,     .




             THEA~ORNEY                  GENERAL
                          OFTEXAS




    Honorable J. N. Nutt                  Opinion No. C-287
    Commissioner of Insurance
    State Board of Insurance              Re:   Whether County
    Austin, Texas 78701                         Mutual Insurance
                                                Companies organ-
                                                ized and operating
                                                under Chapter 17
                                                of the Texas Insur-
                                                ance Code and quali-
                                                fied to write casualty
                                                lines for state wide
                                                operation may write
                                                all lines of automo-
                                                bile insurance on all
                                                motor vehicles in
                                                addition to those
                                                enumerated In Art.
                                                17.01, Texas Insur-
    Dear Sir:                                   ante Code.
          You have requested our answer to the following question:
             "Are County Mutual Insurance Companies which
          are organized and operated under Chapter 17 of
          the Insurance Code, quallfled to write casualty
          lines for state wide operation, authorlzed to
          write all lines of automobile Insurance only on
          those vehicles defined, enumerated or listed in
          Article 17.01 of the Code, or may such companies
          write all lines of automobile Insurance on all
          motor vehicles as that term is used or defined
          in Article 5.01 of the Code, specifically includ-
          ing taxicabs, long haul trucks and other motor
          vehicles used for commercial purposes or for hire?"
         Your request noted certain prior Attorney General's
    opinions which dealt with various facets of this general
    problem and are of assistance in answering this question.
    Attorney General's Opinion S-168, held that, by meeting
    the requirements of Art0 17.25, of the Texas Insurance Code,
    as amended, a County Mutual Insurance Company could write
    liability insurance on automobiles. This opinion dealt
    with the amendment found In Acts 1955, 54th Leg., Chap 117,

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Honorable J, N. Nutt, page 2 (c-287     )
                                                                   .<'

which was an extension of the specific authority found In
Art, 17.01of the Texas Insurance Code as to types of insur-
ance doverage available to County Mutual Insurance Companies.
Attorney GeneraPs Opinion NW-532, held that by matntainlng
a surplus of $225,OOO.OO, which is equal to'the minimum re-
quirement for stock companies writing similar lines of insur-
ance, county mutuals could write all lines of automobile
insurance. Your current request requires us to resolve the
question of whether the holding in Attorney General's Opinion
NW-532 included the authority to write all lines of insur-
ance on all automobiles or simply all types of coverage on
those vehicles enumerated in Art, 17.01.
     The salient facts covering the background and historical
development of County Mutual Insurance Companies are as follows:
        1. The financial requirements for the formation
     of County Mutual Insurance Companies were initially
     quite limited. Acts 1937, 45th Leg., Ch. 99.
        2,  The surplus requirements have   been strengthened
     until they are as stringent as those   imposed on
     stock companies writing all lines of   automobile
     Insurance state wide. Article 17,ll    (c), T.I.C.,
     as amended.

        3. In addition to the surplus requirements,
     a County Mutual Insurance Company Is prohibited
     from assuming a risk on any one~hazard greater
     than five (5%) per cent of its assets, unless
     au& excess shall be promptly reinsured. Art.
     17.25, Sec. 1, T.I.C.
        4   County Mutual Insurance,Companles are sub-
     ject'to the uniform automobile policy provisions
     of the Texas Insurance Code. Attorney General's
     Opinion NW-401.
     The authority of County Mutual Insurance'Companies to
write certain lfnes of insurance was originally stated In
Article 17.01 of the Texas Insurance Code. This authority
was broadened in 1955 to read as follows:
               County Mutual Insurance Companies
     qualifying to write casualty lines for State wide
     operation may write all linesof automobile In-
     surance. e D eU A t lo55 54th Le
     eh.,     8 37A, ~rt.~17:25: Sec. l,gTt.IY;l.
     (Emphasis added.)
                           i!
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Honorable J. N. Nutt, page 3 (C-,287    )


      Article 17.22 of'the Texas Insurance Code exempts County
Mutual Insurance Companies from the operation of all'other
insurance laws of'this State with certain exceptions. While
Art. 5.01 of the Texas Insurance Code Is not controlling In
determining the meaning of "all lines of automobile insurance,"
it is a legislative definition of the term "automobile lnsur-
ante a"
     Article 5.01 provides In part as follows:
        "Motor vehicle or automobile insurance as re-
     ferred to in this subchapter shall be taken and
     construed to mean every form of insurance on any
     automobile or other vehicle hereinafter enumerated
     and its operating equipment or necessitated by
     reason of the liability Imposed by law for damages
     arising out of the ownership, operation, mainten-
     ance, or use’ in this State of any automobile,
     motorcycle, motorbicycle, truck, truck-tractor,
     ;;a,;:;;,trac,tionengine, or any other self-propelled
              and including also every vehicle, trailer
     or semiirailer pulled or towed by a motor vehicle,
     but excluding every motor vehicle running only
     upon fixed rails or tracks. Workmen's Compensa-
     tion Insurance is excluded from the foregoing
     definition.'
     The term "automobile insurance" Is defined in 7 Tex.Jur.2d
228, Insurance Sec. 1, as follows:
        'For the,dual purpose of standardization and
     convenience,.the term 'automobile' is applied in
     a broad sense by automobile insurers. As used by
     such insurers, the term refers not only to passen-
     ger cars, but also to trucks, tractors, motor-
     propelled farm machinery, and various other types
     of motor vehicles. Furthermore, as thus employed
     the term sautomobile' is as comprehensive as the
     term 3motox vehicle.'"
     Automobile Is defined in Black's Law Dictionary, (4th
Ed., 1951), 169, as follows:
        "A vehicle for the transportation of'persons
     or property on the highway, carrying its ;wn motive
     power and not operated upon fixed tracks.
     In Couch on Insurance (2d Ed. 1959) Sec. 1x20, p. 49,
we find automobile insurance defined as:

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                                                           -   .




Honorable J. N. Nutt, page 4 (C- 287    )


         "Automobile insurance assumes various forms,
      such as liability, 'property damage, collision,
      fire, theft, transportation, et cetera. When the
      term is used without qualification, It is generally
      understood that liability Insurance or In other
      words, indemnity against liability for personal
      injuries or for losses sustained by reason of ln-
      juries inflicted as a result of the operation of
      the insured car, is intended."
     After study of the Texas Insurance Code and the above
mentioned definitions, we-are of the opinion, and you are
advised that since the Legislature placed no'restrlctlons
upon the term "all lines of automobile insurance," it is
to be given the fullest meaning, which Includes, but is not
restricted to, the definition found In Art. 5.01.
                           SUMMARY
         County Mutual Insurance Companies organized and
      operating under Chapter 17 of the Texas Insurance
      Code and qualified to write casualty insurance
      state wide, may write all lines of automobile ln-
      surance on all motor vehicles.
                                Yours very truly,
                                WAGGONER CARR
                                Attorney General of Texas




APPROVED:
OPINION COMMITTEE:
W. V. GEPPERT, Chairman
Joe R. Long
Ed Bolding
J. S. Braeewell
Paul Phy              >
APPROVED FOR TKE ATTORNEY GENERAL
BY:   Stanton Stone       L,1377
