Honorable Ned Price                         Opinion No. M-954
Chairman, State Board of Insurance
1110 San Jacinto                            Re: Whether S.B. 31, Acts 62nd
Austin, Texas    78701                          Leg., R. S. 1971, Ch. 100
                                                p. 843, “The Texas Catastrophe
                                                Property Insurance Pool Act, ”
                                                requires that reciprocal  or
                                                inter-insurance  exchanges be
                                                members of the Texas Catas-
                                                trophe Property Insurance
Dear Mr. Price:                                 Association?

        You have requested   an opinion from this office on the following ques-
tion:

           “Does S. B. 31, Acts 62nd Leg., R. S. 1971, Ch. 100
        p. 843, known as the ‘Texas Catastrophe Property Insurance
        Pool Act’, require that reciprocal or inter-insurance exchanges
        be members of the Texas Catastrophe Property Insurance
        Association?”

        Three separate Acts of the Regular Session of the 62nd Legislature,
1971, must be considered in answer to your question.   They are, first:
Senate Bill No. 31, Chapter 100, page 843, known as the “Texas Catastrophe
Property Insurance Pool Act” codified by Vernon as Article 5.54-1 of the
Texas Insurance Code, which was enacted to provide a facility for insurance
so that homeowners and other risks on the Gulf Coast and other areas
could obtain windstorm, hail and fire insurance.

        Section 4 (a) of this Act created the Texas   Catastrophe   Property
Insurance Association,    and reads as follows:

            “The Association which is hereby created shall consist
        of all property insurers authorized to transact property




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Honorable   Ned Price,   page 2       (M-954)



       insurance in this State, except those companies that are
       prevented by law from writing coverages available through
       the pool on a Statewide basis.    Every such insurer shall be
       a member of the Association and shall remain a member
       of the Association so long as the Association is in existence,
       as a condition of its authority to transact the business of
       insurance in this State.   Any insurer which ceases to be a
       member of the Association shall remain liable on contracts
       of insurance entered into during its membership in the
       Association to the same extent and effect as if its membership
       in the Association had not been terminated. ”

       Section 14 of Senate Bill No. 31 reads as follows:

           “All laws or parts of laws in conflict herewith are hereby
       repealed to the extent necessary to accomplish the purposes
       of this Act. ”

       Under Section 16 of Senate Bill 31, it became effective April 29,
1971.  Its final ,passage through both the Senate and the House was during
the month of April, 1971,

       Second: thereafter, the 62nd Legislature enacted Senate Bill 921,
which amended Senate Bill 31, and which reads as follows:

          “Section 1. S. B. 31, enacted by the Regular Session of
       the 62nd Legislature,  is hereby amended by adding Sections
       17 and 18 thereto, said sections to read as follows:

           ‘Sec. 17. This Act is hereby codified as Article   21.49
       of the Texas Insurance Code.

           ‘Sec. 18. This Act does not apply to farm mutual in-
       surance companies,    as defined in Article 16.01 of the
       Insurance Code, nor does it apply to any existing company
       chartered under old Chapter 12, Title 78, Revised Civil
       Statutes of Texas, 1925, repealed by Chapter 40, Acts of
       the 41st Legislature,  1st Called Session, 1929, Chapter 40. ’




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Honorable   Ned Price,   page 3        (M-954)



           “Section 2. The fact that S. B. No. 31 has been enacted
       by the Regular Session of the 62nd Legislature,    and the
       further fact that the codification herein directed and the
       exemptions herein contained should have been included in
       the original bill, create an emergency and an imperative
       public necessity that the Constitutional Rule requiring bills
       to be read on three several days in each House be suspended,
       and this Rule is hereby suspended; and that this Act take
       effect and be in force from and after its passage, and it is so
       enacted. ”

       This Senate Bill 921 passed the Senate on April 20, 1971, and the
House on May 21, 1971.    It was approved by the Governor on June 15,
1971 and was effective immediately.

