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Hon. 3. Byron Saunders opinionNo."S468

Casualty.InsuranceCommissioner, Casualty Insurance Division Re: Board of InsuranceCommissioners Austin 1, Texas ,, Construction 117, Adts of

Dear Mr. Saunders: :. Legislature, Bill 15); as

* -of Chapter the'54th 1955,(Senate to whether county mutual msurance .companies

may write lia- "abilityinsurance on automobiles.
You have askedfor the opinion of this office~as. to whether county.mutual~insurancecompanies organized.under Chapter 17 of the Te~xasItisurayze Code can write Bodily

... Injury and Propertg.DamageLiabilityInsurance eonautomobiles after the effective~dateof Senate Bill 15 @&s&d by the 54th Legislature, 1955.

The purnoses.set out by Article 17.01 of the Texas Insurance Code,&gsl, are a'8follovs:

"CountyMutual Insurance,CompanFesare companies organized for the purpose of insurance on the mutual or cooperative plan against loss or damage by~fire, lightning;gas explosion, theft,windstorm and hail, and for all or either of such purposes. "Unless they are restricted by their charters, they may write insurance against,said hazards: ., "(a) On both rural and urban dwellings and attendant outhous.es landyard buildings and' all their contents for home and personal use -- including family vehicles,musical.instruments and libraries; "(b) On barns and other farm, dairy, truck garden, hennery and ranch buildings and improvements of every description;Hon. J. Byron Saunders,page 2 (S-168)

"(c) On all vehicles, harness, implements, tools and machinery of every kind and description used on and about farms, truck gardens, dairies, henneries or ranches; "(d) On all fruits and products, other than growing crops, and all fowls, domestic animals and livestock of every description, produced, raised, grown, kept or used on truck .' gardens, henneries, farms, ranches.and dai'ries; and

housei(e) 'n church houses, county school

country lodge rooms and country recreation ialls, other than road houses and public dance halls and their contents." The first paragraph above defines a county mutual insurance company and sets out the type of physical damage The paragraphs following numbered (a), ,~designatethose things on tihich'this be written by a county mutual insurance company. This Article is not amended by.Senate~Biil15 of the 54th Legislature.

Section l~of Article~17.25,Texas Insurance Code, 1951, should be next consideredin determiningan answer to your question. Section1 of said Article~has been amended by S. B.~l5 by an addition to the present section, and as amended reads as follows:

"Section 1. Regulation. County Mutual insurance companies operating Under the.Drbvisions of this-Chapter-shallbe authorized'to write insurance against loss or damage from any hazard provided therein or,that any other fire or windstorm insurance company operatingin Texas may write on property described in Article 17.01 of this Chapter. County mutual insurance corn;- panies aualifyinR to write casualty lines for statewide operati~on may write all lines of automo ile insurance,Drovided that no such company b shall assume a ,risk~'on any one hazard greater than five (5%) per cent of its assets. unless such exC." LThe underlined Dortion of Section 1 is~thatwhich has been added by S. B. 15L7Hon. J. Byron Saunders, page 3 (+1@3). -:~~

Companies organized under Chapter 17..mus-tmaintain at all ~timesa free surplus, investedin .onlythose items required by Article 2.08 of~S.Ri 15;,as follows: :

Art. 17.11 Financial Requirements and Imoalrment of Surplus. "(a) Not less than ,$25,000.00~~if,~]:the corn-~ pany is organized towrite insurance locally 'in the oounty~

of its domicile only; or "(b) No~tless.than~$5O,OOO.OQ.if the.company is organized towrite insurance .inthe oorrirtyof~

its domicileeand anyadjoining.counties only; ore"
':~ y(c) Not-less than anamountequalto ~the. aggregate.

of~the.minimumcapital~and ~minimum surplus requlred.of a:fire~insurancecompany.by Article 2.02 of this Code if such~ company,is .._. organi.zed

to write insurance-ina county.other, ,. than the,county of.its-:domioile anddany adjoin- .: lpg~gountieswithin this State."~ ._, Under Article 17.22 of,S.B.,15, countymutuals are::.~ subject to Article 5.12 of the Texas Insurance Code, 1951. This article provides for a tax on gross motor vehicle insurancepremiums. Article 5.01, Texas Insurance Code, 1951, defines,mofor vehicle or automobile ins~urance under~ Chapter 5, as follows:','

PI

. . . "Motor vheiclenorautomobile insurance as referred to in this sub-chapter shall be taken

propelled vehicle, and in&ding also-every vehicle, trailer or semi-trailerpulled or towed by a.motor vehicle, but excluding every motor vehicle running only upon fixed rails or tracks. Workmen's Compensation Insurance is excluded from the foregoingdefinition and from the terms of this subchapter:Acts 1951, 52nd Leg.,ch. 491."Hon. J. Bryon Saunders, page 4 

### (S-168)

Article 

### 17.25~of'SenateBill 

### 15would provide that county mutuals are subjeot tom Article 

### 5:06 of theTexas Insurance Code, 1951,which provides for the policy forms to be. prescribed by the Board of InsuranceCommissioners inwriting automobile insurance as.defined in Chapter 

### 5 of the 1951 Code.

, The caption t0,'~S.B. 

### 15 in regard to t'heamendment of Article 

### 17.25of the Texas Insurance Code, 1951,reads in part as follows':

1,

. . .by amending Section I of Article 17.25 of the Code so.as to provide that in addition to lines heretofore authorized, countymutua~linsurante companiesby quali~fging may write all lines of automobile insurancewith limitations."
It is clear~froma treadingof the above:quoted portions of the Texas Insurance Code of 1951, as.well as those portions of S.B.:

### 15 of.the@th Legislature,amending said Code, and~it is the opinion qf'this office, that a county mutual insurance companymeetingthe requirements as set forth~thereinmay write~liability and property damage insurance coverage on automobiles in, addition to,- the physical damage coverage set out in Article 17.01 of the Texas Insurande Code of 1951. 2 SUMMARY .: ‘

. : Underthe -provisionsof Chapter 117,:Acts of the 54th Legislature, 1955 (SenateBill-ls), county mutual insurance companiesmay write liability insurance on automobiles.
APPROVED: Yours very truly, '. Jo.-.Fred

Jones ~,,~ 'JOHN,~BEN.'SREPPRRD State Affairs Division .'~Attorney'General .ofTexas
J. A. Amis, Jr. Reviewer .By.R~obertO.- Fagg." Davis Grant As~sistant : Reviewer'~ Robert S..Trotti First Assistant John Ben Shepperd Attorney Generals