c - 

E QENET GENE 

OF EXAS 

Aus~liw 1% TEXAS 

September 11, 1961 

Honorable William A. Harrison 

Commissioner 

State Board of Insurance 

International Life Building 

Austin 14, Texas 

Dear Mr. Harrison: 

Opinion No. WW-1128 

Re: Whether the relationship established between the fire and casualty 

company and the local recording 

agent or between the sub-agent and 

the general agent by certain contracts would make such local recording agents eligible to be 

insured under a group life insurance policy issued to the fire and 

casualty company or to the general 

agent. 

Your opinion request inquiring whether local recording agents of a 

company, or the sub-agents of a general agent, may be eligible for group 

life insurance under a policy issued to the casualty company or to the general 

agent represented by said recording agents involves the interpretation of 

Article 3.50, Section 1 (1) (a) of the Insurance Code, which provides, in 

part, a* follows: 

I, 

. . . The policy may provide that the term 

‘employees’ shall include . . . the employees, individual proprietors, and partners of one or more affiliated 

. . ., proprietors or partnerships if the business of the 

employer and of such affiliated . . . ~proprietors or 

partnerships is under common control through . . . 

contract, or otherwise. . . .” 

It is apparent that by the enactment of this amendatory language in 

1947 (Acts 50th Leg., ch. 208, H. B. 420, p. 366), the Legislature sought, 

through the expansion of the definition of “efiiployees, ” to enlarge the classification of groups of persons legitimately entitled to the benefits of group 

insurance. It is stated in Volume 39 of Texas Jurisprudence at page 258: 

“In enacting an amendment, the Legislature is 

presumed to have intended to change the law, and a 
Hon. William A. I+rrison, page 2 .(WW-1128) 

construction should be adopted that gives effect to 

the intended change, rather than one which renders 

the amendment useless. ‘I 

In construing the language of the statute here considered, we are 

to be guided by those settled rules of statutory interpretation providing 

that the primary consideration is the ascertainment of the legislative 

intent, and that an act should be given a fair, reasonable, and rational 

construction. 

The Legislature, while expanding the definition of “employees, ” 

also incorporated significant limitations upon the groups permitted to be 

covered by requiring that the entities set out in the statute be “affiliated, ‘I 

and by requiring that the business of the employer and, the affiliated entity be under common control, “through . . . contract or otherwise. ” In 

imposing these requirements, the Legislature sought to insure that the 

advantages of group insurance would be available only to closely knit 

groups of persons, bound together in a common endeavor, whose interest 

in securing such insurance would not be the prime motivating factor in 

their association. 

We are of the opinion that the local recording agents and the company, or the sub-agents and general agent, are “affiliated” inasmuch as 

they are associated for the purpose of placing insurance and work in close 

connection to achieve that end. Further, it is apparent from the agency 

contracts and bond forms submitted with your request that the business of 

the agents and the employer is under common control with regard to the 

insurance written for the particular company or under the particular general agent. These elements of control are found in the contract provisions 

requiring prompt remittances to the carrier or general agent, compliance 

with rules and regulations promulgated by the carrier or general agent, 

and the filing of certain reports required of the agents by the company or 

general agent. Obviously, the expanded definition of “employees” and the 

use of the language “through . . . contract or otherwise,” evidences the 

intention of the Legislature not to require that degree of control normally 

encountered in the ordinary employer-employee relationship. 

In view of the foregoing, it is our opinion that your question should 

be answered affirmatively. 
I - 

Hon. William A. Harrison, page 3 (WW-1128) 

SUMMARY 

The relationship established between the fire and 

casualty company and the local recording agent or between the sub-agent and the general agent by their agency 

contracts would make such local recording agents eligible 

to be insured under a group life insurance policy issued to 

the fire and casualty company or to the general agent. 

Yours very truly, 

WILL WILSON 

Attorney General of Texas 

DDM/lmc/pe 

APPROVED: 

BY J+J,>hFa 

Dudley D. McCalla 

Assistant Attorney General 

OPINION COMMITTEE 

W. V. Geppert, Chairman 

W. Ray Scruggs 

Elmer McVey 

John Reeves 

Ben Harrison 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: Howard W. Mays