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

applicableto intrastateor looaloperations, Due to this fact,youhavebeen petitionedto order liabilitylnsuranae on suchvehiclesregulatedunder the casualtyrate lav, which Is saidto allowmore flexibilityla gearingIneurante costs to 

### the currentexperienceof suchoarriersby 

### enablingpromulgation ofmore than oneratingplan. Specificallyyou **aek** 

### whethersuchorder isauthorlzedby the termsofArticle5.02 aaaed to themotor vehicle 

### rate Law **by** 

### SsnateBill 431,**Acts** 

### 462,p. 842/. f**1st** 

### Leg.,R.S. 1949,oh.

The motorvehiclerate law requires "ratesof premium

. . .chargedand collectedby all insurerswriting any form of insuranceonmotorvehiclesin this state"to be fixedby theBoard inaccordancewith Its terms. It oovers Insuranceonmotorvehiclesussdby suchcarriers,

The casualtyrate lawauthorizesthe regulation of rates foti""casualty Insurance"

and expresslyexcludesfrom Itsapplicationa numberof dealgnatedtypesor kindsof insurance
. “Motor 

### vehicle"Insuranceisamong thoseexpressly excluded.
The amendatoryAct of 1949,uponwhich thewhole questionturns,reads:

'AnAct to authorizethe furtherregulation and supervisionofAutomobileInsurance and amendingChapter253,Acts of the 40thLegislature,

page 373,as amencled; and declaringan emergency.
"Be it enactedby the Legislatureof the Stateof Texas: “Se&Ion 

### 1, That Chapter253,Acts of the 40thLegislature,1927,as amended,also known as **Artiole** 

### 4682b,VernonIsCivilStatutesof Texas, isherebyamendedby addingtheretoa new section,to be 

### knownas SectionlA, tobe inserted mdlately precedingSection2, to readas follows:
"'SsotLonIA. There shallbe excludedfrom regulationuoder theprovisionsof thisAct any lasuraneeagainst 

### liabilityfor damagesarising out of the 

### ownership,operation,maintenanceor use of or against 

### lossof or damageto motorvehfolesdeecribed**in** 

### the foregoingsectionwhichHon. Joe P. Gibbs, page 

### 3 (V-1335)

may, In the judgmentof the Commissioner,be a type or class of Insurancewhich is also the subject of or may be more properly regulated under the terms or provisions of other insurancerating laws heretofore or hereafter enacted covering such insurance. If such sitUatiOQ shallbe 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 difficultfor 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 imperativepublic necessity that the ConstitutionalRule 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 submittedby interestedparties it Is argued on the one hand that Insuranceagainst.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 "insurancerating law

. . e covering such insurance,"as required by the amendment before such an order is permitted. This argument Isbased 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 f9 to the motor vehicle rate law Is Intended to authorize the Board to order regulation of certain forms of Insurance involvingmotor 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 "emergencyclause' of the amendatory Act. Since motor vehicle Insurance is expressly excluded from regulation under the casualty rate law, theyHon. 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 Insurancehere 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 insuranceas to some motor vehicles merely because the Board concludes that suchmay be "moreproperly' 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 'motorvehicle Insurance" as such. The construction urged is, in effect, that the "Insurance"which must be the "subject of'l or "coveredby" such other laws is Insuranceagainst loss or damages resulting from accident to or injury sufferedby any person for which accident or injury the assured Is liable, or insuranceagainst 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 insurancerates 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 orderedby the Board under the conditions stated. The problem presented is, then, whether insuranceagainst 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 insuranceas 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 Insuranceagainst 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 Insurancebusiness, your interpretation of itsmeaning 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, establishedby 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 "GeneralCasualty 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 "Dictionaryof Insurance Terms," published by the Chamber of Commerce of the United States in 1949, as 'a class of insurancemade 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 insurancedealing 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 clearHon. 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 statutebut it 'cannotbe 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 class" of hazards in cases where the Board concludes that such insurancemay 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. 'Ifthe 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 accomplishedunder 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 standardsby 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 inArticle 

### 5.14L4698a,Sec. g is that "Rates shall be reasonable, adequate, not unfairly discriminatory and non-confiscatoryas 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 systemby 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,, 

### 127Tex. 213, 93 S.W. 2d 372, 

### 375 (19x6), in upholdingArticle 1302a,V.C.S., empowering the Board to regulate title Insurance rates, the court said:

"We think it is settledby 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, 

### 196Wis. 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, 

### 147N,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. 

### 331Hon. 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