, . 

THEA~ORNEY GENERAL 

OFTEXAS 

Honorable J. N. Nutt Opinion No. C-287 

Commissioner of Insurance 

State Board of Insurance Re: 

Austin, Texas 78701 

Whether County 

Mutual Insurance 

Companies organized and operating 

under Chapter 17 

of the Texas Insurance Code and qualified to write casualty 

lines for state wide 

operation may write 

all lines of automobile insurance on all 

motor vehicles in 

addition to those 

enumerated In Art. 

17.01, Texas InsurDear Sir: ante Code. 

You have requested our answer to the following question: 

"Are County Mutual Insurance Companies which 

are organized and operated under Chapter 17 of 

the Insurance Code, quallfled to write casualty 

lines for state wide operation, authorlzed to 

write all lines of automobile Insurance only on 

those vehicles defined, enumerated or listed in 

Article 17.01 of the Code, or may such companies 

write all lines of automobile Insurance on all 

motor vehicles as that term is used or defined 

in Article 5.01 of the Code, specifically including taxicabs, long haul trucks and other motor 

vehicles used for commercial purposes or for hire?" 

Your request noted certain prior Attorney General's 

opinions which dealt with various facets of this general 

problem and are of assistance in answering this question. 

Attorney General's Opinion S-168, held that, by meeting 

the requirements of Art0 17.25, of the Texas Insurance Code, 

as amended, a County Mutual Insurance Company could write 

liability insurance on automobiles. This opinion dealt 

with the amendment found In Acts 1955, 54th Leg., Chap 117, 

-1374- 
Honorable J, N. Nutt, page 2 (c-287 ) 

.<'

which was an extension of the specific authority found In 

Art, 17.01of the Texas Insurance Code as to types of insurance doverage available to County Mutual Insurance Companies. 

Attorney GeneraPs Opinion NW-532, held that by matntainlng 

a surplus of $225,OOO.OO, which is equal to'the minimum requirement for stock companies writing similar lines of insurance, county mutuals could write all lines of automobile 

insurance. Your current request requires us to resolve the 

question of whether the holding in Attorney General's Opinion 

NW-532 included the authority to write all lines of insurance on all automobiles or simply all types of coverage on 

those vehicles enumerated in Art, 17.01. 

The salient facts covering the background and historical 

development of County Mutual Insurance Companies are as follows: 

1. The financial requirements for the formation 

of County Mutual Insurance Companies were initially 

quite limited. Acts 1937, 45th Leg., Ch. 99. 

2, The surplus requirements have been strengthened 

until they are as stringent as those imposed on 

stock companies writing all lines of automobile 

Insurance state wide. Article 17,ll (c), T.I.C., 

as amended. 

3. In addition to the surplus requirements, 

a County Mutual Insurance Company Is prohibited 

from assuming a risk on any one~hazard greater 

than five (5%) per cent of its assets, unless 

au& excess shall be promptly reinsured. Art. 

17.25, Sec. 1, T.I.C. 

4 

ject'to 

County Mutual Insurance,Companles are subthe uniform automobile policy provisions 

of the Texas Insurance Code. Attorney General's 

Opinion NW-401. 

The authority of County Mutual Insurance' Companies to 

write certain lfnes of insurance was originally stated In 

Article 17.01 of the Texas Insurance Code. This authority 

was broadened in 1955 to read as follows: 

County Mutual Insurance Companies 

qualifying to write casualty lines for State wide 

operation may write all linesof automobile Insurance. e D eU A t lo55 54th Le 

eh., 8 37A, ~rt.~17:25: Sec. l,gTt.IY;l. 

(Emphasis added.) 

i! 

-1375- 
Honorable J. N. Nutt, page 3 (C-,287 ) 

Article 17.22 of'the Texas Insurance Code exempts County 

Mutual Insurance Companies from the operation of all'other 

insurance laws of'this State with certain exceptions. While 

Art. 5.01 of the Texas Insurance Code Is not controlling In 

determining the meaning of "all lines of automobile insurance," 

it is a legislative definition of the term "automobile lnsurante a" 

Article 5.01 provides In part as follows: 

"Motor vehicle or automobile insurance as referred to in this subchapter shall be taken and 

construed to mean every form of insurance on any 

automobile or other vehicle hereinafter enumerated 

and its operating equipment or necessitated by 

reason of the liability Imposed by law for damages 

arising out of the ownership, operation, maintenance, or use’ in this State of any automobile, 

motorcycle, motorbicycle, truck, truck-tractor, 

;;a,;:;;, trac,tion engine, or any other self-propelled 

and including also every vehicle, trailer 

or semiirailer pulled or towed by a motor vehicle, 

but excluding every motor vehicle running only 

upon fixed rails or tracks. Workmen's Compensation Insurance is excluded from the foregoing 

definition.' 

The term "automobile insurance" Is defined in 7 Tex.Jur.2d 

228, Insurance Sec. 1, as follows: 

'For the, dual purpose of standardization and 

convenience,. the term 'automobile' is applied in 

a broad sense by automobile insurers. As used by 

such insurers, the term refers not only to passenger cars, but also to trucks, tractors, motorpropelled farm machinery, and various other types 

of motor vehicles. Furthermore, as thus employed 

the term sautomobile' is as comprehensive as the 

term 3motox vehicle.'" 

Automobile Is defined in Black's Law Dictionary, (4th 

Ed., 1951), 169, as follows: 

"A vehicle for the transportation of'persons 

or property on the highway, carrying its ;wn motive 

power and not operated upon fixed tracks. 

In Couch on Insurance (2d Ed. 1959) Sec. 1x20, p. 49, 

we find automobile insurance defined as: 

-1376- 
- . 

Honorable J. N. Nutt, page 4 (C- 287 ) 

"Automobile insurance assumes various forms, 

such as liability, 'property damage, collision, 

fire, theft, transportation, et cetera. When the 

term is used without qualification, It is generally 

understood that liability Insurance or In other 

words, indemnity against liability for personal 

injuries or for losses sustained by reason of lnjuries inflicted as a result of the operation of 

the insured car, is intended." 

After study of the Texas Insurance Code and the above 

mentioned definitions, we-are of the opinion, and you are 

advised that since the Legislature placed no'restrlctlons 

upon the term "all lines of automobile insurance," it is 

to be given the fullest meaning, which Includes, but is not 

restricted to, the definition found In Art. 5.01. 

SUMMARY 

County Mutual Insurance Companies organized and 

operating under Chapter 17 of the Texas Insurance 

Code and qualified to write casualty insurance 

state wide, may write all lines of automobile lnsurance on all motor vehicles. 

Yours very truly, 

WAGGONER CARR 

Attorney General of Texas 

APPROVED: 

OPINION COMMITTEE: 

W. V. GEPPERT, Chairman 

Joe R. Long 

Ed Bolding 

J. S. Braeewell 

Paul Phy > 

APPROVED FOR TKE ATTORNEY GENERAL 

BY: Stanton Stone L,1377