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    Mr. Lyndon L. Olson,   Jr.                      Opinion    No.   m-734
    Chairman
    State Board of Insurance                        Re:     Whether an insurance     carrier
    1110 San Jacinto  Boulevard                     m=Y     consider     completion    of    a
    Austin,  Texas   78701                          defensive      driving    course   under
                                                    article       6701d,    section     143A.
                                                    V.T.C.S.

    Dear Mr. Olson:

           You ask several       questions     about the practice      engaged in by some
    insurance      companies     of  considering      the completion       of a defensive
    driving    course      as the equivalent        of a conviction       of certain  mis-
    demeanor     offenses      under   article     6701d,  V.T.C.S.,     the Uniform    Act
    Regulating     Traffic    on Highways.      Your questions    are:

                     1.  Does article     6701d,    section    143A, prohibit
                insurers    from considering     completion    of a defensive
                driving   course for underwriting        purposes or does it
                merely prohibit      the charge from being considered         by
                a court      in assessing     punishment      for   subsequent
                traffic   citations?

                    2.   If the statute      prohibits      the consideration
                of completion       of a defensive        driving    course    for
                underwriting       purposes,   would      an insurer's       con-
                sideration     of such completion      violate    the Deceptive
                Trade Practices      - Consumer Protection        Act, Business
                and Commerce Code section         17.46 and thereby         allow
                enforcement      by the State Board of Insurance            under
                article    21.21,   section  7 of the Insurance        Code?     If
                not, would such an act violate           other Insurance     Code
                provisions?

    You advise   that various  insurance   companies charge increased       insurance
    prices  when an insured or a person seeking insurance        takes a defensive
    driving  course   in exchange   for dismissal   of a traffic    citation     under
    section  143A of article   6701d.

          Section   143A of   article    6701d,    V.T.C.S.,    provides:




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Mr. Lyndon L. Olson,      Jr.   - Page     2   (JM-734)                                     i



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                                                                                       1

               (a)  When a person       is    cherged  with e mis-
          demeanor   offense     under   this    Act, other then a
          violation   of Section    51. committed while operating
          a motor vehicle,     the court:

              (1)   in its   discretion     may defer     proceedings
          end allow    the person 90 days to present          evidence
          that,   subsequent   to the alleged       act,   the person
          has successfully      completed     e defensive     driver’s
          course   approved by the Texas Department of Public
          Safety   or other driving     safety  course    approved by
          the court;    or

              (2)    shall     defer    proceedings     end allow      the
          person    90 days to present         written   evidence   that,
          subsequent       to the alleged        act,  the person      has
          successfully       completed   a defensive    driver’s   course
          approved by the Texas Department of Public               Safety
          or another      driving    safety    course  approved   by the
          court,   if:

                    (A)    the person  presents   to the court                    en
               oral     request   or  written   motion  to take                    a
               course ;

                    (B)   the person        has   a valid    Texas     driver’s
               license    or permit;       end

                   (C)  the person’s     driving record     es main-
               tained by the Texas Department of Public         Safety
               does not indicate     successful   completipn      of a
               driving   safety  course    under this    subdivision
               within  the two years immediately      preceding     the
               date of the alleged    offense.

                (b) When the person       complies   with  the pro-
           visions  of Subsection     (a) of this section    and the
           evidence   presented   is eccepted     by the court,  the
           court shall dismiss     the charge.

               When a charge is dismissed              under this section,
           the charge may not be pert of the person’s                   driving
           record     or used for         any purpose,         but the court
           shall    report     the fact     that a person has success-
           fully    completed      a driving       safety     course    and the
           date    of completion         to the Texas           Department      of
           Public      Safety     for     inclusion        in    the  person’s
           driving      record.       The court        shall     note    in   its
           report     whether     the course        was taken under           the
           procedure       provided     by Subdivision            (2)  of   Sub-
           section     (a)    of this      section     for    the purpose       of     -,




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Mr. Lyndon L. Olson,          Jr.   - Page     3    (JM-734)




              providing        information    necessary     to            determine
              eligibility       to take a subsequent    course           under that
              subdivision.         (Emphasis added).

