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THEATIY~RNEY GENERAL OFTEXAS

Honorable George B. Butler, Chalrman Board of Insurance Commissioners Austin 14, Texas
Dear Sir: OpinionNO. O-6995 Re: Whether the purpose clause of the Reserve Loan Life InsuranceCornpang of Texas is sufficientto enable it to write workmen's compensation insuranceand a related question.
Your request foran o letter datedDecember 14, tinion of this department, by 19 5, presents the followingquestions:
"Inview of letter opinlons from yourDepartment of March 16, 1938 andDecember 6, 1938, copies of which are attached for your ready reference,we assume that a life, health and accident-company incorporatedunder Chapter 3, Title 78 may, with appropriatepurpose clause in its chapter,write workmen's compensation insurance. Please confirm or correct me as to this. "Ifyou answer to the foregoing is in the affirmative, please advise me whether the following'purpose clause of Reserve Loan Life Insurance Company of Texas is sufficient to enable it to write workmen's compensation insurance: "'Thepurpose for which this corporation Fs formed is to engag~ein the buslness of life, health and accident insurance,as authorlzed'by Chapter 3, Title 78 o+f

ih+"flT;ised

Civil Statutes of the State of Texas.
Insurance companies incorporatedunder Chapter 3, Title 78, Revised Civil Statutes, are authorized for the purpose of forming a life, health, and accident insuranc'e company. Article 4717,Revised Civil Statutes. The only expressed limitation foundunder Chapter 3, Title 78 limiting the kind of Insurance business to be written by a life, health, and accident Insurance company is contained In Article 4738, adopted from an act of 1909, which Article provrdes:- .

Honorable George B. Butler, page 2 o-6995

-~"It shallbe unlawful for any life insurance company, accident insurance company, life and accident, health and accident, and life, health and accident lnsurance company to take any kind of risks or is&e any policies of insurance, except those of life, accident or health; nor shall the business of life, accident or health Insurance in this State be in any wise conducted or transactedby any companywhich in this or any other State or country, is engaged or concern? in the business of marine, fire, or inland Insurance.
In 1917, the Thirty-fifthLegislature, Chapter~l03, enacted theWorkmen's CompensationLaw, Title 130, Revised.Civll Statutes,providing in part 4, Section 2, (Art. 8309, Sectlon 2, R.C.S.), as follows:

"Any insurancecompany,which term shall Include mutual and reciprocal companies, lawfully transacting a liability or accidentbusiness In this State shall have the same right to Insure the llabilitgand pay the compensationprovided for'in part 1 of this law and when such company issues a policy conditioned to pay such compensation,the holder of suchpolicy sha~ll be regarded as a subscriber so far as applicableuhder this law, and when such company Insures such payment of compensation it shallbe subject to the pro- -' vlslons of parts 1, 2 and 4 and of sectlbns 10, 17, 18a and 21 of part 3 of this law. Such companymay have- and exercise all of the rights and powersconferred by this law on the association created hereby,but such rights and powers shallnot be exercisedby a mutual orereclprocal organizationunless su,ch organizationhasat least fifty subscriberswho have not less than 2,000 employes."' The term "acc~ident business' as used In the foregoj.ng statute,lsbroad, and it is not believed the Legislature, in designating a companyby its insurancebusiness, usedthe word in a limited or quallfglng sense, that is, confined to strictly contracts of Indemnity. Nowhere In the statutesdo we find any definition of "liability"insurance~~or"accident"Insurance. Article 4716 specifies the kind and characterof acEdFdentinsurancebusiness sufficient to denominate a company an accident insurance company, viz: "doingbusiness under any charter involving the payment of money or other thing of value, conditionedupon the injury,disablement or death of persons resulting from travel or general accidentsby land or water."It Is therefore the opinion of this department thatHonorable George B. Butler, page 3 0-6995

such companies as the one in questlon, incorporatedunder Chapter 3, Title 78, Revised Civil Statutes, lawfullydoing an accident Insurancebuslness, may, by appropriate amendment to Its charter,write workmen's compensation insurance.
As to the purpose clause of the company quoted in yoUr letter and hereinabove set forth, It is our opinion that same is insufficient~toatithbrlzesuch company to write-workmen's compensation insuranceas providedunder Title 130, V.A.C.S.
We have reviewed the documentary copies attached to your request, dated March 1.6 and December 6, 1938, referred to by you as letter opinions. The former relates solely to a tax question, stating reasons for compromisinga tax suit irrvolvlng a'reciprocal exchange. The letter oplnlon of December 6, 1938, ijertaltis solely to a company operatingunder the Lloyd's Plan and was written in response to an fnquiry as to what kind of Insurance ,Fsincludeawithin the terms "lleb'~llty'~ insurance",Article 5015, Sudblvlslon 3, RbvIsed Civil Statutes. These insttimentsdo not relate to or effect the above questions propounded; consequentlywe find Itunnecessary to dlscuss them.

This opfnion Is not to be construed as applicable ,to limited capital stock companiesauthorizedunder Article 4752, R.C.S.
Yours very truly
ATTORNEY QEIPERAL

OF TEXAS By s/urn.

J. R. King Wm. J:'R. King Assistant WJRK/JCP/wc

APPROVED JAN 25 1946 s/Grover Sellers ATTORNEY GENERAL OF TEXAS Approved opinion CommftteeBy sdswB Chairmen