Eon. Joe P. Qlbbs, page 2 (V-1335) 

applicable to intrastate or looal operations, Due to this 

fact, you have been petitioned to order liability lnsuranae 

on such vehicles regulated under the casualty rate lav, 

which Is said to allow more flexibility la gearing Ineurante costs to the current experience of such oarriers by 

enabling promulgation of more than one rating plan. 

Specifically you aek whether such order is authorlzed by the terms of Article 5.02 aaaed to the motor vehicle 

rate Law by Ssnate Bill 431, Acts 

462, p. 842/. 

f 1st Leg., R.S. 1949, oh. 

The motor vehicle rate law requires "rates of 

premium . . . charged and collected by all insurers writing 

any form of insurance on motor vehicles in this state" to 

be fixed by the Board in accordance with Its terms. It oovers Insurance on motor vehicles ussd by such carriers, 

The casualty rate law authorizes the regulation 

of rates foti""casualty Insurance" and expressly excludes from 

Its application a number of dealgnated types or kinds of insurance . “Motor vehicle" Insurance is among those expressly 

excluded. 

The amendatory Act of 1949, upon which the whole 

question turns, reads: 

'An Act to authorize the further regulation 

and supervision of Automobile Insurance 

and amending Chapter 253, Acts of the 

40th Legislature, page 373, as amencled; 

and declaring an emergency. 

"Be it enacted by the Legislature of the State of Texas: 

“Se&Ion 1, That Chapter 253, Acts of the 

40th Legislature, 1927, as amended, also known 

as Artiole 4682b, VernonIs Civil Statutes of 

Texas, is hereby amended by adding thereto a new 

section, to be known as Section lA, to be inserted 

mdlately preceding Section 2, to read as follows: 

"'SsotLon IA. There shall be excluded from 

regulation uoder the provisions of this Act any 

lasuranee against liability for damages arising 

out of the ownership, operation, maintenance or 

use of or against loss of or damage to motor vehfoles deecribed in the foregoing section which 
Hon. Joe P. Gibbs, page 3 (V-1335) 

may, In the judgment of the Commissioner, be 

a type or class of Insurance which is also 

the subject of or may be more properly regulated under the terms or provisions of other 

insurance rating laws heretofore or hereafter 

enacted covering such insurance. If such sitUatiOQ shall be found to exist, then the Commissioner shall make an order declaring which 

of the said rating laws shall be applicable 

to such type or class of insurance, and to any 

motor vehicle equipment mentioned in Section 

1 of this law.1 

"Sec. 2. The fact that the present automobile rating laws now in effect in Texas contain some conflicts so that it Is difficult for 

the administrative aUthOriti8S and the insurance 

Industry to tell under which law a certain type 

of Insurance or a certain type of property is to 

be supervised or regulated, and the fact that It, 

is highly desirable that some method for the composing of these differences and conflicts be 

vested in the adminiStrativ8 authorities, create 

an emergency aAd an imperative public necessity 

that the Constitutional Rule requiring bills to 

be read on three consecutive days in 8aCh House 

be, and said Rule is hereby suspended; and this 

Act shall take effect and be In force from and 

after Its passage, and it is so enacted." 

In briefs submitted by interested parties it Is 

argued on the one hand that Insurance against. liability for 

damages arising out of the ownership, operation, maintenance, or use of or against loss of or damage to motor vehiCl8S IS neither "the subject Of" the Casualty rate law 

nor is that law an "insurance rating law . . e covering 

such insurance," as required by the amendment before such 

an order is permitted. This argument Is based in the main 

on the fact that the casualty rate law expressly excludes 

'motor 98hlcle Insurance" from its ap lication. These parties concede that the amendment of 19 f 9 to the motor vehicle rate law Is Intended to authorize the Board to order 

regulation of certain forms of Insurance involving motor 

vehicle and transportation operations under other Statutes, 

but it is iQSist8d that the Board may so act only in special Instances of uncertainty as to which of two or more 

statutes apply, citing the "emergency clause' of the amendatory Act. Since motor vehicle Insurance is expressly 

excluded from regulation under the casualty rate law, they 
Hon. Joe P.,,Gibbs, page 4 (V-1335) 

say that there is no "difference," "difficulty," "conflict," 

Or Similar uncertainty, within the meaning of the "emergency 

clause,lI as to whether the kinds of Insurance here involved 

should be supervised or regulated under the casualty or the 

motor vehicle rate laws. 

