- 

THEATIY~RNEY GENERAL 

OFTEXAS 

Honorable George B. Butler, Chalrman 

Board of Insurance Commissioners 

Austin 14, Texas 

Dear Sir: Opinion NO. O-6995 

Re: Whether the purpose clause of the 

Reserve Loan Life Insurance Cornpang of Texas is sufficient to enable it to write workmen's compensation insurance and a related 

question. 

Your request foran o 

letter dated December 14, t 

inion of this department, by 

19 5, presents the following questions: 

"In view of letter opinlons from your Department 

of March 16, 1938 and December 6, 1938, copies of which 

are attached for your ready reference, we assume that 

a life, health and accident-company incorporated under Chapter 3, Title 78 may, with appropriate purpose 

clause in its chapter, write workmen's compensation 

insurance. Please confirm or correct me as to this. 

"If you 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: 

"'The purpose for which this corporation Fs 

formed is to engag~e in 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 incorporated under 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 

found under 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 shall be 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 transacted by any company which 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-fifth Legislature, Chapter~l03, enacted the Workmen's Compensation Law, Title 130, Revised.Civll 

Statutes, providing in part 4, Section 2, (Art. 8309, Sectlon 

2, R.C.S.), as follows: 

"Any insurance company, which term shall Include 

mutual and reciprocal companies, lawfully transacting a 

liability or accident business In this State shall 

have the same right to Insure the llabilitg and pay 

the compensation provided for'in part 1 of this law 

and when such company issues a policy conditioned to 

pay such compensation, the holder of such policy sha~ll 

be regarded as a subscriber so far as applicable uhder this law, and when such company Insures such payment of compensation it shall be 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 company may have- and 

exercise all of the rights and powersconferred by this 

law on the association created hereby, but such rights 

and powers shall not be exercised by a mutual ore reclprocal organization unless su,ch organization hasat 

least fifty subscribers who have not less than 2,000 

employes."' 

The term "acc~ident business' as used In the foregoj.ng 

statute,ls broad, and it is not believed the Legislature, in 

designating a company by its insurance business, usedthe word 

in a limited or quallfglng sense, that is, confined to strictly 

contracts of Indemnity. Nowhere In the statutes do we find 

any definition of "liability" insurance~~or "accident" Insurance. Article 4716 specifies the kind and characterof acEdFdent insurance business sufficient to denominate a company 

an accident insurance company, viz: "doing business under 

any charter involving the payment of money or other thing of 

value, conditioned upon the injury, disablement or death of 

persons resulting from travel or general accidents by land or 

water." 

It Is therefore the opinion of this department that 
Honorable George B. Butler, page 3 0 -6995 

such companies as the one in questlon, incorporated under 

Chapter 3, Title 78, Revised Civil Statutes, lawfully doing 

an accident Insurance buslness, 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~to atithbrlze such company to write-workmen's 

compensation insurance as provided under 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 compromising a tax suit irrvolvlng a'reciprocal exchange. The letter oplnlon of December 6, 1938, ijertaltis solely to a company operating under the 

Lloyd's Plan and was written in response to an fnquiry as to 

what kind of Insurance ,Fs includea within the terms "lleb'~llty'~ 

insurance", Article 5015, Sudblvlslon 3, RbvIsed Civil Statutes. 

These insttiments do not relate to or effect the above questions propounded; consequently we find It unnecessary to dlscuss them. 

This opfnion Is not to be construed as applicable ,to 

limited capital stock companies authorized under 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 Commfttee By sdswB Chairmen