## THE ATTORNEY GENERAL OF =XAS

WTIA. WILSON **A=O ’** **RNIFy** 

### OBSNERAI. May 29, 1961

Hon. William A. Harrison Commi~ssioner ofInsurance International Life Building Austin, Texas Opinion No. WW- 1071
Re: Whether County Mutual Insurance Companies which are authorized toissue automobile liability insurance policies in the State of Texas are subject to the mandatory provisions of Section 35 ofthe Texas Motor Vehicle Safety-Responsibility Act, Acts 1951, 52nd Legislature (Article 6701h, Civil Statutes of Texas).
Dear Commissioner Harrison:

You have asked our opinion onthe following questions:

“1. Are County Mutual Insurance Companies which are authorized to issue automobile liability insurance policies inthe State of Texas subject to the mandatory provisions ofSection 35 ofthe Texas Motor Vehicle SafetyResponsibility Act, Acts 1951, 52nd Legislature?

“2. Ifyour answer to the above question is inthe affirmative, would a County Mutual which subscribed to the Assigned Risk Plan be required to charge the rate ofpremium prescribed by the State Boa,rd ofInsurance for policies issued in accordance with the Texas Motor Vehicle Assigned Risk Plan? I’
Section 35 ofArticle 6701h, V. C.S. , the Motor Vehicle SafetyResponsibility Act, after making provisions for the formation of “a plan and procedure to provide ameans by which insurance may be assigned to an authorized insurance company for aperson required by this Act to show proof offinancial responsibility, ” commonly known as the assigned risk plan, continues by providing: “When any such plan has been approvedHon. William A. Harrison, page 2 (WW-1071)

by the Board ofInsurance Commissioners, all insurance companies authorized to issue motor vehicle liability policies inthe State of Texas shall subscribe thereto and participate therein. I’ Inaddition, the Board is given the authority to set premium rates commensurate with the risks. (Inthe field ofautomobile insurance generally, the Board, by Subchapter A of Chapter 5ofthe Insurance Code has been given the responsibility ofpromulgating policy forms and regulating premium rates. )

County Mutual6 have a somewhat unique history. Chapter 17ofthe Insurance Code (Art. 17.22, Vol. 14, Vernon’s Civil Statutes) has consistently provided that such companies shall be “exempt from the operation of all insurance laws ofthis state” unless otherwise specifically provided in said Chapter. Formerly, no such company could write automobile liability insurance. In 1955, however, certain changes were made in Chapter 17. Article 17. 02was amended to prohibit the formation ofsuch companies; Article 17.25 was amended to authorize the writing ofautomobile liability insurance by certain classes of County Mutuals; and Article 17.22 was amended to provide that such companies are subject to certain specified statutes outside of Chapter 17.

Shortly after the passage ofthe above-mentioned amendments, this office was called upon to answer somewhat the same ques:tion in regard to automobile liability insurance generally that we are now called upon to answer in regard to the assigned risk plan. InOpinion No. WW-401, we held: 1)that County Mutuals were specifically made subject to the policy provisions ofArticle 5.06, but 2)were not subject to the rating provisions ofArticle 5.01, et seq, because ofthe exemption provisions.

The reasoning of Opinion No. WW-401 applies equally to the question before us. Although obviously the purpose ofArt. 6701h in its entirety is “to encourage safer use of motor vehicles, ” in our opinion Sec. 35 of that Article is an “insurance law” within the purview ofArt. 17.22 since the regulations which it imposes upon the insurance industry after approval ofthe plan by the Board are ofthe most fundamental type, i.e. the compulsory insuring ofa risk at aprescribed rate. Nowhere in the 1955 amendments to Chapter 17, neither inthose giving County Mutual6 the authority to write automobile liability insurance, nor inthose specifying other portions ofthe laws ofthis State towhich such companies should thenceforth be subject, are there any references to Article 6701h. although ithad been in existence since 1951.Hon. William A. Harrison, page 3 (WW-1071)

Accordingly, we are compelled to hold that County Mutual6 are not subject to the provisions ofthe Texas Motor Vehicle Assigned Risk Plan, andboth questions are answered inthe negative.
SUMMARY County Mutual Insurance Companies which are authorized to issue automobile liability insurance policies inthe State of Texas are not subject to the mandatory provisions ofSection 35 ofthe Texas Motor Vehicle Safety-Responsibility Act, Acts 1951, 52nd Legislature (Article 6701h, V. C.S.)~ Very truly yours, WILL W.ILSON Attorney General ofTexas

Assistant A
RVL:lmc
APPROVED:
OPINION COMMITTEE:
W. V. Geppert, Chairman Virgil Pulliam William R. Hemphill Ben Harrison Tom I. McFarling
REVIEWED FOR THE ATTORNEY GENERAL BY: Morgan Nesbitt