          THE    ATNBRNE:Y            GENERAL
                         OF?!hCXAS




The Honorable A. R. Schwartz          Opinion No. R-824
Chairman
Senate Committee on Jurisprudence     Re: Whether mobile homes
State Capitol                         may be insured under the
Austin, Texas 78701                   Texas Catastrophe
                                      Property Insurance Pool
                                      Act.
Dear Senator Schwartz:                          .
     You have requested our opinion regarding whether mobile
homes may be insured under the provisions of article 21.49
of the Texas Insurance Code, the TexaB Catastrophe Property
Insurance Pool Act. Specifically, you ask:
         1. Whether the State Board of Insurance
         may require members of the Texas Cataatro-
         phe Property Insurance Association to
         provide insurance for mobile homes in a'
         seacoast area;
         2. whether a mobile home is 'immovable
         property' for purposes of article 21.49;
         and
         3. whether, if the State Board of
         Insurance may require members of the
         Association to provide coverage, it may
         be provided at a special rate.
     Article 21.49 created the Texas Catastrophe Property
Insurance Association, composed of "all property insurers
authorized to transact property insurance in this State,
except those companies that are prevented by law from writing
coverages available through the pool on a Statewide basis."
Sec. 4(a). The temporary board of directors, made up of




                            p. 3477
The Honorable A. R. Schwartz - page 2, (H-834)


seven members, was directed to submit to the Board of Insur-
ance "for review and approval a proposed plan of operation."
Sec. 5(d). If the Association did not submit a plan satis-
factory to the Board prior to a certain date, the Board was
to write its own plan. Id. On May 10, 1973, the Board of
Insurance approved the Azciation's   "Revised Plan of Opera-
tion." Article I, section 2 of Part Four of the Revised
Plan provides that "'insurable property' shall not include
      any structure consisting, in whole or in part, of a
Aohie home." Thus, at present there is no question that
mobile homes are excluded from coverage under the Act.

     Article 21.49 empowers the "Directors of the Associa-
tion . . . subject to the approval of the Board [to] amend
the plan of oheration at any time." Sec. 5(d). In addition,
the Association is required, "in the absence of an appeal,"
to "adopt amendments to the plan proposed by the Board
within 30 days." Id. Thus, it appears that the Board may,
on its own initiatm,   amend the Plan of Operation and that
any such amendment is effective 30 days from its adoption
unless the Association employs the appeal procedure of
section 9. We believe, therefore, that the Board may amend
the Plan of Operation specifically to include mobile homes
within the definition of "insurable property,* unless some
portion of the statute prevents such action.
     "Insurable property" is defined by article 21.49 as

         immovable property at fixed locations
         in a catastrophe area or corporeal
         movable property located therein (as
         may be designated in the plan of
         operation) which property is determined
         by the Association, pursuant to the
         criteria specified in the plan of
         operation to be in an insurable condition
         against windstorm, hail and/or fire and
         explosion as appropriate, as determined
         by normal underwriting standards . . . .
         Sec. 3(f).
Thus, unless a mobile home may be classified as "immovable
property," the Board of Insurance is without authority to amend
the Plan of Operation to include it within the definition of
"insurable property." In our opinion, however, there are
instances in which a mobile home might be deemed "immovable

                          p. 3478
The Honorable A. R. Schwartz - page 3   (H-824)


property" for purposes of article 21.49. In'Capitol A
Inc. v. Walker, 448 S.W.2d 830 (Tex. Civ. App. -- Auat
--                                                     n,
                                                     -F=='
1969 writ ref'd n.r.e.1, the court considered whether a
mobile home could serve as the basis for a homestead exemp-
tion. The evidence indicated that

          the method used in placing [the] trailer
          on concrete blocks was the same as used
          by house movers who move and relocate
          entire houses. 448 S.W.2d at 832.
Rejecting the argument that the definition of "house trailer"
in the Penal Code had any bearing on the question of a house
trailer's eligibility for a homestead exemption, the court
concluded that the mobile home "ia aa physically attached
to the land as frame houses built on concrete blocks or cedar
posts." -Id. at 833, 035.
     Other states have adopted a similar view. In Ballard's
Inc. v. Evans, 241 So.Zd 557 ,(La.Ct. App. 1970], a Louisiana
courtTeldat     a truck body without wheels resting on con-
crete blocks that was not capable of being lifted by two
men and was intended to become a permanent part,of the
premises was an "immovable." 241 So.2d at 562. Likewise,
in Lafleur v. Foret, 213 So.2d 141 (La. Ct. App. 19681, the
court held sat a chicken brooder shed whose dimensions were
5 feet by 4 feet by 10 feet and which,could not be moved by
two men was an "immovable." 213 So.Zd at 150.
     The purpose of the Catastrophe Property Insurance Pool
Act is to 'provide a method whereby adequate windstorm, hail
and fire insurance may be obtained in certain designated
portions of the State of Texas," since "an adequate market
for [such] insurance ia necessary to the economic welfare of
the State of Texas." Sec. 1. On the basis of this declared
purpose, and the above cited decisions, we believe that the
Board is authorized to adopt a definition of "immovable
property" that would in certain instances permit the inclusion
of mobile homes within that definition. Although by virtue
of its expertise in this area the Board is best qualified to




                          p. 3479
The Honorable A. R. Schwartz - page 4 (H-824)


fashion its own definition, we believe that it should con-
eider such factors aa the size of the mobile home, its
degree of attachment to the land on which it is situated,
the presence or absence of wheels, and in particular, the
mobile home's degree of compliance with the "tie-down"
standards of the Mobile Homes Standards Act, article 5221f,
V.T.C.S.
     Your final question is whether, if the Board may require
members of the Association to provide coverage for mobile
homes, such coverage should be subject to a special rate
and whether the Association could create standards ~governing
eligibility for coverage under the rate established for
mobile homes. Article I, section 4, of Part Four of the
Plan of Operation provides that "the rates, rating plans and
rate rules applicable shall be those established pursuant to
Section 8 of the Act." Article 21.49, section 8(a), requires
the Association to
          file with the Board every manual of
          classifications, rules, rates . .
          every rating plan, and every modif%-
          tion of the foregoing which it proposes
          to use.
Section 8(c) authorizes the Board to "approve, modify,
or disapprove" such manuals of rates and classification.
Furthermore, under section 5A(a), the Board may
          [alfter notice and hearing . . . issue
          any orders which it considers necessary
          to carry out the purposes of this Act
          including, but not limited to, maximum
          rates, competitive rates, and policy forms.
Accordingly, we believe a separate rate structure may be
provided for mobile homes.




                         p. 3480
The Honorable A. R. Schwartz - page 5 (H-824)


                        SUMMARY
            The State Board of Insurance may
            require members of the Texas Cataatro-
            phe Property Insurance Association to
            provide insurance for mobile homes in a
            catastrophe area, provided a mobile home
            is properly classified as "immovable
            property." The Board may adopt a
            definition of "immovable property"
            that would in certain instances permit the
            inclusion of mobile homes within such
            definition. If the Board requires the
            inclusion of mobile homes within the
            Catastrophe Pool, it may further require
            that rates be established and classifications
            created in accordance with article 21.49,
            section 8, Texas Insurance Code.

                              - Very truly yours,



                                  Attorney General of Texas
APPROVED:                 w




Opinion Committee
jwb




                              p. 3481
