                 TEE        A-JTORIQEY ~GE%YERAL
                                OF ?JYExAs
                                 AURm       l~(-rlilxb



                                   April   9, 1953


Hon. Garland A. Smith
Casualty Insurance Commissioner
Board of Insurance Commissioner~$
Austin 1, .Texas
                                                     Gpinion    No. S-28
                                                           .’
                                                     Re:~ Applicability   .of Sec. 35
                                                          of Art.’ 6701h. V.C.S., the
                                                          Assigned    Risk Plan. to a
                                                          casualty insurance      com-
                                                          pany writing ‘insurance
                                                          only on motor buses and
                                                          motor trucks holding mo-
                                                          tor carrier    permits from
Dear   Sir:                                               the Railroad    Commission.
                                                       ,:

                 You have iequested..our’opinion,as        tomthe: applicability    of
Section 35 of Article .6701h. Vernon’s        Civil,Statutes,    to a casualty insur-
ance company which confines itself to writings liability insurance               on cer-
tificated motor bus and motor truck carriers.~            Section35    of,Article    6701h
provides for the Assigned        Risk Plan, ,this-.section.,being a part of the Texas
Motor Vehicle Safety Responsibility         Act.    Pursliant~to that section, you in-
form us that the Board of Insurance Commissioners                approved a plan, ef-
fective January 1, 1952, calling foi’the assignment           of less~ attractive    risks
to casualty insurance        companies fin Texas;     The Tr’ansptiit Insurance’Com-
pany ,of Texas, a casualty ‘insuranc~e company which doesnot write liability
insurance     other than on certificated    ‘motor bus a& motor’truck          cdrriejr.s.
has,re,sisted    participation   in the plan and~thd~acce&nce         of risks assigned
to, it,under the plan, Andyyou therefore       ask, our opinion ,as tothe follciwmg
two questions:

                “( 1) Is the Transport   ,‘Insurance Company required ‘~
         to participate   in the plan even though it might provide no
         insurance    on motor vehicles    subject’to assignment under
         the Act. and

                  “(2) Must the Transport   Insurance’~Company   ac-     ”
         cept assignments     based on all of its Texas’motor  vehicle
         liability insurance   premi,ums or only those premiums      de-
         rived from m~otor ‘vehicles subject to the ‘~Motoi Vehicle
         Safety Responsibility    Act.*         .”
Hon.   Garland A. Smith, papc 2 (S-28)



               Your letter informs us that the Transport  Insurance Com-
pany of Texas is a casualty insurance? company, and under the Insurance
Code, such companies     are authorized to issue motor vehicle liability pal-
icies in the State of Texas.

                Sec. 35 of Art.. 6701h, V.C.S.,        provides,     in part,   as follows:

                  “Sec. 35. Subject to the provisions           of Section 9 of
         Article    4682b of Texas Revised         Civil Statutes, insurance
         companies      authorised   to issue motor vehicle liability pol-
         icies in this State may establish          an administrative       agency
         and make necessary        reasonable       rules in connection there-
         with, relative to the formation          of a plan and procedure          to
         provide a means by which insurance               may be assigned to an
         authorized     insurance company for a person required               by
         this Act to show proof of financial           responsibility     for the
         future and who is in good faith entitled to motor vehicle
         liability insurance     in this State but is unable to secure it
         through ordinary       methods; and may establish            a plan and
         pr,ocedure for the equitable apportionment              among such
         authorized     companies    of applicants      for such policies and
        ‘for motor vehicle liability policies.           including, but not lim-
         ited to, voluntary agreements          ,by insurance     companies       to
         accept such assignments.          WJren any such plan has been
         approved by the Board of Insurance              Commrssloners,        all
         msurance      cornnames authorxsed to rs,sue motor vehicle
         Eabrlity policies in the State of Texas shall subscribe
         fhereto and participate       there:&”       (Emphasis     supple      .
                                              -

                Since the ,Transport     Insurance   Company of Texas is au-
thorized to write liability insurance       on any motor vehicle, under the
clear and unambiguous       language emphasized       in the foregoing    section,
such company must subscribe          to and participate    in any plan apprwed     by
the Board of ~Insurance Commissioners,           regardless    of any~company pol-
icy it may have as to writing certificated        motor carriers     or preferred
or extra-hasardous      risks.   We, therefore,     answer ,your first question to
the effect.~that~if the Transport     Insurance ~Company of Texas is authorized
under its shader     to write liability insurance on motor vehicles          in Texas,
it is required   to participate   in the plan regardless      of the risks it may be
insuring   under its presently existing company policy.

                Your second question, however,     relates    to the assignsne;ht;~
of risks $o the Transport    Insurance Company of Texas.          You inquire
whether this should be based on the premiums         realized by the company
on certificated   motor carriers   or on motor vehicles      other than certifi-
cated motor carriers.     In answering   this question it is necessary      to call
to your attention the provisions    of Smec.33 of Art. 6701h, which provides,
in part, a’s follows:
Hon. Garland     A. Smith, page    3 (S-28)




             “This Act shall not apply . . . with respect to any
       motor vehicle which is subject to the requirements        of
       Articles   911a (Sec. 11) and 911b (Set, 13) of Texas Re-
       vised Civil Statutes; . . a R

             From your letter it appears that the Transport             Insurance Com-
pany is writing insurance       only on motor carriers        which have complied
with the provisions     of Art. 91la. Sec. 11. s.nd Art. 911b, Sec. 13, V.C.S., by
filing a bond or insurance       policy with the Railroad      Commission      in amounts
required   by the Commission.         This being true, the motor vehicles which
the company insures are clearly           exceptemi from the provisions       of Art. 6701h
by the unequivocal     language pointed out i:n Sec. 33. If such motor vehicles
are excepted from the provisions           of the Act, clearly    the premiums     real-
ized from liability insurance        on such motor vehicles        are likewise excepted
from the application      of the Act. The Board’of        Insurance Commissioners,
therefore,   under any plan of assigned          risks which it has approved,      could
not legally require     the assignment      of risks to a casualty insurance       com-
 pany predicated    upon premiums        realized    from certificated    motor carriers,
as such vehicles,     and any insurance        premiums    thereon, are excepted from
the operation    of the Act.    We therefore       answer your second question to the
 effect that the Board of Insurance Commissioners              may not approve a plan
 requiring  the assignment      of risks to a casualty insurance         company predi-
 cated upon premiums       realized    solely from certificated       motor bus and mo-
 tor truck risks.

               We further express   no opinion as to the constitutionality of ei-
ther   Sec.   35 of Art. 67Olh or of the plan approved by the Board thereunder.

                                     SUMMAR’I

              A casualty insurance  company authorized      under its
        charter to write motor vehicle liability insurance      is re-
        quired to subscribe   to and participate   in the Assigned
        Risk Plan provided for under Art. 6701h. Sec. 35, V.C.S.
        Such company may not be compelled        to accept risks pred-
        icated upon the premiums     realized by the company on cer-
        tificated motor bus and motor truck companies,        which have
        complied with Art. 911a. Sec. 11, V.C.S., and Art. 911b. Sec.
        13, V.C.S.

APPROVED:                                            Yours   very   truly,

C. K. Richards                                    JOHN BEN SHEPPERD
Reviewer                                             Attorney General

Willis E. Gresham
Reviewer

Robert S. Trotti                                        Ass&s&t‘
First Assistant

John Ben Shepperd
Attorney General