These parties also contend that to empower the 

Board to choose some other statute under which to regulate 

insurance as to some motor vehicles merely because the Board 

concludes that such may be "more properly' regulated would 

effect an unconstitutional delegation of legislative power 

without a sufficient standard to guide the Board and an unconstitutional delegation of power to suspend the motor vehicle rate law. 

It is argued, on the contrary, that such construction would render the amendment presently and practically 

meaningless, since no other rating law covers 'motor vehicle 

Insurance" as such. The construction urged is, in effect, 

that the "Insurance" which must be the "subject of'l or 

"covered by" such other laws is Insurance against loss or 

damages resulting from accident to or injury suffered by any 

person for which accident or injury the assured Is liable, 

or insurance against loss or damage to an insured's property. These parties argue that their construction Is constitutional. 

The 1949 amendment to the motor vehicle rate law 

is clearly intended to authorize the Board of Insurance Commissioners to regulate certain motor vehicle insurance rates 

under the provisions of other statutes. It says, in effect, 

that any form of insurance covering liability of those in 

charge of a motor vehicle or covering loss of or damage to 

a motor vehicle shall be regulated under any other statute 

regulating rates on insurance of the same "type or class" 

when so ordered by the Board under the conditions stated. 

The problem presented is, then, whether insurance against 

liability for damages arising out of ownership, operation, 

maintenance, or use of motor vehicles operating under permits 

of the Interstate Commerce Commission Is a 'type or class of 

insurance" which Is also the subject of or covered by the 

casualty rate law. 

Obviously,, at the time of the ameidment, no other 

statute applied to motor vehicle insurance as defined In 

the motor vehicle rate law, since the motor vehicle rate law 

specifically covered Insurance on motor vehicles and its provisions were therefore exclusive on the subject. Regulation 

of rates on motor vehicle insurance as there defined was as 
. . 

Hon. Joe P. Gibbs, page 5 (V-1335) 

certainly and effectively excluded from the provisions~ of all 

other rate statutes as it was from the casualty rate law, regardless of an express exclusion. Consequently, the 1949 

amendment must have been Intended to authorize the Board to 

regulate rates thereon under other statutes applicable to 

hazards or perils similar to those to which motor vehicle 

owners and operators are exposed, and to repeal any express 

or implied restrictions then in effect. 

We have no doubt that Insurance against liability 

for damages arising out of the ownership, etc., of motor 

vehicles is a similar "type or class" of insurance to that 

covered by the casualty rate law applicable to "casualty 

insurancei" although the term 

defined in the statutes. 

"casualty insurance" is not 

Your letter states that llablllty 

insurance Is within the general category known as "casualty 

insurance," and, since such phrase is a term used in the 

statute in connection with the Insurance business, your interpretation of its meaning is authoritative. Article 10 

of Vernon's Civil Statutes provides that In construing civil 

statutes "the ordinary signification shall be applied to 

words, except words of art or words connected with a particular trade or subject matter, when they shall have the signlficatl.on attached to them by experts In such art or trade . .' 

We do not find the few available decisions discussing the term "casualty insurance" to be particularly pertinent to a construction of the term as used in the casualty 

rate law. That it includes the type of insurance in question, 

however, is, In our opinion, established by an examination of 

the insurance statutes. Chapter 8 of the new Insurance Code, 

like Chapter 18 of Title 78 of the Revised Civil Statutes of 

1925, is headed "General Casualty Companies." Organization 

of corporations is there authorized to insure against, among 

other hazards, loss or damages resulting from accident to or 

Injury suffered by any person for which accident or injury 

the assured is liable. See Article 8.01 ,&%n/- The term 

is also defined in "Dictionary of Insurance Terms," published 

by the Chamber of Commerce of the United States in 1949, as 

'a class of insurance made up of a variety of subclasses, 

principally concerned with Insurance against loss due to legal liability to third persons . e .' Insurance against 

liability arising from truck operations is clearly within a 

general class of insurance dealing with responsibility of 

the Insured to third persons for Injury and damage caused by 

accidents and Is a form of "casualty insurance," as that term 

Is used in the casualty rate law. 

Having determined what we believe to be the clear 
Hon. Joe P. GFbbs, page 6 (V-1335) 

intent of the amendment of 1949, we do not consider an extended discussion of the emergency clause necessary. The 

emergency clause may be looked to as an aid to construction 

of a statute but it 'cannot be invoked for the purpose of 

raising an ambiguity in the language of the statute.' 

Llm Casualty Co. of New York v Lem, 62 S.W.2d 497, 499 

error '); dism. narte Hayden, 215 S.W. 

