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Hon. 3. Byron Saunders opinion No."S468 

Casualty.Insurance Commissioner, 

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- 

"ability insurance on automobiles. 

You have askedfor the opinion of this office~as. 

to whether county.mutual ~insurance companies organized.under 

Chapter 17 of the Te~xas Itisurayze Code can write Bodily ... 

Injury and Propertg.Damage Liability Insurance eon automobiles after the effective~date of 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'8 follovs: 

"County Mutual Insurance,CompanFes are 

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 land yard 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), 

,~designate those things on tihich'this 

be written by a county mutual insurance company. This Article is not amended by. Senate ~Biil 15 

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-shall be 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 b ile insurance , Drovided that no such company 

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 ~that which has been added 

by S. B. 15L7 
Hon. J. Byron Saunders, page 3 (+1@3). -:~~ 

Companies organized under Chapter 17..mus-t maintain at all ~times a free surplus, investedin .only those 

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 to write insurance locally 'in 

the oounty~ of its domicile only; or 

"(b) No~t less.than ~$5O,OOO.OQ.if the. company is organized to write insurance .in the 

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-in a county.other, ,. 

than the,county of. its-:domioile anddany adjoin- .: 

lpg~gounties within this State."~ ._, 

Under Article 17.22 of,S.B.,15, county mutuals are:: .~ 

subject to Article 5.12 of the Texas Insurance Code, 1951. 

This article provides for a tax on gross motor vehicle 

insurance premiums. Article 5.01, Texas Insurance Code, 

1951, defines,mofor vehicle or automobile ins~urance under~ 

Chapter 5, as follows:' ,' 

PI . . . 

"Motor vheicle nor automobile insurance as 

referred to in this sub-chapter shall be taken 

propelled vehicle, and in&ding also-every vehicle, 

trailer or semi-trailer pulled 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 foregoing definition 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 'Senate Bill 15 would 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 Insurance Commissioners in writing 

automobile insurance as.defined in Chapter 5 of the 1951 Code. 

, 

The caption t0,'~S.B. 15 in regard to t'he amendment 

of Article 17.25 of 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, county mutua~l insurante companies by quali~fging may write all lines 

of automobile insurance with limitations." 

It is clear ~from a treading of 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 companymeeting the requirements 

as set forth~therein may 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 -provisions of Chapter 117,:Acts 

of the 54th Legislature, 1955 (Senate Bill-ls), 

county mutual insurance companies may write 

liability insurance on automobiles. 

APPROVED: Yours very truly, '. 

Jo.-.Fred Jones ~, ,~ 'JOHN,~BEN.'SREPPRRD 

State Affairs Division .'~Attorney'General .of Texas 

J. A. Amis, Jr. 

Reviewer 

.By.R~obertO.- Fagg." 

Davis Grant As~sistant : 

Reviewer'~ 

Robert S..Trotti 

First Assistant 

John Ben Shepperd 

Attorney Generals