             THE   ATTORNEY          GENERAL
                       OF   TEXAS


                       April 8, 1988



    Mr. L. L. Bowman III            Opinion No. JR-889
    Commissioner
    Texas Savings and Loan          Re: Authority of the Savings
       Department                   and Loan Department to obtain
    2601 N. Lamar, Suite 201        liability coverage   for its
    Austin, Texas 78705             officers and employees
                                    (RQ-1203)

    Dear Mr. Bowman:

         You  ask  several    questions pertaining  to article
    6252-19a, V.T.C.S., and the Texas Tort Claims Act     (Civ.
    Prac. & Rem. Code §lOl.OOl et sea.).       Several of your
    questions relate to the scope of the attorney general's
    review of liability    insurance policies and any monetary
    limits on such policies.

         Article 6252-19a, V.T.C.S., authorizes state agencies
    which own and operate motor vehicles,       aircraft,  and
    watercraft to insure their officers and employees     from
    liability arising out of the use of such vehicles       or
    equipment.  V.T.C.S.  art. 6252-19a,   51.   The attorney
    general's  responsibility  in regard to this liability
    insurance is set out in section 1 of article   6252-19a as
    follows:

              Sec.  1 . . . All liabilitv insurance   so
           purchased shall be provided on a policy form
           or forms annroved by the State Board of
           Insurance as to form and bv the Attorney
           General as to liability.   (Emphasis added.)

         You ask first whether there
    limit on the amount of liability i~:u~~~c,"'~~=e~=ge'~~~~
    may be purchased   under this statute. Specifically,   YOU
    inquire about the applicability of the maximum liability
C   limits set by the Texas Tort Claims Act. In Attorney
    General Opinion M-501    (1969), this office addressed the
    issue of limitations   on the amount of coverage that the
    Texas Highway    Department was authorized     to purchase




                               p.   4351
Mr. L.L. Sowman III - Page 2   (JM-889)




pursuant to the   newly   enacted article   6252-19a.   That
opinion stated:

       With reference to your second question   as
       to the amount of coverage that may       be
       purchased, H.B. 203  [article 6252-19a] has
       provided no guidelines in this area.    The
       proper amount of coverage has been left to
       the sound discretion   of the governmental
       agencies involved, and in the event of a
       court test it is our view that a reasonable
       exercise of that discretion would be left
       undisturbed.

Attorney General Opinion M-501 (1969). Since the issuance
of Attorney  General Opinion M-501, there has been no
amendment to article   6252-19a establishing a statutory
minimum or maximum coverage level. Therefore, we conclude
that your department has the responsibility   to set the
level of coverage for its employees.

     Confusion may have arisen about the applicability of
the Texas Tort Claims  Act to article  6252-19a, V.T.C.S.,
based on other language found in Attorney General Opinion
M-501.  Following the language quoted above, the opinion
read as follows:

       In this connection we would point out that
       the Texas     Tort Claims    Act . . . limits
       governmental liability to $lOO,OOO.OO     per
       person and $300,000.00      for any    single
       incident.   It is our view that an individual
       policy of insurance under [article 6252-19a]
       that did not exceed those limits would meet
       the test of reasonableness, provided that in
       the exercise of discretion      the   Highway
       Department finds tha~t such is reasonably
       necessary.

We do not believe that the Texas Tort Claims Act controls
the amount of coverage which an agency may ob~tain under
article 6252-19a. The Texas Tort Claims Act establishes a
limited waiver of sovereign immunity and prescribes    the
maximum governmental liability  in certain circumstances.
Article 6252-19a, on the other hand, allows certain state
agencies to obtain liability insurance for employees under
certain conditions.  The reference to the Tort Claims Act
in the opinion quoted above was merely intended as a guide
or example to assist state agencies in making reasonable




                          p. 4352
Mr. L.L. Bowman III - Page 3   (JR-889)




determinations  of coverage.    To the extent that the
opinion may have been interpreted as imposing the Texas
Tort Claims liability  limitations onto article 6252-19a,
Attorney General Opinion M-501 is modified.

     To summarize,   article 6252-19a, V.T.C.S., does not
prescribe dollar   limits on insurance coverage purchased
pursuant to that article.      The liability limits esta-
blished in the Texas Tort Claims Act are not applicable to
article 6252-19a.

