Hon.William A. Harrison

Commissioner of Insurance State Board of Insurance Austin, Texas Opinion No. C- 101 Re: (1) Whether “credit insurance” in Article 21.07-1, Sec. 1, Par. (b)(5), T. I.C. , refers only to credit insurance as defined in Article 3. 53, T.-I. C. ; (2) Whether agentslicensed pursuant to Art. 21.07-1, T.I.~C., need obtain an additional license if they engage in activities specified in Article 21.07- 1, See; 1, Par. (b)(5). Dear Mr. Harrison:

You have requested our opinion as to the following questions,: 1. Does the exception in Art. 21.,07-l, Sec. 1. Par. (b)(5) refer only tothe credit insurance defined in Art. 3.53 of the Texas Insurance Code; or does this exception also embrace insurance not included,in the definition set out in Art. 3.53 (e.g., a policy, ofinsurance sold finconnection with a loan in excess of $1,000. OO)?

2. May an insurance agent, licensed under Art. 21.07-l and acting exclusively for legal reserve companies, engage in the activities specified~in Art. .21.07-l, Sec. 1, Par. (b)(5) ofthe Texas Insurance Code without obtaining an additional license?

In regard to your first question, Article 21.07-1, T.-I. C., provides for the qualification andlicensing ofagents oflegal reserve life insurance companies authorized to dobusiness in Texas. Section 1 (b)(5) provides that the term “life insurance agent” as used in this article shall not apply to:

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“An agent selling credit life, health andaccident insurance issued exclusively in connection with commercial loan, or acting as agent or solicitor for health and accident insurance under license issued pursuant to the provisions ofArticle 21. 14 of the Texas Insurance Code. ‘I Article 3.53, Sec. 1 (B) defines “Credit Life Insurance” and “Credit Health and Accident ~Insurance” as follows:

“Credit Life Insurance, I’and “Credit Health and Accident Insurance” mean pereonal insurance inwhich the insured are bor,r.owers of sums ofmoney not exceeding ~0neThousand ($1, 000. 00) ‘Dollars fr,om lenders :whoretain an interest .inthe insurance as security to the loan, and any.other personal insurance written in connection with or as part of such loan transaction. “Credit Health Insurance” and “Credit Health and Accident Insur**ance ”**  as used~in this article shall never be taken-to mean or refei to any contract insuring performance of any undertaking or agreement, and are expressly limited intheir coverage to the contingencies of deathor loss resulting from sickness and accident. ‘I Article 3.~53.was originally enacted in 1949, Acts 51st Leg., R.-S., ~1949. p. 13,2, ch. 81, andwas amended in 1951, Acts ,52ndLeg., R.S. 1951, p. 336. ch. 207. The statute as amended was included as Article 3. 53af the Texas Insurance Code, Acts 52nd Leg., R.S. 1951., p. 868, ~ch. 491..

Article 21.07-l was enacted in 1955, Acts 54th,Leg., .R:S. ‘1955, p. 621, ch. .213. These two articles of,the Texas Insurance Code are ,in reality,two separate statutes enacted by different sessions of the Legislature, and~included in the Texas Insurance Code at different sessions. Ipanswering your questions ,it become8 material to ascertain the intent of the Legislature in enacting the provisions ofthe two different articles.

The intention and meaning ofthe Legislature is to be ascertained pr,imarily from the language of the statute read as awhole. Ifthe statutory language clearly and distinctly reveals the legislative intent there is no occasion to look elsewhere. 39 Tex. Jur. 176 893 and cases cited therein.

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Both the title and language ofArticle 3.,53 manifest a clear legislative intent to regulate Credit Life Insurance and Credit Health and Accident Insurance as defined bythat statute.

Article 3. 53. Sec. 1 (B)(2) reads as follows:

., ,. “The provisions :ofthis article shall apply only to

the writing of “Credit Life Insurance” and “Credit Health and Accident Insurance” as defined in this article, both as to “Insurer” and “Insurance Agent” and “Lender Agent” as defined in thin article. I’

_. 3’ Article 3.~53, Set; 14,. provides,:

‘:?‘Nothing in,this article shall ever be construed to include or affect in any manner group life insurance issued under the provisions ofArticle 3.50, or .aisyother.kind of insurance written by.jnsurance carriers ortheir insurance agents otherthan credit

.’ life .insuran&e and credit health andaccident insur ante as defined herein. ” Itis obvious from theae’two provisions that the Legislature in

_ ‘Article 3.53’expresely.defined the terms ~Xredit Life Insurance” and I. “Credit Health and Accident ~Insurance*V for the purposes of.that article only and explicitly restricted the use of thos,eterms as dsfined,to that article.

Article 21.07-1, as io noted abwe, was enacted six years after Article 3. 53. By~thewell-known rules of statutory construction,. it may be properly presumed that the Legislature bad knowledge, of the existing statutes andthe effect thereof whenthey enacted the later statute. Cole :,~v.~State,. 106 Tex. 472.; 170 S.W. 1036 (1914); Stephens Countyv. Hef;ler. 118 Tex. 397, 16S. W. 2d 804 (1929); Railroad Commission of Texas v. Texas &New Orleans Ry. Co., 42 S.W.2d 1091 (Tex.Civ.App., 1931, err. ref. ). Article 21.07-l relates to the licensing of agents of legal res.erve life insurance companies and establishes the qualifications and procedures under which individuals will be licensed as agents for legal reserve life insurance companies. Sec. 1 (b)(5) ofthe article quoted above exempts

“agents selling credit life, health and accident insurance issued ~exclusively

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: ‘in connection with commercial~loan.

