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 to the 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, of insurance sold fin connection 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) of the 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 and licensing of agents of legal reserve life insurance 

companies authorized to do business 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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Hon. William A. Harrison, page 2 (C- 101 ) 

“An agent selling credit life, health and accident 

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 of Article 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 in which 

the insured are bor,r.owers of sums of money not exceeding ~0ne Thousand ($1, 000. 00) ‘Dollars fr,om lenders 

:who retain an interest .in the 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 Insurance” 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 in their 

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, and was amended in 1951, Acts ,52nd Leg., R.S. 1951, 

p. 336. ch. 207. The statute as amended was included as Article 3. 53 af 

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. Ip answering your questions ,it become8 material to ascertain the intent of the Legislature in enacting the provisions of the two different articles. 

The intention and meaning of the Legislature is to be ascertained 

pr,imarily from the language of the statute read as a whole. If the 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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HOA. William A. Harrison, page 3 (C-101 ) 

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

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

., ,. 

“The provisions :of this 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 of Article 3.50, or 

.aisy other.kind of insurance written by .jnsurance 

carriers or their insurance agents otherthan credit 

.’ life .insuran&e and credit health and accident insur 

ante as defined herein. ” 

It is 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,e terms as dsfined,to that article. 

Article 21.07-1, as io noted abwe, was enacted six years after 

Article 3. 53. By~the well-known rules of statutory construction,. it may 

be properly presumed that the Legislature bad knowledge, of the existing 

statutes and the effect thereof when they enacted the later statute. Cole 

:,~ v.~ State,. 106 Tex. 472.; 170 S. W. 1036 (1914); Stephens Countyv. Hef;ler. 

118 Tex. 397, 16 S. 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) of the article quoted above exempts 

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

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Hon. ~William A. Harriron, page 4 (C-101 ) 

: ‘in connection with commercial~loan. . . ‘1 fr~om the licensing pr,oviaione of 

.that article. The terms ,**credft life, health and accident 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- 1 is presumed to have 

known of Article 3. 53~, its provisions , and the 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 and were 

enacted to accomplish two different objects. Article 21.07-,I, Sec.. lo 

merely creates a class of persons who for ,the purposes of that Article are not 

required to be licensed as insurance agents pursuant to the terms of that 

article. 

In answer to your first question it is our opinion that the credit life, 

health and ~accident.insurance referred to in Article 21,. 07-l) Section 1 (b)(5) 

-does not Ryder only to.snch;credit insurance asis defined ,in Article 3.53. 

Attorney General’s Opinion No. WW-297-A, while not considering 

.the question rais:ed her.ein, contains aever~al general~statemente ~to the effect 

that the 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 fin that ,opinion which 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 

~scope of that article, who represent legal reserve life insurance companies 

authorized to do ~bueineas in <Texas. That article by its express,terms repeals 

provisions .of Article 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 of that article as %ny person who is an authorized agent .of a 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, nor collection of pr,emium OR, an insurance or annuity ,cOntraCt with a 

-5oo- 
Hon. William A. Hariison, page 5 (C-101 ). 

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 ,of writing 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 in kite .behalf in the negotiation of ‘insurance 

contracts. It is clear that under these statutory provisions the agent 

licensed pursuant to the provisions of that article inay write whatever 

type of insurance~buainees the company is permitted to write. Thp 

authority of the agent is co-extensive in that respect with that ,of the 

company which he represents. 

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

“life-insurance agent, I1 for 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 not be licensed under the provisions of that 

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 .or otherwi8.e and aid~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 Once the 

requisite license is obtained pursuant to that article. 

In answer t,o your’ second question, it is our opinion that an insurance agent licensed under Article 21.07- 1 and acting 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 and accident 

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 ,need not ,ebtain an additianal license in order 

to engage in the activities specified in Art. 21.07- 1, 

sqc. 1 I (5). 

Yours truly, 

WAGGONER CARR 

Attorney General .of Texas 

APPROVED: 

P. Grady .Chaadler , Chairman 

V. F. Taylor 

w. ~,O. s&ultz 

Jamee Stufer 

John Reeves 

APPROVED.PGRTHEATTORNEYGENERAL 

BY: .Stanton Stone 

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