      Resolution      of   your     first      question    depends     on whether     the
underscored     language    in section      143A applies     to insurance    companies.
It has been suggested         that the directive        that “the charge may not be
pert of the person’s        driving     record    or used for any purpose”       applies
only to the courts.         This language,        however,   is broad end is not, by
its terms, limited       to the courts.        Because the prohibition     is somewhat
embiguous,     its   scope    depends     on the legislative        intent  behind    the
phrase in question       end behind the whole of section           143A.

       Legislative      intent     is derived     from a general     review of en entire
enactment es well es from an examination                 of the circumstances       existing
at the time of enactment,              any “evil”     to be corrected     by the statute,
end the purpose         to be accomplished          by the statute.       The legislature
added section        143A to article         6701d in 1975.       Acts 1975, 64th Leg.,
ch. 738, et 2406.           As originally       enacted,    the provision     applied     only
when the courts        exercised      their   discretion    to apply it.      In 1979, the
legislature      emended section          143A to require      the courts    to apply the
section     to defendants      who comply with the three requirements             set forth
in subsections        (a)(2)(A),       (B),   and (C) of section       143A.    Acts 1979,
66th Leg.,       ch.    610,     et 1359;     see Attorney      General    Opinion    NW-428
(1982) . The bill         analysis     to thisamendment       notes that

              [e]ven  though    [section    143A] is advantageous      to
              people  in that     it gives     them en alternative     to
              traffic  fines   and raised     insurance   retes. the law
              is only applicable      to those persons whom the court
              chooses  to allow the benefit.         (Emphasis added).

This   language    indicates         that    one of       the primary   purposes   for             the
alternative     provided     by      section    143A      is to prevent    en increase              of
insurance   premiums.

       It is significant           that the bill         also   emended subsection            (f)    of
section     21 of article           6687b,     V.T.C.S.,      the statute         governing        the
department’s        jurisdiction        over    Texas drivers’         licenses,       to provide
that the department may not release                  the reasons      for the completion             of
a driving        safety      course.       The department          may only        release        this
information       to the courts        for the purpose         of determining         eligibility
to take a subsequent             course    uuder section         143A.      The fact      that the
legislature      restricted       the access      of all persons         except. the courts          to
the     information         indicates        chat     the     legislature         intended         the
prohibition       to apply broadly.            Consequently,        section      143A prohibits
insurers      from considering           a charge       that    is dismissed         pursuant        to
section     143A as pert of a person’s              driving     record     and from using          the
dismissal     of the charge for “any purpose.”




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Mr. Lyndon L. Olson,           Jr.   - Page 4        (JM-734)


                                                                                                                 1


                                                                                                             ?

       You also ask whether,              if section       143A prohibits         the consideration
of the completion            of a defensive        driving      course under section            143A for
insurance        purposes,       such consideration            violates       the Texas Deceptive
Trade Practices            - Consumer Protection            Act, Business         end Commerce Code
section       17.46,       thereby    allowing       the board        to prohibit          the conduct
under article           21.21,     section      7, of the Insurance               Code.       Secrion    7
authorizes        the board to issue a cease end desist                     order against: persons
found ,       after        a board       hearing,         to     have      violeted        the    unfair
competition/deceptive              acts     provisions       of the Insurance             Code or the
Deceptive        Trade Practices           - Consumer Protection               Act.     It should      be
noted that the board does not hold the exclusive                            means to regulate         the
legality       of insurance         practices.          See Attorney         General      of Texas v.
Allstate       Insurance       Company, 687 S.Wx              803 (Tex. App. - Dallas               1985,
writ    ref’d     n.r.e.).       Additionally,         section     16 of article          21.21 of the
Insurance        Code creates        a private        cause of action           for treble       damages
for injury        from unfair       or deceptive        insurance      practices       (1) prohibited
in section         4 of article        21.21,     or (2) rules          lawfully      adopted by the
Insurance       Board under article            21.21,    or (3) described           in the Deceptive
Trade Practices             - Consumer Protection              Act as unlawful.              See Royal
Globe Insurance            Company v. Bar Consultants,               Inc.,     577 S.W.2d688,         691
(Tex. 1979).

