TEE A-JTORIQEY ~GE%YERAL 

OF ?JYExAs 

AURm l~(-rlilxb 

April 9, 1953 

Hon. Garland A. Smith 

Casualty Insurance Commissioner 

Board of Insurance Commissioner~$ 

Austin 1, .Texas 

Gpinion No. S-28 

Dear Sir: 

.’ 

Re:~ Applicability .of Sec. 35 

of Art.’ 6701h. V.C.S., the 

Assigned Risk Plan. to a 

casualty insurance company writing ‘insurance 

only on motor buses and 

motor trucks holding motor carrier permits from 

the Railroad Commission. 

,: 

You have iequested..our’opinion,as tom the: applicability of 

Section 35 of Article .6701h. Vernon’s Civil,Statutes, to a casualty insurance company which confines itself to writings liability insurance on certificated motor bus and motor truck carriers.~ Section35 of,Article 6701h 

provides for the Assigned Risk Plan, ,this-.section.,being a part of the Texas 

Motor Vehicle Safety Responsibility Act. Pursliant~to that section, you inform us that the Board of Insurance Commissioners approved a plan, effective January 1, 1952, calling foi’the assignment of less~ attractive risks 

to casualty insurance companies fin Texas; The Tr’ansptiit Insurance’Company ,of Texas, a casualty ‘insuranc~e company which doesnot write liability 

insurance other than on certificated ‘motor bus a& motor’truck cdrriejr.s. 

has,re,sisted participation in the plan and~thd~acce&nce of risks assigned 

to, it,under the plan, Andy you therefore ask, our opinion ,as tothe follciwmg 

two questions: 

“( 1) Is the Transport ,‘Insurance Company required ‘~ 

to participate in the plan even though it might provide no 

insurance on motor vehicles subject’to assignment under 

the Act. and 

“(2) Must the Transport Insurance’~Company ac- ” 

cept assignments based on all of its Texas’motor vehicle 

liability insurance premi,ums or only those premiums derived from m~otor ‘vehicles subject to the ‘~Motoi Vehicle 

Safety Responsibility Act.* .” 
Hon. Garland A. Smith, papc 2 (S-28) 

Your letter informs us that the Transport Insurance Company of Texas is a casualty insurance? company, and under the Insurance 

Code, such companies are authorized to issue motor vehicle liability palicies in the State of Texas. 

Sec. 35 of Art.. 6701h, V.C.S., provides, in part, as follows: 

“Sec. 35. Subject to the provisions of Section 9 of 

Article 4682b of Texas Revised Civil Statutes, insurance 

companies authorised to issue motor vehicle liability policies in this State may establish an administrative agency 

and make necessary reasonable rules in connection therewith, relative to the formation of a plan and procedure to 

provide a means by which insurance may be assigned to an 

authorized insurance company for a person required by 

this Act to show proof of financial responsibility for the 

future and who is in good faith entitled to motor vehicle 

liability insurance in this State but is unable to secure it 

through ordinary methods; and may establish a plan and 

pr,ocedure for the equitable apportionment among such 

authorized companies of applicants for such policies and 

‘for motor vehicle liability policies. including, but not limited to, voluntary agreements ,by insurance companies to 

accept such assignments. WJren any such plan has been 

approved by the Board of Insurance Commrssloners, all 

msurance cornnames authorxsed to rs,sue motor vehicle 

Eabrlity policies in the State of Texas shall subscribe 

fhereto and participate there:&” (Emphasis supple . 

- 

Since the ,Transport Insurance Company of Texas is authorized to write liability insurance on any motor vehicle, under the 

clear and unambiguous language emphasized in the foregoing section, 

such company must subscribe to and participate in any plan apprwed by 

the Board of ~Insurance Commissioners, regardless of any~company policy it may have as to writing certificated motor carriers or preferred 

or extra-hasardous risks. We, therefore, answer ,your first question to 

the effect.~that~if the Transport Insurance ~Company of Texas is authorized 

under its shader to write liability insurance on motor vehicles in Texas, 

it is required to participate in the plan regardless of the risks it may be 

insuring under its presently existing company policy. 

Your second question, however, relates to the assignsne;ht;~ 

of risks $o the Transport Insurance Company of Texas. You inquire 

whether this should be based on the premiums realized by the company 

on certificated motor carriers or on motor vehicles other than certificated motor carriers. In answering this question it is necessary to call 

to your attention the provisions of Smec. 33 of Art. 6701h, which provides, 

in part, a’s follows: 
Hon. Garland A. Smith, page 3 (S-28) 

“This Act shall not apply . . . with respect to any 

motor vehicle which is subject to the requirements of 

Articles 911a (Sec. 11) and 911b (Set, 13) of Texas Revised Civil Statutes; . . a R 

From your letter it appears that the Transport Insurance Company is writing insurance only on motor carriers which have complied 

with the provisions of Art. 91la. Sec. 11. s.nd Art. 911b, Sec. 13, V.C.S., by 

filing a bond or insurance policy with the Railroad Commission in amounts 

required by the Commission. This being true, the motor vehicles which 

the company insures are clearly exceptemi from the provisions of Art. 6701h 

by the unequivocal language pointed out i:n Sec. 33. If such motor vehicles 

are excepted from the provisions of the Act, clearly the premiums realized from liability insurance on such motor vehicles are likewise excepted 

from the application of the Act. The Board’of Insurance Commissioners, 

therefore, under any plan of assigned risks which it has approved, could 

not legally require the assignment of risks to a casualty insurance company predicated upon premiums realized from certificated motor carriers, 

as such vehicles, and any insurance premiums thereon, are excepted from 

the operation of the Act. We therefore answer your second question to the 

effect that the Board of Insurance Commissioners may not approve a plan 

requiring the assignment of risks to a casualty insurance company predicated upon premiums realized solely from certificated motor bus and motor truck risks. 

We further express no opinion as to the constitutionality of either Sec. 35 of Art. 67Olh or of the plan approved by the Board thereunder. 

SUMMAR’I 

A casualty insurance company authorized under its 

charter to write motor vehicle liability insurance is required to subscribe to and participate in the Assigned 

Risk Plan provided for under Art. 6701h. Sec. 35, V.C.S. 

Such company may not be compelled to accept risks predicated upon the premiums realized by the company on certificated motor bus and motor truck companies, which have 

complied with Art. 911a. Sec. 11, V.C.S., and Art. 911b. Sec. 

13, V.C.S. 

APPROVED: Yours very truly, 

C. K. Richards JOHN BEN SHEPPERD 

Reviewer Attorney General 

Willis E. Gresham 

Reviewer 

Robert S. Trotti 

First Assistant 

Ass&s&t‘ 

John Ben Shepperd 

Attorney General