     You next     ask  whether the    attorney    general's
responsibility   to approve  insurance policies     "as to
liability"   requires the attorney general     to   make a
determination of the reasonableness    of the amount of
liability coverage purchased by a state agency. We think
not. The practice of the attorney general's office        in
reviewing policies pursuant to article 6252-19a has been
to determine whether a given state agency is authorized to
purchase insurance under the statute and whether        the
policy covers authorized persons and equipment.

     The attorney general's    policy of not attempting  to
determine the reasonableness of particular coverage limits
for a given agency is consistent with the earlier inter-
pretation of the statute in Attorney       General Opinion
M-501. The affected state agency, in the first instance,
must exercise   its discretion   in determining whether  to
purchase liability insurance and the amount of coverage it
deems appropriate.   A court, in the second instance,    is
the appropriate body to evaluate the reasonableness of the
limits obtained by a state agency. Unlike the state agency
or a court reviewing that agency's decisions, the attorney
general is not in a position to find facts regarding the
reasonableness of a particular amount of coverage.      The
amount of coverage that is reasonable may vary from agency
to agency and between individual departments    or sections
within the same agency.

     You also ask whether the attorney general       will
approve an insurance policy which provides, at no added
cost to the state, additional coverage      that is not
authorized by article 6252-19a. We understand that the
State Board of Insurance has not prescribed a specific
form for use by state agencies pursuant       to article
6252-19a. Rather, a state agency must use one of the
general forms for motor vehicle liability  insurance that
has been approved by the board for general commercial use
in the state. Consequently,    a state agency purchasing




                          p. 4353
Mr. L.L. Bowman 111 - Page 4   (JM-889)




liability insurance under the statute may     incidentally
receive other coverage.  Because no state funds are being
expended for this other coverage, this office neither        -,
approves nor disapproves this portion of the policy.

     Finally, you raise the possibility of your department
purchasing liability insurance under the Texas Tort Claims
Act and ask:    (1) whether the department would   receive
additional protection by also purchasing insurance under
article 6252-19a, V.T.C.S.;   and   (2) whether the State
Board of Insurance and the attorney general must review a
policy purchased by the department pursuant to the Texas
Tort Claims Act.   Section 101.027 of the Civil Practice
and Remedies  Code governs  liability insurance purchased
under the Texas Tort Claims Act. It provides in part:

          (a) Each governmental unit may purchase
       insurance policies protecting the unit and
       the unit's employees against claims under
       this chapter.

The Savings and Loan Department is a governmental unit as
defined by the Texas Tort Claims Act, and is covered by
section   101.027.   However, we note that the General
Appropriations Bill for the current biennium contains the
following provision:

          Sec. 54. TORT CLAIMS ACT. None of the
       funds appropriated   in this Act may      be
       expended  for the purpose of      purchasing
       policies  of   insurance   covering   claims
       arising under the Texas Tort Claims Act.

General Appropriations Act, Acts 1987, 70th Leg., 2d C.S.,
ch. 78, art. V, 554, at 1120. A similar restriction has
been included    in previous  appropriation    bills.  See
Attorney  General Opinion Nos. JM-625       (1987); JM-551
(1986); H-900 (1976).

     It is our understanding    that there are no funds
available to your department    that are not subject to
the restriction of section 54, article V, of the General
Appropriations Act. Therefore, we decline to address the
first pa* of your question. Assuming a state agency has
funds available for the purchase   of insurance under the    1

Texas Tort Claims Act, we have found no provision   in the
act which requires this office or the State Board of
Insurance to approve the purchase.




                         p. 4354
Mr. L.L. Bowman III - Page 5     (JM-889)




                       SUMMARY

            (1) Article 6252-19a, V.T.C.S., sets no
      maximum or minimum monetary coverage available
      to a state agency covered by the article.

            (2) The statutory limits of liability
      prescribed by the Texas Tort Claims Act do not
      apply to an insurance policy purchased by a
      state agency pursuant to article     6252-19a,
      V.T.C.S.

           (3) The attorney general does not review
      the amount of liability coverage purchased   by
      a state agency pursuant to article 6252-19a.

           (4) The current general appropriations
      act prohibits  the use of appropriated   funds
      for the purchase of insurance under the Texas
      Tort Claims Act. The attorney general does
      not have a statutory obligation     to review
      insurance purchased pursuant to the act.




                                 LL.JJJ
                                    Very truly yo
                                            .


                                    JIM     MATTOX
                                    Attorney General of Texas

MARY KELLER
First Assistant Attorney General

LOU MCCRFARY
Executive Assistant Attorney General

JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General

RICK GILPIN
Chairman, opinion Committee

Prepared by Karen C. Gladney
Assistant Attorney General




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