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                              E          QENET           GENE
                                       OF        EXAS
                                      Aus~liw   1% TEXAS


                                    September 11, 1961


        Honorable William A. Harrison           Opinion No. WW-1128
        Commissioner
        State Board of Insurance                Re:   Whether the relationship estab-
        International Life Building                   lished between the fire and casualty
        Austin 14, Texas                              company and the local recording
                                                      agent or between the sub-agent and
                                                      the general agent by certain con-
                                                      tracts would make such local re-
                                                      cording agents eligible to be
                                                      insured under a group life insur-
                                                      ance policy issued to the fire and
                                                      casualty company or to the general
        Dear Mr. Harrison:                            agent.

                Your opinion request inquiring whether local recording agents of a
        company, or the sub-agents of a general agent, may be eligible for group
        life insurance under a policy issued to the casualty company or to the general
        agent represented by said recording agents involves the interpretation of
        Article 3.50, Section 1 (1) (a) of the Insurance Code, which provides, in
        part, a* follows:

                        I,. . . The policy may provide that the term
               ‘employees’ shall include . . . the employees, indivi-
               dual proprietors,    and partners of one or more affiliated
               . . ., proprietors or partnerships if the business of the
               employer and of such affiliated . . . ~proprietors or
               partnerships is under common control through . . .
               contract, or otherwise. . . .”

                It is apparent that by the enactment of this amendatory language in
        1947 (Acts 50th Leg., ch. 208, H. B. 420, p. 366), the Legislature sought,
        through the expansion of the definition of “efiiployees, ” to enlarge the classi-
        fication of groups of persons legitimately entitled to the benefits of group
        insurance.    It is stated in Volume 39 of Texas Jurisprudence at page 258:

                      “In enacting an amendment, the Legislature is
               presumed to have intended to change the law, and a
Hon.   William A. I+rrison,   page 2   .(WW-1128)




        construction should be adopted that gives effect to
        the intended change, rather than one which renders
        the amendment useless. ‘I

        In construing the language of the statute here considered, we are
to be guided by those settled rules of statutory interpretation providing
that the primary consideration is the ascertainment of the legislative
intent, and that an act should be given a fair, reasonable, and rational
construction.

        The Legislature, while expanding the definition of “employees, ”
also incorporated significant limitations upon the groups permitted to be
covered by requiring that the entities set out in the statute be “affiliated, ‘I
and by requiring that the business of the employer and, the affiliated en-
tity be under common control, “through . . . contract or otherwise. ” In
imposing these requirements, the Legislature sought to insure that the
advantages of group insurance would be available only to closely knit
groups of persons, bound together in a common endeavor, whose interest
in securing such insurance would not be the prime motivating factor in
their association.

        We are of the opinion that the local recording agents and the com-
pany, or the sub-agents and general agent, are “affiliated” inasmuch as
they are associated for the purpose of placing insurance and work in close
connection to achieve that end. Further, it is apparent from the agency
contracts and bond forms submitted with your request that the business of
the agents and the employer is under common control with regard to the
insurance written for the particular company or under the particular gene-
ral agent. These elements of control are found in the contract provisions
requiring prompt remittances to the carrier or general agent, compliance
with rules and regulations promulgated by the carrier or general agent,
and the filing of certain reports required of the agents by the company or
general agent. Obviously, the expanded definition of “employees” and the
use of the language “through . . . contract or otherwise,” evidences the
intention of the Legislature not to require that degree of control normally
encountered in the ordinary employer-employee      relationship.

       In view of the foregoing,   it is our opinion that your question should
be answered affirmatively.
I   -




        Hon. William A. Harrison,   page 3    (WW-1128)




                                       SUMMARY

                       The relationship established between the fire and
               casualty company and the local recording agent or be-
               tween the sub-agent and the general agent by their agency
               contracts would make such local recording agents eligible
               to be insured under a group life insurance policy issued to
               the fire and casualty company or to the general agent.

                                              Yours very truly,

                                              WILL WILSON
                                              Attorney General of Texas



                                                   J+J,>hFa
                                              BY
                                                   Dudley D. McCalla
        DDM/lmc/pe                                 Assistant Attorney General

        APPROVED:

        OPINION COMMITTEE

        W. V. Geppert,   Chairman

        W. Ray Scruggs
        Elmer McVey
        John Reeves
        Ben Harrison

        REVIEWED FOR THE ATTORNEY            GENERAL

        BY:          Howard W. Mays