       Third:   House Bill No. 636, which reads as follows:

          “Section 1. Article 19. 12, Texas Insurance     Code, as
       amended, is amended to read as follows:

          ‘Art. 19.12.     Exemption   from Insurance   Laws with
       Limitations

          ‘Reciprocal   or inter -insurance exchanges shall be exempt
       from the operation of all insurance laws of this State except
       as in this Chapter specifically    provided, ‘or unless reciprocal
       or inter -insurance exchanges are specifically     mentioned in
       such other laws. In addition to such Articles as may be made
       to apply by other Articles of this Code, reciprocal     or inter-
       insurance exchanges shall not be exempt from and shall be
       subject to all of the provisions of Section 5 of Article 1.10
       and of Article 1. 15 and of Article 1.16 and of Article 5.35 and
       of Article 5.36 and of Article 5.37 and of Article 5.38 and of
       Article 5.39 and of Article 5.40 and of Article 6.12 and of
       Article 8.07 of this Code. ’

          “Sec. 2. The importance of this legislation and the crowded
       condition of the calendars in both houses create an emergency
       and an imperative public necessity that the Constitutional Rule
       requiring bills to be read on three several days in each house
       be suspended, and this Rule is hereby suspended, and that


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Honorable   Ned Price,   page 4       (M-954)



       this Act take effect and be in force from and after its passage,
       and it is so enacted. ”

This House Bill 636 passed the House on May 6, 1971, and the Senate on
May 27, 1971.   It was approved on June 15, 1971, and became effective
immediately.

        House Bill 636, being the latest expression of the Legislature, will
prevail over any conflicting provisions in Senate Bill 31 and 921. Ex parte
De Jesus De La 0, 227 S. W. 2d 212 (Tex. Crim. 1950); Attorney General’s
Opinion No. V-990 (1950).

         It is noted in reading Senate Bill 31, that such bill does not spe-
cifically mention reciprocal    or inter-insurance  exchanges,   and we will
need to consider what effect House Bill 636, supra, exempting reciprocal
or inter-insurance    exchanges, would have as to whether or not reciprocal
or inter-insurance    exchanges are exempt from the provisions of Senate
Bill 31, supra, which states:

           “The Association which is hereby created shall consist of
       all property insurers authorized to transact property insurance
       in this State, except those companies that are prevented by
       law from writing coverages available through the pool on a
       Statewide basis.    ~ D. ”

        While   we find no Texas cases dealing with this particular point, the
case of Gisin   v. Farmers Automobile Inter-Insurance      Exchange, 219 Iowa
1373, 261 N.    W. 618 (1935) is persuasive.  In construing a statute similar
to House Bill   636, supra, that Court said:

           “The effect of this provision, section 9103, then,
       seems to be that the various provisions of the Code in
       reference to insurance are not applicable to insurance of
       the character claimed in this suit; that is, written by the
       defendant.   This provision in the statute, section 9103,
       then puts insurance in reciprocal   companies on an entirely
       different footing from insurance in other organizations.
       Whether this be wise or not, it is not for us to say. The
       Legislature of the State of Iowa has seen fit to create in
       this chapter an entirely different rule than is applicable to



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       other insurance organizations,    and wherever a restriction
       is placed by a law upon other insurance companies doing
       business,   such restriction does not apply to insurance
       written on this plan, unless it is specifically mentioned.
       . . . ” (at p. 620)

        In McCoy Undertaking Co. v. American Cas. & Life Co., 248 S. W. 2d
311 (Tex. Civ. App. 1952, error dism. ) the Texas Court passed upon a pro-
vision of the statute which exempted statewide mutual life, health, and
accident companies from other insurance laws, and stated:

            “The last sentence of Section 19, Article 4859f, under
       which statute appellee was organized and chartered,      was as
       follows: ‘. . . Except as herein expressly provided, no
       insurance law of this State shall apply to any corporation
       operating under this Act, and no law hereafter enacted shall
       apply to them unless they be expressly designated therein. ’
       This provision prevents other general or special insurance
       laws from applying to mutual companies,       such as the one in
       question, unless such general or special laws pertaining to
       insurance expressly designate they are to so apply. . . . ”
       ‘(at p. 313) (hmpnasis aaaea)

        Under the holdings in the above cases, it appears that the provisions
of Senate Bill 31, supra, are not applicable to reciprocal or inter-insurance
exchanges,   as such type insurance companies are on a different footing
than the other insurance companies and are not mentioned therein.

