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        Hon. 3. Byron Saunders           opinion No."S468
        Casualty.Insurance Commissioner,
        Casualty Insurance Division      Re: Construction of Chapter
        Board of InsuranceCommissioners       117, Adts of the'54th
        Austin 1, Texas       ,,            :.Legislature, 1955,(Senate
                                              Bill 15); *as-to whether
                                              county mutual  msurance
                                              .companiesmay write lia-
                                             "abilityinsurance on auto-
        Dear Mr. Saunders:                    mobiles.
                  You have askedfor the opinion of this office~as.
        to whether county.mutual ~insurancecompanies organized.under
        Chapter 17 of the Te~xasItisurayzeCode can write Bodily ...
        Injury and Propertg.Damage Liability Insurance eon automo-
        biles after the effective~date of Senate Bill 15 @&s&d by
        the 54th Legislature, 1955.
                  The purnoses.set out by Article 17.01 of the
        Texas Insurance Code,&gsl, are a'8follovs:
                  "County Mutual Insurance,CompanFes are
             companies organized for the purpose of insur-
             ance on the mutual or cooperative plan against
             loss or damage by~fire, lightning; gas explo-
             sion, theft, windstorm and hail, and for all
             or either of such purposes.
                  "Unless they are restricted by their char-
             ters, they may write insurance against,said
             hazards:    .,
                  "(a) On both rural and urban dwellings
             and attendant outhous.esland yard buildings and'
             all their contents for home and personal use --
             including family vehicles, musical.instruments
             and libraries;
                  "(b) On barns and other farm, dairy, truck
             garden, hennery and ranch buildings and improve-
             ments of every description;
Hon. J. Byron Saunders, page 2 (S-168)


          "(c) On all vehicles, harness, imple-
     ments, tools and machinery of every kind and
     description used on and about farms, truck
     gardens, dairies, henneries or ranches;
          "(d) On all fruits and products, other
     than growing crops, and all fowls, domestic
     animals and livestock of every description,
     produced, raised, grown, kept or used on truck .'
     gardens, henneries, farms, ranches.and dai'ries;
     and
                 n church houses, county school
     housei(e)
             country
                '    lodge rooms and country recre-
     ation ialls, other than road houses and public
     dance halls and their contents."
          The first paragraph above defines a county mutual
insurance company and sets out the type of physical damage
                   The paragraphs following numbered (a),
                     ,~designate those things on tihich'this
                      be written by a county mutual insur-
ance company. This Article is not amended by. Senate ~Biil 15
of the 54th Legislature.
          Section l~of Article ~17.25, Texas Insurance Code,
1951, should be next consideredin determiningan answer to
your question. Section1 of said Article~has been amended
by S. B.~l5 by an addition to the present section, and as
amended reads as follows:
           "Section 1. Regulation. County Mutual
     insurance companies operating Under the.Drbvi-
     sions of this-Chapter-shall be authorized'to
     write insurance against loss or damage from any
     hazard provided therein or,that any other fire
     or windstorm insurance company operatingin Texas
     may write on property described in Article 17.01
     of this Chapter. County mutual insurance corn;-
     panies aualifyinR to write casualty lines for
     statewide operati~onmay write all lines of auto-
     mob ile insurance, Drovided that no such company
     shall assume a ,risk~'onany one hazard greater than
     five (5%) per cent of its assets. unless such ex-
     C."                                 LThe underlined
     Dortion of Section 1 is ~that which has been added
     by S. B. 15L7
Hon. J. Byron Saunders, page 3 (+1@3).    -:~~



         Companies organized under Chapter 17..mus-tmain-
tain at all ~times a free surplus,investedin .only those
items required by Article 2.08 of~S.Ri 15;,as follows:    :
         Art. 17.11 Financial Requirements and
     Imoalrment of Surplus.
         "(a) Not less than ,$25,000.00~~if,~]:the
                                              corn-~
     pany is organized to write insurance locally 'in
     the oounty~of its domicile only; or
         "(b) No~t less.than ~$5O,OOO.OQ.ifthe. com-
    pany is organized to write insurance .in the
    oorrirtyof~its domicileeand anyadjoining.coun-
     ties only; ore"
      ':~y(c) Not-less than anamountequalto    ~the.
     aggregate.of~the.minimumcapital~and ~minimum
     surplus requlred.of a:fire ~insurancecompany.by          .._.
     Article 2.02 of this Code if such~company,is
     organi.zedto write insurance-in a county.other,            ,.
     than the,county of.its-:domioileanddany adjoin-     .:
     lpg~gounties within this State."~            ._,
         Under Article 17.22 of,S.B.,15, county mutuals are::.~
subject to Article 5.12 of the Texas Insurance Code, 1951.
This article provides for a tax on gross motor vehicle
insurance premiums. Article 5.01, Texas Insurance Code,
1951, defines,mofor vehicle or automobile ins~uranceunder~
Chapter 5, as follows:' ,'
         PI
          . . .
         "Motor vheicle nor automobile insurance as
     referred to in this sub-chapter shall be taken




     propelled vehicle, and in&ding   also-every vehicle,
     trailer or semi-trailer 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 defini-
     tion and from the terms of this subchapter:Acts 1951,
     52nd Leg.,ch. 491."
Hon. J. Bryon Saunders, page 4 (S-168)


          Article 17.25 ~of'SenateBill 15 would provide that
county mutuals are subjeot tomArticle 5:06 of theTexas Insur-
ance Code, 1951, which provides for the policy forms to be.
prescribed by the Board of Insurance Commissioners in writing
automobile insurance as.defined in Chapter 5 of the 1951 Code.
                                       ,
                              15 in regard to t'heamendment
          The caption t0,'~S.B.
of Article 17.25 of the Texas Insurance Code, 1951, reads
in part as follows':
          1,
           . . . by amending Section I of Article 17.25
     of the Code so.as to provide that in addition to
     lines heretofore authorized, county mutua~linsur-
     ante companies by quali~fgingmay write all lines
     of automobile insurance with limitations."
          It is clear ~froma treadingof the above:quoted
portions of the Texas Insurance Code of 1951, as.well as
those portions of S.B.:15 of.the@th   Legislature,amending
said Code, and~it is the opinion qf'this office, that a
county mutual insurance companymeeting the requirements
as set forth~therein may write~liability and property
damage insurance coverage on automobiles in,addition to,-
the physical damage coverage set out in Article 17.01 of
the Texas Insurande Code of 1951. 2

                         .:    SUMMARY                     ‘.   :




          Underthe -provisionsof Chapter 117,:Acts
     of the 54th Legislature, 1955 (Senate Bill-ls),
     county mutual insurance companies may write
     liability insurance on automobiles.
APPROVED:                      Yours very truly,     '.
Jo.-.Fred
        Jones ~,,~             'JOHN,~BEN.'SREPPRRD
State Affairs Division        .'~Attorney'General
                                                .ofTexas
J. A. Amis, Jr.
Reviewer
                              .By.R~obertO.-Fagg."
Davis Grant                       As~sistant   :
Reviewer'~
Robert S..Trotti
First Assistant
John Ben Shepperd
Attorney Generals