. .‘1fr~omthe licensing pr,oviaione of .thatarticle. The terms ,**credftlife, health andaccident insurance” are not further defined by Article 21.07-1,. nor is there any reference to those terms as defined by Article 3. 53.

The Legislature when enacting Article 21.07- 1is presumed to have known of Article 3. 53~,its provisions , andthe effect of those provisions. The Legislature in Article 21.07- 1,made no attempt to incorporate the earliek statutory definition of credit ~insurance contained in Article 3.53 into ,the later statute, nor did they attempt either expressly or impliedly to repeal any of the provis,ions of Article 3. 53 restricting the provisions of that statute solely to that article. The two articles treat two different subjects andwere enacted to accomplish two different objects. Article 21.07-,I, Sec.. lo merely creates a class of persons who for ,thepurposes of that Article are not required to be licensed as insurance agents pursuant to the terms ofthat article. Inanswer to your first question it isour opinion that the credit life, health and~accident.insurance referred to in Article 21,.07-l) Section 1 (b)(5) -does not Ryderonly to.snch;credit insurance asis defined ,inArticle 3.53.

Attorney General’s Opinion No. WW-297-A, while not considering .the question rais:ed her.ein, contains aever~algeneral~statemente ~tothe effect thatthe credit insurance of Article 21.07-1, Sec. 1 (b)(S) refers solely to credit insurance as defined in Article 3.,53, -Sec. 1 (@)(I.). We hereby overrule such statements finthat ,opinionwhich conflict with the opinion expreesed herein.

In regard to your second question, Article 21.07-I .is the statute regulating.&? qualifications and licensing procedures for agents within the ~scopeofthat article, who represent legal reserve life insurance companies authorized to do~bueineasin <Texas. That article by its express,terms repeals provisions .ofArticle 21.07, Texas Insurance Code, to the extent .only as applicable to such agents.

article 21.07-l. Sec. 1 (b) defines “life insurance agents” for the purposes ofthat article as %ny person who is an authorized agent .ofa legal reserve life insurance company, and any person who is a sub-agent of such agent, who acts as such in the solicitation .of, negotiation for, or procurement of, norcollection of pr,emium **OR,** an insurance or annuity **,cOntraCt** with a

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legal reserve life insurance .company. Article 21.07-1, Sec. 1 (d) defines “insurance or annuity contract” as “a contract or policy of life, health or accident :(including hospitalization) insurance, or an annuity contract, issued by any legal reserve company or insurer engaged in the business ,ofwriting life, health or accident (including hospitalization) insurance, or an annuity contract. ” Article 21. 07-l make-s no attempt to define the authority of an agent licensed thereunder except as stated above. Such an agent must be “authorized” by the legal resolve life insurance company to act inkite .behalf inthe negotiation of‘insurance contracts. It is clear that under these statutory provisions the agent licensed pursuant to the provisions ofthat article inay write whatever type of insurance~buainees the company is permitted towrite. Thp authority of the agent is co-extensive in that respect with that ,ofthe company which he represents.

Article 21.07-l. Sec. 1 (b)(5) excludes from the definition of

“life-insurance agent, I1for the purposes of Article 21.07-1, “an agent selling credit life, health and accident insurance issued exclusively in connection wit%‘6ommercial lo&.

. .” This exclusion merely pr~ovides &at a.persG acii&&s~an agent for a legal reserve life insurance company in that particular capacity need notbe licensed under the provisions ofthat article. Of course, if each an agent acting **.OA** behalf of a.legal reserve life insurance company be simultaneously engaged in other activities not exempted under Sec. 1 (b)(5). or other statutory exemptions of that article, he must obtain the required~license under Article 21.07-l:: ‘: .

Article 21.01. T. I.C., requires that all persons ,be licensed by the State Board of Insurance if they act as agents .orotherwi8.e andaid~in then transaction of the business of insurance within this State. Persons licensed pursuant to Article 21.07-l are licensed as agents of LegaVReserve Life Insurance Companies, and have a license to act as agents as required by Arficle 21.01. No prwision of Article 21.07-l seeks to limit the authority of agents to act upon.behalf ~of a legal reserve life insurance company Oncethe requisite license is obtained pursuant to that article.

Inanswer t,oyour’second question, it is our opinion that an insurance agent licensed under Article 21.07- 1 andacting exclusively for legal reserve companies may engage in the activities specified in Article 21.07- 1, Sec. 1 (b)(5).of the Texas Insurance Code without obtaining an additional 1icens:e.

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Hon. William A. Harrisow Page 6 (C-101 )

SUMMARY The phras:e, “credit life, health andaccident insurance issued exclusively in connection with commercial lean.
. . 11, ,in Article 21.~07- 1, Sec. 1 @MS), T. 1.C., does not refer only to.credit ineurante as,defined in Article 3.53.. T. I.~ C. An insurance agent licensed pursuant to Article ~21.~07-1,neednot,ebtain an additianal license in order to engage inthe activities specified in Art. 21.07- 1, sqc. 1I (5). Yours truly, WAGGONER CARR Attorney General .ofTexas

APPROVED: P. Grady.Chaadler , **Chairman** V. F. Taylor w. ~,O. s&ultz Jamee Stufer JohnReeves APPROVED.PGRTHEATTORNEYGENERAL BY: .StantonStone

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