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THEATIY~RNEY GENERAL
OFTEXAS
Honorable George B. Butler, Chalrman
Board of Insurance Commissioners
Austin 14, Texas
Dear Sir: Opinion NO. O-6995
Re: Whether the purpose clause of the
Reserve Loan Life Insurance Corn-
pang of Texas is sufficient to en-
able it to write workmen's compen-
sation insurance and a related
question.
Your request foran o inion of this department, by
letter dated December 14, 19t5, presents the following ques-
tions:
"In view of letter opinlons from your Department
of March 16, 1938 and December 6, 1938, copies of which
are attached for your ready reference, we assume that
a life, health and accident-company incorporated un-
der Chapter 3, Title 78 may, with appropriate purpose
clause in its chapter, write workmen's compensation
insurance. Please confirm or correct me as to this.
"If you answer to the foregoing is in the affir-
mative, please advise me whether the following'pur-
pose clause of Reserve Loan Life Insurance Company of
Texas is sufficient to enable it to write workmen's
compensation insurance:
"'The purpose for which this corporation Fs
formed is to engag~ein the buslness of life, health
and accident insurance, as authorlzed'by Chapter 3,
Title 78 o+fih+"flT;isedCivil Statutes of the State
of Texas.
Insurance companies incorporated under Chapter 3, Title
78, Revised Civil Statutes, are authorized for the purpose of
forming a life, health, and accident insuranc'ecompany. Article
4717, Revised Civil Statutes. The only expressed limitation
found under Chapter 3, Title 78 limiting the kind of Insurance
business to be written by a life, health, and accident Insurance
company is contained In Article 4738, adopted from an act of
1909, which Article provrdes:
- .
Honorable George B. Butler, page 2 o-6995
-~ "It shall be unlawful for any life insurance com-
pany, accident insurance company, life and accident,
health and accident, and life, health and accident ln-
surance company to take any kind of risks or is&e any
policies of insurance, except those of life, accident
or health; nor shall the business of life, accident or
health Insurance in this State be in any wise conduct-
ed or transacted by any company which in this or any
other State or country, is engaged or concern? in the
business of marine, fire, or inland Insurance.
In 1917, the Thirty-fifth Legislature, Chapter~l03, en-
acted the Workmen's Compensation Law, Title 130, Revised.Civll
Statutes, providing in part 4, Section 2, (Art. 8309, Sectlon
2, R.C.S.), as follows:
"Any insurance company, which term shall Include
mutual and reciprocal companies, lawfully transacting a
liability or accident business In this State shall
have the same right to Insure the llabilitg and pay
the compensation provided for'in part 1 of this law
and when such company issues a policy conditioned to
pay such compensation, the holder of such policy sha~ll
be regarded as a subscriber so far as applicable uh-
der this law, and when such company Insures such pay-
ment of compensation it shall be subject to the pro- -'
vlslons of parts 1, 2 and 4 and of sectlbns 10, 17, 18a
and 21 of part 3 of this law. Such company may have-and
exercise all of the rights and powersconferred by this
law on the association created hereby, but such rights
and powers shall not be exercised by a mutual orere-
clprocal organization unless su,chorganization hasat
least fifty subscribers who have not less than 2,000
employes."'
The term "acc~identbusiness' as used In the foregoj.ng
statute,ls broad, and it is not believed the Legislature, in
designating a company by its insurance business, usedthe word
in a limited or quallfglng sense, that is, confined to strictly
contracts of Indemnity. Nowhere In the statutes do we find
any definition of "liability" insurance~~or"accident" Insur-
ance. Article 4716 specifies the kind and characterof ac-
EdFdentinsurance business sufficient to denominate a company
an accident insurance company, viz: "doing business under
any charter involving the payment of money or other thing of
value, conditioned upon the injury, disablement or death of
persons resulting from travel or general accidents by land or
water."
It Is therefore the opinion of this department that
Honorable George B. Butler, page 3 0 -6995
such companies as the one in questlon, incorporated under
Chapter 3, Title 78, Revised Civil Statutes, lawfully doing
an accident Insurance buslness, may, by appropriate amendment
to Its charter, write workmen's compensation insurance.
As to the purpose clause of the company quoted in yoUr
letter and hereinabove set forth, It is our opinion that same
is insufficient~to atithbrlzesuch company to write-workmen's
compensation insurance as provided under Title 130, V.A.C.S.
We have reviewed the documentary copies attached to
your request, dated March 1.6and December 6, 1938, referred to
by you as letter opinions. The former relates solely to a
tax question, stating reasons for compromising a tax suit irr-
volvlng a'reciprocal exchange. The letter oplnlon of Decem-
ber 6, 1938, ijertaltis
solely to a company operating under the
Lloyd's Plan and was written in response to an fnquiry as to
what kind of Insurance ,Fs includea within the terms "lleb'~llty'~
insurance", Article 5015, Sudblvlslon 3, RbvIsed Civil Statutes.
These insttiments do not relate to or effect the above ques-
tions propounded; consequently we find It unnecessary to dls-
cuss them.
This opfnion Is not to be construed as applicable ,to
limited capital stock companies authorized under Article 4752,
R.C.S.
Yours very truly
ATTORNEY QEIPERALOF TEXAS
By s/urn.J. R. King
Wm. J:'R. King
Assistant
WJRK/JCP/wc
APPROVED JAN 25 1946
s/Grover Sellers
ATTORNEY GENERAL OF TEXAS
Approved opinion Commfttee By sdswB Chairmen