Court Opinion

ID: 4134121
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:46:18.891393+00
Date Added: 2024-06-11T14:34:14.785068
License: Public Domain

Honorable Ned Price,    Chairman             Opinion   No.   M-   546
Honorable   Durwood Manford,   Member
Honorable Charles   D. Mathews,  Member
State Board of Insurance
1110 San Jacinto
Austin,  Texas 78701                Re:      Whether H. B. 203 and H. B.
                                             378, Acts 61st Leg.,    R,S. ,
                                             1969 (concerning   the pur -
                                             chase of liability insurance
                                             by State agencies) impose
                                             any obligation upon the State
                                             Board of Insurance other
                                             than the promulgation   of an
Dear Sirs:                                   insurance   form.

          In your recent letter you request an answer to the ~above cap-
tioned question.      You point out that Section 1 of H. B. 203 (Acts 61st
Leg.,   R. S.,   1969, ch. 797, p. 2357) codified as Section 1 of Article
6252-19a,     Vernon’s   Civil Statutes, reads,  in part, as follows:

                ‘1. . . All liability insurance so purchased
        shall be provided on a policy form or forms ap-
        proved by the State Board of Insurance as to form
        and by the Attorney General as to liability.   ”

The same language appears in Section 1 of Article       6674s-1,  Vernon’s
Civil Statutes, (H.B. 378, Acts 6lst Leg., R.S.,        1969, ch. 212, p. 617. )

         The above quoted provision of the statutes in question is wholly
silent as to any duty of the Board to fix or audit the rates which are
charged for the insurance in question,   and deals only with the subject
of the policy form or forms evidencing such insurance’coverage.          In
your letter you point out that your question arisesby     r.eason of the follow-
ing facts:   The above quoted provisions  are practically    the same as those

                                    -2608-
Hon.   Ned Price,   et al,   page 2                M-   546

found in Section 1 of Article 6166210,     V. C. S. , which authorfnes the
Texas Prison Board (now called the Texas Department of Correct~ions)
to insure its employees   against liability arising from the operation of.,
motor vehicles.   That statute, which was enacted in 1933, provides,
in part:

                   ‘1. . . All insurance taken out by the said
         Board for and in behalf of the benefits of the State
         shall be on forms approved by the Insurance Com-
         mission as to form and by the Attorney General as
         to liability. ‘I

        You further point out that in the administration     of the statute
last mentioned the State Board of Insurance not only approved the lan-,
guage   of the contract of insurance through which the Texas Prison.’
Board obtained coverage under Article      6166210,   but also it undertook
to audit the in6uranc.e account for the purpose of determining whether.
correct rates and rate modifiers     had been applied.    This practice has
continued down to the present date.     After the Board has ascertained
that the policy contains both the correct form and the correct rates,       it
is transmitted   to the Attorney General setting forth such facts.      You
further point out that the practice of making an audit of the rates itnder
the 1933 statute has not been burdensome      in that it requires only appro,xi-
mately ten to sixteen man hours per year, but that if it is followed in the
administration    of the new statutes above mentioned .it would involve ap-
proximately    one thousand man hours per year, for which no appropria-
tion has been made by the Legislature.

          In our opinion the assumption        of the rate-checking    function in
the administration       of Article 6166210 would not constitute an adminis-
trative interpretation       of the statute which, by reason of legislative
acquiescence     thereto,     would change the meaning of the statute so as
to include rate-checking         as one of the duties of the Board under the
statute.    Even  if it.  constituted  an interpretation,    rather than a mere
practice based upon general administrative            authority,   it could not af-
fect the meaning of the statute.          The statute is not ambiguous and the
administrative     practice thereunder       is not thus relevant to its con-
struction.     The rules of statutory construction,         including the doctrine
of legislative   acquiescence,       would not be applicable.      McCallum    v:

                                        -260’9-’
Hon.   Ned Price,    et al,   page   3            M-   546

Associated   Retail Credit Men of Austin,   41 S.W.2d 45 (Tex. Corn. App.
1931).   See Calvert v. Kadane, 427 S.W.2d 605 (Tex., Sup. ‘1968);     In
enacting the above quoted provisions,    the Le’gislature did not impose
upon the Board any duty other than the approval of policy forms.

        The Board does have, however,         a duty under Articles    1:04(b)
and (c) and 5.01,  Texas Insurance Code, to fix and maintain fair, reason-
able, and just insurance premium rates in accordance          with its published
rules and regulations   in this connection.     The statutes mu& be read in
pari materia with Articles    6252-19a    and 66746-1.    The Cornmissioner’s.
duty to enforce such regulations    may, in the Board’s discretion,        involve
an auditing of the rates as a means of enforcement.         The authority to
make such an audit is implicit in these statutes when taken together,           but
the extent of any such audit lies within the sound discretion       of the Board,
and consonant with the availability     of the funds appropriated    for such en-
forcement   purposes.    We  will not  attempt  to relate here  the  .various  cir-
cumstances   under which a duty could arise to require an audit.

                                     SUMMARY

                 Section 1 of Article 6252-19a,    V. C.S. (H. B.
         203, Acts   61st Leg.,  R.S.,   1969, ch. 797, p. ,2357)
         and Section 1 of Article 66746-1,    V. C. S. (H. B. ‘378,
         Acts 61st Leg.,   R.S.,   1969, ch. 212,.-p.  617) impose
         no obligation upon the State Board of Ipsurance other
         than the approval of policy forms; h’owever,     such
         statutes construed in pari materia with Articles      1. 04
         and 5.01,   Texas Insurance Code, require.the      State
         Board of Insurance to fix and maintain fair, reason-
         able, and just insurance premium rates,       and the audit-
         ing of rates may become a means of enforcement,          which
         matter is left to the sound discretion   of the Board and
         consonant with the availability   of funds for such enforce-
         ment purposes.

                                         -2610-
                                                                 -.   ”

Hon.     Ned Price,     et al,    page 4              M-   546

Prepared     by Ralph R. Rash
Assistant    Attorney General

APPROVED:
OPINION COMMITTEE

Kerns     Taylor,     Chairman
Alfred    Walker,      Co-Chairman
Wardlow Lane
Malcolm  Quick
Jack Sparks
Roger Tyler
Terry Goodman

Meade F. Griffin
Staff Legal Assistant

Nola White    ”
First Assistant        Attorney    General

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