        As Senate Bill 31 which created the Catastrophe Property Pool, and
House Bill 636, which amended Article 19.12 of the Texas Insurance Code,
providing the exemption applicable to reciprocal     insurance companies,
were both enacted during the 1971 Regular Session of the Legislature,      we
must give effect to the intention of the Legislature   in so enacting them
whereby both Acts will stand to the extent that they may be harmonized.

         In the case of State v. Dyer, 145 Tex. 586, 200 S. W. 2d 813 (1947)
the Court in speaking on statutes enacted by the Legislature   at the same
session,   at page 817, stated:

          “The rule most helpful in the determination of the question
       presented in this case, is thus expressed in a very early


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Honorable   Ned Price,    page 6         (M-954)



        decision: ‘These statutes, being in pari materia,    and relating
        to the same subject, are to be taken together and so construed,
        in reference to each other, as that, if practicable,   effect may
        be given to the entire provisions of each.    . . . The object of
        the rule is to ascertain and carry into effect the intention of
        the Legislature,   and it proceeds upon the supposition that the
        several statutes relating to one subject were governed by
        one spirit and policy, and were intended to be consistent and
        harmonious in their several parts and provisions. ’ Neil1 v.
        Keese, 5 Tex. 23, 32, 33, 51 Am Dec. 746

            “The rule applies even though the statutes were enacted
        at different sessions of the legislature.  (Citations omitted)
        It applies with peculiar force to Acts passed at the same session.
        (Citation omitted) As to such Acts, it has often been held that
        the court, in seeking the legislative intent, will read them
        together as if they were embraced in one Act. (Citations omitted)”
        (Emphasis added. )

         When we apply these basic rules to the present situation, we find
that Senate Bill 31 requires “all property insurers” to be members of the
Pool, with no definition to the term “property insurers” but with a sub-
sequent general provision repealing those laws in conflict therewith. At
the same session,    the Legislature enacted House Bill 636 amending
Article 19.12, which continued the express provision that reciprocals        are
exempt from all insurance laws “except as in this Chapter specifically
provided, or unless reciprocal     or inter-insurance   exchanges are spe-
cifically mentioned in such other laws. ” We are of the opinion that the
only rational conclusion is that both laws are to be given effect, with the
result that Senate Bill 31 will require all property insurers other than
reciprocals  and those companies exempted by Senate Bill 921, supra, and
those companies prevented by law from writing coverages through the
pool to be members.      It is our opinion that in this way both Senate Bill 31
and House Bill 636 can be given effect and accordingly reconciled.

                                   SUMMARY

           Under the     provisions of H. B. 636, Acts of the 62nd Leg.,
        R. S. , 1971,    reciprocal  or inter -insurance exchanges are
        exempt from      the provisions of S. B. 31, Acts of the 62nd
        Leg., R. S.,      1971, “The Texas Catastrophe Property In-
        surance Pool     Act. ”

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Honorable    Ned Price,   page 7      (M-954)




                                      Atto       ,ky General   of Texas
                                             $
Prepared    by John H. Banks
Assistant   Attorney General

APPROVED:
OPINION COMMITTEE

Kerns Taylor, Chairman
W. E. Allen, Co-Chairman

Bob Davis
Jim Swearingen
Fisher Tyler
Roland Allen

SAM MCDANIEL
Acting Staff Legal Assistant

ALFRED WALKER
Executive Assistant

NOLA WHITE
First Assistant




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