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Mr.Lyndon L. Olson, Jr.

Chairman State Board of Insurance 1110SanJacinto Boulevard Austin, Texas 78701 Opinion No. m-734
Re: Whether aninsurance carrier m=Y consider completion of a defensive driving course under article 6701d, section 143A. V.T.C.S.
DearMr. Olson:
You ask several questions about the practice engaged in by some insurance companies of considering the completion of a defensive driving course as the equivalent of a conviction of certain misdemeanor offenses under article 6701d, V.T.C.S., the Uniform Act Regulating Traffic onHighways. Your questions are:

1. Does article 6701d, section 143A, prohibit insurers from considering completion of adefensive driving course for underwriting purposes or does it merely prohibit the charge frombeing considered by a court in assessing punishment for subsequent traffic citations?
2. If the statute prohibits the consideration of completion of a defensive driving course for underwriting purposes, would an insurer's consideration of such completion violate theDeceptive Trade Practices - ConsumerProtection Act, Business and Commerce Code section 17.46 and thereby allow enforcement by the State Board of Insurance under article 21.21, section 7of the Insurance Code? If not, would such anact violate other Insurance Code provisions?
Youadvise that various insurance companies charge increased insurance prices whenaninsured or aperson seeking insurance takes adefensive driving course in exchange for dismissal of atraffic citation under section 143Aof article 6701d.
Section 143Aof article 6701d, V.T.C.S., provides:

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(a) When a person is cherged with e misdemeanor offense under this Act, other then a violation of Section 51. committed while operating amotor vehicle, the court: (1) in its discretion may defer proceedings end allow the person 90days to present evidence that, subsequent to the alleged act, the person has successfully completed e defensive driver’s course approved by the Texas Department of Public Safety or other driving safety course approved by the court; or (2) shall defer proceedings end allow the person 90days to present written evidence that, subsequent to the alleged act, the person has successfully completed adefensive driver’s course approved by the Texas Department of Public Safety or another driving safety course approved by the court, if: (A) the person presents to the court en oral request or written motion to take a course ; (B) the person has avalid Texas driver’s license or permit; end (C) the person’s driving record es maintained bytheTexas Department ofPublic Safety does not indicate successful completipn of a driving safety course under this subdivision within the twoyears immediately preceding the date of the alleged offense. (b) When the person complies with the provisions of Subsection (a) of this section andthe evidence presented is eccepted by the court, the court shall dismiss the charge.
Whenacharge is dismissed under this section, the charge maynot bepert of the person’s driving record or used for any purpose, but the court shall report the fact that aperson has successfully completed a driving safety course and the date of completion to the Texas Department of Public Safety for inclusion in the person’s driving record. The court shall note in its report whether the course was taken under the procedure provided by Subdivision (2) of Subsection (a) of this section for the purpose of i

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providing information necessary to determine eligibility totake asubsequent course under that subdivision. (Emphasis added).
Resolution of your first question depends on whether the underscored language in section 143Aapplies to insurance companies. It has been suggested that the directive that “the charge maynot be pert of the person’s driving record or used for anypurpose” applies only to the courts. This language, however, is broad end is not, by its terms, limited tothe courts. Because theprohibition is somewhat emb iguous, its scope depends on the legislative intent behind the phrase in question endbehind thewhole of section 143A. Legislative intent is derived from ageneral review of enentire enactment eswell es from anexamination of the circumstances existing at the time of enactment, any “evil” tobe corrected by the statute, end the purpose to be accomplished by the statute. The legislature added section 143A to article 6701d in 1975. Acts 1975, 64th Leg., ch. 738, et 2406. As originally enacted, the provision applied only whenthe courts exercised their discretion to apply it. In 1979, the legislature emended section 143A to require the courts to apply the section todefendants whocomply with the three requirements set forth in subsections (a)(2)(A), (B), and (C) of section 143A. Acts 1979, 66th Leg., ch. 610, et 1359; see Attorney General Opinion NW-428 (1982)

. Thebill analysis tothisamendment notes that

[e]ven though [section 143A] is advantageous to people in that it gives them en alternative to traffic fines andraised insurance retes. the law is only applicable tothose persons whomthe court chooses toallow thebenefit. (Emphasis added).
This language indicates that one of the primary purposes for the alternative provided by section 143A is to prevent en increase of insurance premiums.
It is significant that the bill also emended subsection (f) of section 21 of article 6687b, V.T.C.S., the statute governing the department’s jurisdiction over Texas drivers’ licenses, to provide that the department maynot release the reasons for the completion of a driving safety course. The department may only release this information to the courts for the purpose of determining eligibility to take a subsequent course uuder section 143A. The fact that the legislature restricted the access of all persons except. the courts to the information indicates chat the legislature intended the prohibition to apply broadly. Consequently, section 143A prohibits insurers from considering a charge that is dismissed pursuant to section 143Aas pert of aperson’s driving record and from using the dismissal of the charge for “any purpose.”

