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### 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 andthe 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 ofa 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 thatthe 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.
. . .” Itis apparent thatby 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 ofpersons legitimately entitled to the benefits of group insurance. Itis stated in Volume 39 of Texas Jurisprudence at page 258:

“In enacting anamendment, the Legislature is presumed tohave intended to change the law, andaHon. William A. I+rrison, page 2 .(WW-1128)

construction should be adopted that gives effect to the intended change, rather than onewhich renders the amendment useless. ‘I Inconstruing the language of the statute here considered, we are to be guided bythose settled rules of statutory interpretation providing thatthe primary consideration is the ascertainment ofthe legislative intent, andthatan act should be given a fair, reasonable, and rational construction.

The Legislature, while expanding the definition of “employees, ” also incorporated significant limitations uponthe groups permitted to be covered by requiring thatthe entities set outin the statute be “affiliated, ‘I andby requiring thatthebusiness ofthe employer and,the affiliated entity be under common control, “through
. . . contract or otherwise. ” In imposing these requirements, the Legislature sought to insure thatthe advantages of group insurance would be available only to closely knit groups ofpersons, boundtogether 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 thatthe local recording agents andthe company, or the sub-agents and general agent, are “affiliated” inasmuch as they are associated for the purpose of placing insurance andwork in close connection toachieve thatend. Further, it is apparent from the agency contracts andbondforms submitted withyour request thatthe business of theagents 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 tothe carrier or general agent, compliance with rules and regulations promulgated bythe carrier or general agent, andthe filing of certain reports required of the agents bythe company or general agent. Obviously, the expanded definition of “employees” andthe use of the language “through
. . . contract or otherwise,” evidences the intention ofthe Legislature notto require thatdegree of control normally encountered in the ordinary employer-employee relationship.

Inview of the foregoing, it is our opinion thatyour question should be answered affirmatively.I - Hon. William A. Harrison, page 3 (WW-1128)

SUMMARY The relationship established between the fire and casualty company andthe local recording agent or between the sub-agent andthe general agent bytheir 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 JohnReeves Ben Harrison REVIEWED FOR THE ATTORNEY GENERAL BY: Howard W. Mays