moreover, article 5.01-l of the Insurance Code provides:
A rating plan promulgated by the State Board of
Insurance respecting the writing of motor vehicle
insurance, other than insurance written pursuant
to Section 35 [assigned risk plans] of the Texas
Motor Vehicle Safety-Responsibility Act (Article
6701h. Vernon's Texas Civil Statutes), may not
assign any rate consequence to a charge or convic-
tion, or otherwise cause premiums for motor
vehicle insurance to be increased because of a
charge or conviction for a violation of the
Uniform Act Regulating Traffic on Highways, as
amended (article 6701d. Vernon's Texas Civil
Statutes) .. (Emphasis added).
A full discussion of these provisions is beyond the scope of your
opinion request.
SUMMARY
Section 143A of article 6701d. V.T.C.S.. the
Uniform Act Regulating Traffic on Highways, pro-
hibits insurers from considering the completion of
a defensive driving course under section 143A for
the dismissal of a traffic citation as part of a
person's driving record for insurance purposes.
Subsection (b)(12) of section 17.46 of the Texas
Business and Commerce Code (the Deceptive Trade
Practices - Consumer Protection Act) defines as
unlawful an agreement that "confers or involves
rights, remedies, or obligations which it does not
have or involve, or which are prohibited by law."
Consequently, because consideration of a defensive
driving course is prohibited by section 143A of
article 6701d, V.T.C.S., it Is prohibited by
subsection (b)(12) of section 17.46 of the
Business and Commerce Code. Additionally,
considering the completion of a defensive driving
course under section 143A as the equivalent of a
conviction for insurance purposes raises dis-
crimination questions which implicate other
orovisions of the Insurance Code.
JIM MATTOX
Attorney General of Texas
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--Y
NARY KELLER
Executive Assistant Attorney General
JUDGE ZOLLIE STJUKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, Opinion Cormnittee
Prepared by Jennifer Riggs
Assistant Attorney General
.-
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