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Youalso askwhether, if section 143Aprohibits the consideration of the completion of adefensive driving course under section 143Afor insurance purposes, such consideration violates the Texas Deceptive Trade Practices - Consumer Protection Act, Business endCommerceCode section 17.46, thereby allowing the board to prohibit the conduct under article 21.21, section 7, of the Insurance Code. Secrion 7 authorizes theboard to issue acease enddesist order against: persons found, after a board hearing, to have violeted the unfair competition/deceptive acts provisions of the Insurance Code or the Deceptive Trade Practices - Consumer Protection Act. It should be noted that theboard does not hold the exclusive meanstoregulate the legality of insurance practices. See Attorney General of Texas v. Allstate Insurance Company, 687 S.Wx 803 (Tex. App. - Dallas 1985, writ ref

’d n.r.e.). Additionally, section 16of article 21.21 of the Insurance Code creates aprivate cause of action for treble damages for injury fromunfair or deceptive insurance practices (1) prohibited in section 4of article 21.21, or (2) rules lawfully adopted by the Insurance Board under article 21.21, or (3) described in theDeceptive Trade Practices - Consumer Protection Act as unlawful. See Royal Globe Insurance Companyv. Bar Consultants, Inc., 577S.W.2d688, 691 (Tex. 1979).
Subsection (b)(12) of section 17.46 of the Business endCommerce Code, the Deceptive Trade Practices Act, provides that the term

“felse, misleading, or deceptive acts or practices includes

. . . representing that en agreement confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law.” (Emphasis added). Asindicated, section 143Aof article 6701d, V.T.C.S.. prohibits insurers from considering the completion of adefensive driving course under section 143Aaspert of aperson’s driving record or for anyother purpose. Consequently, the practice could fell within et least one express prohibition of the Deceptive Trade Practices - Consumer Protection Act. Aviolation of the act necessarily depends on the facts in each case. Royal See Globe Insurance Co. v. Bar Consultants, Inc., supra; Attorney General Opinion JK-218 (1984).
Your final question is whether, if the practice in question does not violate the Deceptive Trade Practices - Consumer Protection Act, the practice violates other Insurance Code provisions. Because your question is premised onanegative response toyour inquiry about the Deceptive Trade Practices - Consumer Protection Act, it is not necessary toaddress it in full in this opinion. Youshould beaware, however, that anumber of Insurance Code provisions are implicated. For example, article 5.09 of the code prohibits distinctions or discrimination between insureds having like hazards. See also Ins. Code art. 21.21, §4(7). Considering the completion of a defensive driving course as the equivalent of a conviction for insurance purposes raises discrimination questions. 1

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Moreover, article 5.01-l of theInsurance Codeprovides:

Arating plan promulgated bythe State Board of Insurance respecting the writing of motor vehicle insurance, other than insurance written pursuant to Section 35 [assigned risk plans] of the Texas Motor Vehicle Safety-Responsibility Act (Article 6701h. Vernon's Texas Civil Statutes), may not assign anyrate consequence toacharge or conviction, or otherwise cause premiums for motor vehicle insurance to be increased because of a charge or conviction for a violation of the Uniform Act Regulating Traffic on Highways, as amended (article 6701d. Vernon's Texas Civil Statutes)

.. (Emphasis added).
A full discussion of these provisions is beyond the scope of your opinion request.
SUMMARY

Section 143A of article 6701d. V.T.C.S.. the Uniform Act Regulating Traffic on Highways, prohibits insurers fromconsidering the completion of adefensive driving course under section 143Afor the dismissal of atraffic citation as part of a person's driving record for insurance purposes. Subsection (b)(12) of section 17.46 of the Texas Business and Commerce Code (the Deceptive Trade Practices - Consumer Protection Act) defines as unlawful an agreement that "confers or involves rights, remedies, or obligations which it does not have or involve, orwhich are prohibited by law." Consequently, because consideration of adefensive driving course is prohibited by section 143A of article 6701d, V.T.C.S., it Is prohibited by subsection (b)(12) of section 17.46 of the Business and Commerce Code. Additionally, considering the completion of adefensive driving course under section 143Aas the equivalent of a conviction for insurance purposes raises discrimination questions which implicate other orovisions of the Insurance Code.

JIM MATTOX Attorney General ofTexas

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--Y NARYKELLER Executive Assistant Attorney General
JUDGEZOLLIESTJUKLEY Special Assistant Attorney General
RICKGILPIN Chairman, Opinion Cormnittee Prepared byJennifer Riggs Assistant Attorney General

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