WILLBVILSON 

*-l-ro- OENEzRAl. March 27, 1958 

Honorable Wflliun & H~?~~oxI 

Commissioner Of InoufurCO 

State Board d huuruuo 

Austin, Texas 

Dear Sir: 

Opinion No. WW-401 

Re: Is a county mutual insurance 

company which writes automobile 

insurance subject to the automobile, rate and policy provisions of 

Article 5.01, et seq., Texas Insurance Code? 

Your reqwat f4r an OptdOn is as follows: 

“The last session of the Texas Legislature authorized county mutual fnrurance companies qualifying to write 

casualty lines for &ate-wide operation to write all lines of 

automobile insurance. Under Chapter 5 of the Insurance 

Code, the writing d, all automobile insurance. in ,thiS State 

is subject to regulation and control by the Board of Insurance Commissionerr; and the Board fines and promulgates 

classifications, ratoi.‘nnd policy forms for automobile in-. 

surance. However, Cwpter 17 of the Code makes county 

mutual insurance compnnieo exempt from operations of co?- 

tain of the iasurmcr l&s of this State. 

“We ,respectfully request your opinion as to whether 

a county mutual insurance company writing automobile insurance is subject to the prwinions of Article 5.01, et seq., 

of the Texas Insurance Coda, and mwt therefore comply, 

with the automobile rating and policy lawo of this Stnb, and 

the regulations of the Board of Insurance Comtni.sslonere?’ 

As pointed out in your request, county mutual insurance companies 

are regulated by the provisions of Chapter 17, Texas Insurance Code. Section 5 of Article 17.25 specifically makes county mutual companieo ,rubject 

to the provisions of Article 5.06 of the Code which requires the B~oard to 

prescribe policy forms for insurers writing automobile insurance in this 

State. Thevefore. county mutual insurance companies writing automobile 

insurance must use polify forma and endorsements promulgated or approved by the Insurance bapartment under the provisions af-&ticle 5.06. 

As to the portion of your request concerning the automobile rate 

provisions oi Article 5.01, et seq., wo~experience more difficulty in an- 
Hon. William A. Harrison, page 2 (WW-401) 

swering the question. Article 5.01 provides that ‘every insurance company, corporation, interinsurance exchange, mutual reciprocal, association, Lloyds’ or other insurer. . . writing any form of motor vehicle 

insurance in this State’ shall be subject to the rates of premiums promulgated a.nd fixed hy the State Roard of Lnsurance. This st.ztul:r a-c;- 

thoriaes the St;lte Board of insurance to prescribe and fix .~utomnbile 

rates within this State, and would appear to require every insurance 

company writing such insurance to comply with the rates established 

by the Board. .However, Article 17.22 of the Code provides that “county 

mutual insurance companies shall be exempt from the operation of all 

insurance laws of this State, except as in this Chapter specifically provided. . .* Throughout Chapter 17 certain other enumer.ii.ed st&otzx 

are made to apply to county mutual companies; but nbw*tiesr in Chap?.er 

17 are the provisions of Article 5.01, and the other stztuter, authorizing 

the Board to fix automobile rates and requiring companies lo comp:~y 

with these rates, specifically made applicable to county mutual insurance companies. Section 1 .of Article 17.25 does authorize county mutual companies qualifying to write casualty lines for state-wide opera.- 

tions to “write all lines of automobile insurance”. However, this 

statute does not specifically require county mutuals to comply with the 

rates of premiums fixed and promulgated by the Roar.+ under Article 

5.01. The provision authorizing county mutuals to write all iincs of 

automobile insurance was enacted by the 54th Legislature. At the same 

session. the Legislature amended Article 17.22 and provided specifically 

that county’mutual companies would be subject to the provisions of certain enumerated statutes, but did not include therein Article 5.01. As 

the 54th Legislature authorized county mutual companies to write automobile insurance, it Could have required the companies .to be subject 

to the automobile rate laws when it amended Article 17.22 if that bad 

been the legislative intent. This the Legislature did not do. Therefore, 

Section 1 of Article 17.25 appears to be a naked authorization to the 

companies to write all lines of automobile insurance, without the companies being subject to the automobile rate laws. 

Article 18.23, dealing with Lloyds’ companies provides that 

Lloyds’ shall be exempt from the operation of all insurance laws of the 

State except as is provided in Chapter 18 “or unless it is specifically 

so provided in such other law that same shall be applicable” to Lloyds’. 

As Article 5.01 mentions Lloyds’ dompanies, the .“or” provision in 

Article 18.23 comes into effect and the Lloydsr companies are subject 

to the rating provisions of Article 5.01. The same type of statute and 

construction of the statute is applicable to reciprocal exchanges. Article 19.12. However, Article 17.22 dealing with county mutuals does not. 

have such an “or” clause, and specifically exempts county mutuals from 

all other insurance laws except those specifically enumerated within the 

bounds of Chapter 17. Therefore, while Article‘5.01 generally mentions 

mutual companies and all other insurance companies,writmg automobile 

insurance within the State, Article 17.22.i~ specific and is an +emption 

or exception statute to the general law Article 5.01. Walker V.-Meyers, 

114 Tex. 225, 266 S.W. 499; Cameron v. City of Waco, 8 S.W.Ld 249 ; 

Snoddy v. Caz, 5 Tex. ,106; 39 Tex.Jur. p. 191, 277. -I..--- 
Hon. William A. Harrison, page 3 (WW-401) 

Therefore, we are of the opinion that (1) county mutual insurance 

companies operating under the provisions of Chapter 17 of the Insurance 

Code and writing automobile insurance are subject to the automobile policy provisions of Arti.cle 5.06 of the Code, but (2) county mutual inswznce 

companies writing automobile insura.nce are not subject to the automobile 

rate and premium provisions of Articles 5.01, et seq., of the Code. 

SUMMARY 

County mutual insurance companies are subject to the 

automobile policy provisions of the Texas Insurance 

Code, but are not subject to the automobile rate and 

premium provisions of the Texas Insurance Code. 

Very truly yours, 

WILL WILSON 

Attorney General of Texas 

T&J 1. U&h& 

Fred B. Werkenthin 

Assistant Attorneys General 

FBW:dac 

APPROVED: 

OPINION COMMITTEE: 

Gao. P. Blackburn, Chairman 

Wallace Finfrock 

Morgan Nesbitt 

Richard Stone 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: W. V. Cieppert