### THE ATNBRNE:Y GENERAL OF?!hCXAS

The HonorableA. R. Schwartz Chairman OpinionNo. R-824
Senate Committee on Jurisprudence Re: Whether mobile homes State Capitol Austin, Texas 78701 may be insuredunder the Texas Catastrophe Property InsurancePool Act.
Dear Senator Schwartz:

. You have requested our opinion regardingwhethermobile homes may be insuredunder the provisions of article 21.49 of the Texas InsuranceCode, InsurancePool Act. the TexaB CatastropheProperty Specifically,you ask:
1. Whether the State Board of Insurance may requiremembers of the Texas Cataatrophe Property InsuranceAssociation to provide insurance for mobile homes in a' seacoast area; 2. whether a mobile home is 'immovable property' for purposes of article 21.49; and
3. whether, if the State Board of Insurancemay requiremembers of the Association to provide coverage, it may be provided at a special rate. Article 21.49 created the Texas Catastrophe Property InsuranceAssociation, composed of "allproperty insurers authorized to transactproperty insurance in this State, except those companies that are preventedby law fromwriting coverages available through the pool on a Statewidebasis." Sec. 4(a). The temporaryboard of directors,made up of

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sevenmembers, was directed to submit to the Board of Insurance "for review and approval a proposedplan of operation." Sec. 5(d). If the Association did not submit a plan satisfactory to the Board prior to a certain date, the Board was to write its own plan. Id. On May 10, 1973, the Board of Insuranceapproved the Azciation's "RevisedPlan of Operation." Article I, section 2 of Part Four of the Revised Plan provides that "'insurableproperty' shall not include any structure consisting, in whole or in part, of a Aohie home." Thus, at present there is no question that mobile homes are excluded from coverage under the Act. Article 21.49 empowers the "Directorsof the Association

. . . subject to the approval of the Board [to]amend the plan of oheration at any time." Sec. 5(d). In addition, the Association is required, "in the absence of an appeal," to "adoptamendments to the plan proposed by the Board within 30 days." Id. Thus, it appears that the Board may, on its own initiatm, amend the Plan of Operation and that any such amendment is effective 30 days from its adoption unless the Association employs the appeal procedure of section 9. We believe, therefore, that the Board may amend the Plan of Operation specifically to includemobile homes within the definition of "insurableproperty,*unless some portion of the statuteprevents such action.
"Insurableproperty" is defined by article 21.49 as

immovableproperty at fixed locations in a catastrophe area or corporeal movable property located therein (as may be designated in the plan of operation)which property is determined by the Association,pursuant to the criteria specified in the plan of operation to be in an insurable condition againstwindstorm, hail and/or fire and explosion as appropriate,as determined by normal underwriting standards

. . . . Sec. 3(f). Thus, unless a mobile home may be classified as "immovable property," the Board of Insurance iswithout authority to amend the Plan of Operation to include itwithin the definition of "insurableproperty." In our opinion, however, there are instances in which a mobile homemight be deemed "immovable

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property" for purposes of article 21.49. In' CapitolA

-F==' Inc.v. Walker, 448 S.W.2d 830 (Tex.Civ. App. -- Auat n, -- 1969 writ ref'd n.r.e.1, the court consideredwhether a mobile home could serve as the basis for a homestead exemption. The evidence indicated that

the method used in placing [the]trailer on concreteblockswas the same as used by housemovers who move and relocate entire houses. 448 S.W.2d at 832. Rejecting the argument that the definition of "house trailer" in the Penal Code had any bearing on the question of a house trailer's eligibility for a homestead exemption, the court concluded that the mobile home "ia aa physically attached to the land as frame houses built on concrete blocks or cedar posts." Id. at 833, 035.

- Other states have adopted a similarview. In Ballard's Inc. v. Evans, 241 So.Zd 557 ,(La.Ct. App. 1970], a Louisiana courtTeldat a truck body withoutwheels resting on concrete blocks that **was** not capable of being liftedby two men and **was** intended to become a permanent part,of the premiseswas an "immovable." 241 So.2d at 562. Likewise, in Lafleurv. Foret, 213 So.2d 141 (La.Ct. App. 19681, the court held sat a chicken brooder shedwhose dimensionswere 5 feet by 4 feet by 10 feet and which,could not be moved by two men was an "immovable." 213 So.Zd at 150.
The purpose of the Catastrophe Property Insurance Pool Act is to 'providea method whereby adequatewindstorm, hail and fire insurancemay be obtained in certain designated portions of the State of Texas," since "an adequatemarket for [such]insurance ia necessary to the economicwelfare of the State of Texas." Sec. 1. On the basis of this declared purpose, and the above cited decisions,we believe that the Board is authorized to adopt a definition of "immovable property" that would in certain instancespermit the inclusion of mobile homes within that definition. Although by virtue of its expertise in this area the Board is best qualified to

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fashion its own definition,we believe that it should coneider such factors aa the size of the mobile home, its degree of attachment to the land on which it is situated, the presence or absence of wheels, and in particular, the mobile home's degree of compliancewith the "tie-down" standards of the Mobile Homes StandardsAct, article 5221f, V.T.C.S.
Your final question is whether, if the Boardmay require members of the Association to provide coverage formobile homes, such coverage should be subject to a special rate and whether the Association could create standards~governing eligibility for coverage under the rate established for mobile homes. Article I, section 4, of Part Four of the Plan of Operation provides that "the rates, rating plans and rate rules applicable shallbe those establishedpursuant to Section 8 of the Act." Article 21.49, section 8(a), requires the Association to

file with the Board every manual of classifications,rules, **rates**

**. .**  every rating plan, and everymodif%- tion of the foregoingwhich it proposes to use. Section 8(c) authorizes the Board to "approve,modify, or disapprove" suchmanuals of rates and classification. Furthermore,under section 5A(a), the Board may

[alfternotice and hearing

. . . issue any orders which it considers necessary to carry out the purposes of this Act including,but **not** limited to, maximum rates, competitive rates, and policy forms. Accordingly,we believe **a** separate rate structuremay **be** provided for mobile homes.

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SUMMARY 5 (H-824)

The State Board of Insurancemay requiremembers of the Texas Cataatrophe Property InsuranceAssociation to provide insurance formobile homes in a catastrophe area, provided a mobile home is properly classifiedas "immovable property." The Boardmay adopt a definition of "immovableproperty" that would in certain instancespermit the inclusionof mobile homeswithin such definition. If the Board requires the inclusion of mobile homeswithin the Catastrophe Pool, itmay further require that rates be establishedand classifications created in accordancewith article 21.49, section 8, Texas InsuranceCode.

- Very truly yours,

Attorney General of Texas
APPROVED: w

Opinion Committee jwb

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