TEIEATJ~TORNEYGENEXCAL 

OF 7rEms 

I-Ion. William A. Harrison 

Commissioner of Insurance 

International Life Building 

Austin 14, Texas 

Opinion No. WW-1062 

Re: Whether an association of 

employees under the stated 

facts are entitled to the exemption of Art. 14. 17 of the 

Texas Insurance Code even 

though its operating expen,- 

se8 exceed $300 per month. 

Dear Sir: 

Your request concerns the interpretation of certain amendments by the ,Legislature in 1959 to that portion of the Texas Insurante Code exempting certain associations from some aspects of the 

mutual assessment laws. These exemptions are found in Art. 14.17 

of said Code. * Prior to the 1959 amendments, Art. ,14,. 17 stated 

these exemptions in the following terms: 

‘1. . -provided no provision of this and the 

preceding article shall be construed to apply to 

associations which limit their membership to 

the employees and the families of employees of 

any particular designated firm, corporation, or 

individual, and which are not operated for profit and which pay no commissions to anyone and 

whose operating expenses do not exceed One 

Hundred ($100.00) Dollars per month;. . . ” 

“Reference throughout are to the Texas Insurance Code unless otherwise indicated. 
Hon. William A. Harrison, page 2 (WW-1062) 

During the 56th Legislature in 1959, this same exemption provision 

was twice amended, first, by S.B. 241, Acts 1959, page 661, ch. 

304, and then by H. B. 796. Acts 1959, page 1085, ch. 496. As finally 

passed, both bills were identical except that the former increased 

the permissible expense factor from $100 to $150, while the ,latter 

purported to increase the permissible expense factor from $100 to 

$300. In final form, then, Art. 14. 17 now reads as follows: 

‘1. . . provided no provision of this and the preceding Article shall be construed to apply to associations which limit their membership to the employees 

and the families of employees of any particular designated firm, corporation, or individual, nor shall it 

apply to associations which limit their membersh,ip to 

bona fied borrowers of a Federal agency in Texas and 

members of the borrower’s immediate family who are 

living with him and who are not engaged in nonfarm 

work for their chief income, and which association 

has been in existence for at least five (5) years, and 

which are not operated fork profit and which pay~no 

commissions to anyone and whose operating expenses 

do not exceed Three Hundred Dollars ($300) per month,; 

. . .” 

One additional class of associations is exempted, namely: associations 

which limit their membership to borrowers of a Federal agency, etc. 

Your question is whethe~r the limitations as to the amount of operating 

expen,ses applies to the associations named other than associations of 

borrowers of a Federal agency. 

At the outset there does not appear to be any evidence that the 

Legislature intended to eliminate this restriction which for almost 

thirty years has conditioned the general exemption granted by Article 

14.17 and its predecessors and yet continue a restriction of the same 

nature for a new class of associations brought within the exemption. 

The last expression by the Legislature on this subject matter was H. B. 

796, and it is with this measure that we are concerned. Its caption 

provides : 
.- 

Hon. William A. Harrison, page 3 (WW-1062) 

“An act amending Art. 14.17 of the Texas Insurance Code so as to increase the One Hundred Dollars 

($100) per month expense factor of certain associations 

to Three Hundred Dollars ($300) per month; providing 

additional exemptions; and declaring an emergency. I’ 

Two purposes clearly appear from the caption: 1) to increase the $100 

per month expense factor of certain associations to $300 per month, and 

2) to provide additional exemptions. It is at once apparent that the 

phraseology of increasing the expense factor could only apply to those 

associations previously exempt. The primary objective of any attempt 

to interpret legislation is to give effect to legislative intent, and it is 

difficult to conceive of any clearer evidence of such intent than is present in the instant caption. Since the actual language of the amendment 

is not inconsistent with the manifest legislative intent, we hold that the 

restriction on the expense factor applies to all of the associations 

exempted by Article 14. 17. 

SUMMARY 

To be an exempt association under 

Article 14. 17 of the Texas Insurance 

Code, expenses may not exceed $300 

per month. 

Very truly yours, 

WILL WILSON 

Attorney General of Texas 

BY isLIts lL!LAkL 

Fred B. Werkenthin 

Assistant Attorney General 

FBW:lmc 

APPROVED: 

OPINION COMMITTEE: 

W. V. Geppert, Chairman 

Jerry Roberts 

Thomas Burros 

B. H. Timmins 

W. 0. Shultz 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: Morgan Nesbitt