        Subsection      (b) (12) of section        17.46 of the Business            end Commerce
Code,     the Deceptive         Trade     Practices      Act,     provides      that    the   term
“f else,    misleading,        or deceptive         acts   or practices          includes    . . .
representing        that en agreement         confers    or involves        rights,    remedies,
or obligations          which      it  does    not have or involve,               or which     are
prohibited      by law.”       (Emphasis added).          As indicated,        section    143A of
article      6701d,      V.T.C.S..      prohibits      insurers      from considering          the
completion      of a defensive        driving    course under section          143A as pert of
a person’s      driving     record or for any other purpose.                Consequently,      the
practice      could    fell    within     et least     one express       prohibition       of the
Deceptive      Trade Practices         - Consumer Protection           Act.     A violation      of
the act necessarily            depends      on the facts        in each case.          See Royal
Globe Insurance         Co. v. Bar Consultants,           Inc.,    supra;     Attorney    General
Opinion JK-218 (1984).

       Your final      question      is whether,      if the practice       in question      does
not violate      the Deceptive         Trade Practices         - Consumer Protection         Act,
the practice      violates       other Insurance         Code provisions.         Because your
question    is premised on a negative              response      to your inquiry       about the
Deceptive      Trade     Practices       - Consumer Protection              Act,    it    is  not
necessary     to address      it in full      in this opinion.          You should be aware,
however,     that a number of Insurance                Code provisions        are implicated.
For example,        article       5.09    of   the code        prohibits     distinctions       or
discrimination        between      insureds     having     like    hazards.      See also    Ins.
Code art.      21.21,     §4(7).       Considering       the completion       of a defensive
driving     course      as the       equivalent       of    a conviction        for    insurance
purposes    raises     discrimination        questions.




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Mr. Lyndon L. Olson,           Jr.     - Page 5       (JM-734)




      Moreover,    article           5.01-l    of   the Insurance    Code provides:

                A rating plan promulgated             by the State Board of
            Insurance       respecting     the writing      of motor vehicle
            insurance,        other    than insurance       written     pursuant
            to Section        35 [assigned      risk plans]      of the Texas
            Motor Vehicle          Safety-Responsibility         Act (Article
            6701h.    Vernon's        Texas Civil       Statutes),      may not
            assign any rate consequence              to a charge or convic-
            tion,     or      otherwise      cause     premiums     for     motor
            vehicle      insurance       to be increased        because     of a
            charge     or      conviction      for    a violation        of    the
            Uniform     Act Regulating          Traffic     on Highways,        as
            amended       (article       6701d.     Vernon's      Texas     Civil
            Statutes)     .. (Emphasis added).

A full    discussion      of     these        provisions     is   beyond   the   scope    of   your
opinion   request.

                                              SUMMARY

                Section       143A of article             6701d.    V.T.C.S..       the
            Uniform Act Regulating               Traffic      on Highways,        pro-
            hibits    insurers       from considering          the completion        of
            a defensive        driving      course under section            143A for
            the dismissal          of a traffic         citation      as part of a
            person's       driving       record     for     insurance      purposes.
            Subsection       (b)(12)       of section        17.46 of the Texas
            Business      and Commerce Code (the Deceptive                       Trade
            Practices       - Consumer Protection                Act)    defines     as
            unlawful      an agreement           that "confers          or involves
            rights,     remedies,        or obligations        which it does not
            have or involve,            or  which    are    prohibited      by law."
            Consequently,         because consideration             of a defensive
            driving      course      is prohibited          by section        143A of
            article       6701d,       V.T.C.S.,        it    Is    prohibited       by
            subsection          (b)(12)       of    section        17.46      of    the
            Business         and        Commerce         Code.       Additionally,
            considering        the completion         of a defensive          driving
            course    under section           143A as the equivalent              of a
            conviction         for     insurance        purposes       raises     dis-
            crimination           questions        which        implicate        other
            orovisions       of the Insurance           Code.




                                                           JIM      MATTOX
                                                           Attorney  General     of   Texas




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Mr. Lyndon L.     Olson,    Jr.   - Page 6          (JM-734)




                                                               --Y




NARY KELLER
Executive Assistant        Attorney     General

JUDGE ZOLLIE STJUKLEY
Special Assistant Attorney            General

RICK GILPIN
Chairman, Opinion     Cormnittee

Prepared    by Jennifer   Riggs
Assistant    Attorney   General




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