The effect of the 1949 amendment Is to modify the 

exclusion of motor vehicle Insurance from regulation under 

other statutes applicable to the same general 'type or 

c lass " of hazards in cases where the Board concludes that 

such insurance may be more properly rated under such other 

statutes and orders regulation of rates thereunder. See 

Urban v. Harris County, 251 S.W.594 (Tex. Civ. App. 1923, 

error ref.), quoting Sutherland on Statutory Construction, 

as follows: 

"A new statute/which affirmatively grants 

a larger jurisdiction, or power, or right, repeals any prior statute, by which a power, jurlsdiction, or right less ample or absolute has been 

granted. 'If the exercise of a power granted by 

a legislative act may include going beyond limits 

fixed by a prior statute, such limit is impliedly 

removed, at least so far as it conflicts with the 

doing of that which is subsequently authorized." 

We therefore conclude that the motor vehicle rate 

law, as amended in 1949, authorizes the Board, upon a finding that more proper regulation of rates on such insurance 

can be accomplished under the casualty rate law, to order 

regulation under the latter statutes. 

We also conclude that Article 5.02 thus construed 

is not unconstitutional as improperly delegating leglslative powers to make or suspend laws. The power here is to 

apply one of several statutory systems to the specific 

subject matter, which is the effect of the amendment regardless of which suggested construction Is adopted. Power to 

regulate rates on insurance is commonly delegated to special 

regulatory agencies who are broad discretion in regard thereto. Article 5.60 authorizes the Board to 

regulate Workmen's Compensation insurance rates. Discretion 

is vested in the Board as to whether certain systems Of rating desl nated in the statute shall be promulgated. Article 

5.01 L46[2b; Sec. u delegates power to the Board to approve 

various systems of rating. The standards by which the Board 
. . 

Hon. Joe P. Gibbs, page 7 (V-1335) 

IS to be guided are set out in the broadest terms. The 

rates must be "just, reasonable and adequate." The standard set out in Article 5.14 L4698a, Sec. g is that "Rates 

shall be reasonable, adequate, not unfairly discriminatory 

and non-confiscatory as to any class of insurer." 

The various insurance rate regulatory statutes 

are all Intended to result In rates as to any particular 

class of risk based on essentially the same considerations 

and standards, so that, in the final analysis, alternatives 

as allowed in any of these statutes are as to mechanics and 

classification, It is not as if one rate law contemplated 

a higher or lower average rate in relation to loss experience for the classes included than Is contemplated in another 

rate law. The discretion authorized is as to the mechanics 

and classification system by which the just rate is to be 

determined. We see no essential difference in the discretion vested by the amendment and that commonly vested in 

rate regulatory statutes generally. No extended citation 

of authorities is necessary to establish the constitutional 

propriety of such delegation in connection with rate making. 

In Daniel V* Tyrrell & Garth, Inv. Co,, 127 Tex. 213, 93 S.W. 

2d 372, 375 (19x6), in upholding Article 1302a, V.C.S., empowering the Board to regulate title Insurance rates, the 

court said: 

"We think it is settled by the authorities 

of this state that rate-making, as that term Is 

applied to cases such as this, is a legislative 

power, which can be delegated to a board or commission, under proper safeguards; e D *" 

And see Board of Insurance Commissioners v. Carter, 228 S.W. 

2d 335 (Tex. Civ. App. 1950,'error ref. n-r-e.); State v. 

Whitman, 196 Wis. 472, 220 N,W. 929 (1928); 1nsuran;;lgo. of 

North America v. Welch, 49 Okla. 620, 154 Pac. 48 ( 1 

State v. Howard, 96 Neb. 278, 147 N,W, 689 (1914); Hendeison 

v. M&Laster, 104 S.C, 268, 88 S.E. 645 (1916); Aetna Ins. Co. 

v. H de, 34 F,2d 185 (W.D. MO. 

m&T 

1929) affirmed in 281 U.S. 331 
Hon. Joe P. Gibbs, page 8 (V-1335) 

SUMMARY 

Article 5.02 of the Insurance Code 

authorizes the Board of Insurance Commissioners to order regulation under Articles 

5.13 through 5.24 of the Code, covering 

"casualty insurance" rates, of public liability insurance rates on certain motor 

vehicles used by motor aarrlers operating 

in interstate commerce. 

APPROVED: 

Jesse P. Luton, Jr. 

Reviewing Assistant 

Yours very truly, 

Charles D. Mathews 

First Assistant 

NMc/rt