Honorable Ned Price, Chairman Opinion No. M- 546 Honorable Durwood Manford, Member Honorable Charles D. Mathews, Member State Board of Insurance 1110 San Jacinto Austin, Texas 78701 Re: Whether H.B. 203 and H.B. 378, Acts 61st Leg., R,S. , 1969 (concerning the pur- chase ofliability insurance by State agencies) impose any obligation upon the State Board of Insurance other than the promulgation of an Dear Sirs: insurance form.

Inyour recent letter you request an answer to the~abovecaptioned question. You point out that Section 1of H.B. 203 (Acts 61st Leg., R.S., 1969, ch. 797, p. 2357) codified as Section 1ofArticle 6252-19a, Vernon’s Civil Statutes, reads, inpart, as follows:

‘1.

. . All liability insurance so purchased shall be provided on apolicy form or forms approved by the State Board of Insurance as to form and by the Attorney General as toliability. ”
The same language appears inSection 1ofArticle 6674s-1, Vernon’s Civil Statutes, (H.B. 378, Acts 6lst Leg., R.S., 1969, ch. 212, p. 617. )

The above quoted provision ofthe statutes in question is wholly silent as to any duty ofthe Board to fix or audit the rates which are charged for the insurance in question, and deals only with the subject ofthe policy form or forms evidencing such insurance’coverage. In your letter you point outthat your question arisesby r.eason ofthe following facts: The above quoted provisions are practically the same as those

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found inSection 1of Article 6166210, V. C.S. , which authorfnes the Texas Prison Board (now called the Texas Department ofCorrect~ions) to insure its employees against liability arising from the operation of., motor vehicles. That statute, which was enacted in 1933, provides, inpart:

‘1.

. . All insurance taken outby the said

Board for and inbehalf ofthe benefits ofthe State shall be on forms approved by the Insurance Commission as to form and by the Attorney General as to liability. ‘I

You further point out that in the administration ofthe statute last mentioned the State Board of Insurance not only approved the lan-, guage of the contract of insurance through which the Texas Prison.’ Board obtained coverage under Article 6166210, but also itundertook to audit the in6uranc.e account for the purpose of determining whether. correct rates and rate modifiers had been applied. This practice has continued down to the present date. After the Board has ascertained that the policy contains both the correct form and the correct rates, it is transmitted to the Attorney General setting forth such facts. You further point out that the practice of making anaudit ofthe rates itnder the 1933 statute has not been burdensome inthat it requires only appro,ximately ten to sixteen man hours per year, but that if it is followed in the administration ofthe new statutes above mentioned .itwould involve approximately one thousand man hours per year, for which no appropriation has been made by the Legislature.

Inour opinion the assumption ofthe rate-checking function in the administration ofArticle 6166210 would not constitute an administrative interpretation ofthe statute which, by reason oflegislative acquiescence thereto, would change the meaning ofthe statute so as toinclude rate-checking as one of the duties ofthe Board under the statute. Even ifit.constituted an interpretation, rather than amere practice based upon general administrative authority, it could not affect the meaning ofthe statute. The statute is not ambiguous and the administrative practice thereunder is not thus relevant to its construction. The rules of statutory construction, including the doctrine of legislative acquiescence, would not be applicable. McCallum v:

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### M- 546

Associated Retail Credit Men ofAustin, 41 S.W. 2d 45 (Tex. Corn. App. 1931). See Calvert v. Kadane, 427 S.W. 2d 605 (Tex., Sup. ‘1968); In enacting the above quoted provisions, the Le’gislature did not impose upon the Board any duty other than the approval of policy forms.

The Board does have, however, a duty under Articles 1:04(b) and (c) and 5.01, Texas Insurance Code, to fix and maintain fair, reasonable, andjust insurance premium rates in accordance with its published rules and regulations in this connection. The statutes mu& be read in pari materia with Articles 6252-19a and 66746-1. The Cornmissioner’s. duty to enforce such regulations may, inthe Board’s discretion, involve
an auditing ofthe rates as ameans of enforcement. The authority to make such an audit is implicit in these statutes when taken together, but the extent of any such audit lies within the sound discretion ofthe Board, and consonant with the availability ofthe funds appropriated for such enforcement purposes. We will not attempt to relate here the .various circumstances under which aduty could arise to require an audit.
SUMMARY
Section 1ofArticle 6252-19a, V. C.S. (H. B. 

### 203, Acts 61st Leg., R.S., 1969, ch. 797, p. ,2357) and Section 1of Article 66746-1, V. C.S. (H. B. ‘378, Acts 61st Leg., R.S., 1969, ch. 212,.-p. 617) impose no obligation upon the State Board of Ipsurance other than the approval of policy forms; h’owever, such statutes construed inpari materia with Articles 1.04 and 5.01, Texas Insurance Code, require.the State Board of Insurance to fix and maintain fair, reasonable, andjust insurance premium rates, and the auditing of rates may become ameans of enforcement, which matter is left to the sound discretion ofthe Board and consonant with the availability of funds for such enforcement purposes.

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Hon. Ned Price, etal, page 4

Prepared by Ralph R. Rash Assistant Attorney General
APPROVED: OPINION COMMITTEE
Kerns Taylor, Chairman Alfred Walker, Co-Chairman Wardlow Lane Malcolm Quick Jack Sparks Roger Tyler Terry Goodman
Meade F. Griffin Staff Legal Assistant
Nola White ” First Assistant Attorney General M- 546

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