Untitled Texas Attorney General Opinion ( 1988 )

THE ATTORNEY GENERAL
OF TEXAS
April 8, 1988
Mr. L. L. Bowman III Opinion No. JR-889
Commissioner
Texas Savings and Loan Re: Authority of the Savings
Department and Loan Department to obtain
2601 N. Lamar, Suite 201 liability coverage for its
Austin, Texas 78705 officers and employees
(RQ-1203)
Dear Mr. Bowman:
You ask several questions pertaining to article
6252-19a, V.T.C.S., and the Texas Tort Claims Act (Civ.
Prac. & Rem. Code §lOl.OOl et sea.). Several of your
questions relate to the scope of the attorney general's
review of liability insurance policies and any monetary
limits on such policies.
Article 6252-19a, V.T.C.S., authorizes state agencies
which own and operate motor vehicles, aircraft, and
watercraft to insure their officers and employees from
liability arising out of the use of such vehicles or
equipment. V.T.C.S. art. 6252-19a, 51. The attorney
general's responsibility in regard to this liability
insurance is set out in section 1 of article 6252-19a as
follows:
Sec. 1 . . . All liabilitv insurance so
purchased shall be provided on a policy form
or forms annroved by the State Board of
Insurance as to form and bv the Attorney
General as to liability. (Emphasis added.)
You ask first whether there
limit on the amount of liability i~:u``~c,"'``=e~=ge'````
may be purchased under this statute. Specifically, YOU
inquire about the applicability of the maximum liability
C limits set by the Texas Tort Claims Act. In Attorney
General Opinion M-501 (1969), this office addressed the
issue of limitations on the amount of coverage that the
Texas Highway Department was authorized to purchase
p. 4351
Mr. L.L. Sowman III - Page 2 (JM-889)
pursuant to the newly enacted article 6252-19a. That
opinion stated:
With reference to your second question as
to the amount of coverage that may be
purchased, H.B. 203 [article 6252-19a] has
provided no guidelines in this area. The
proper amount of coverage has been left to
the sound discretion of the governmental
agencies involved, and in the event of a
court test it is our view that a reasonable
exercise of that discretion would be left
undisturbed.
Attorney General Opinion M-501 (1969). Since the issuance
of Attorney General Opinion M-501, there has been no
amendment to article 6252-19a establishing a statutory
minimum or maximum coverage level. Therefore, we conclude
that your department has the responsibility to set the
level of coverage for its employees.
Confusion may have arisen about the applicability of
the Texas Tort Claims Act to article 6252-19a, V.T.C.S.,
based on other language found in Attorney General Opinion
M-501. Following the language quoted above, the opinion
read as follows:
In this connection we would point out that
the Texas Tort Claims Act . . . limits
governmental liability to $lOO,OOO.OO per
person and $300,000.00 for any single
incident. It is our view that an individual
policy of insurance under [article 6252-19a]
that did not exceed those limits would meet
the test of reasonableness, provided that in
the exercise of discretion the Highway
Department finds tha~t such is reasonably
necessary.
We do not believe that the Texas Tort Claims Act controls
the amount of coverage which an agency may ob~tain under
article 6252-19a. The Texas Tort Claims Act establishes a
limited waiver of sovereign immunity and prescribes the
maximum governmental liability in certain circumstances.
Article 6252-19a, on the other hand, allows certain state
agencies to obtain liability insurance for employees under
certain conditions. The reference to the Tort Claims Act
in the opinion quoted above was merely intended as a guide
or example to assist state agencies in making reasonable
p. 4352
Mr. L.L. Bowman III - Page 3 (JR-889)
determinations of coverage. To the extent that the
opinion may have been interpreted as imposing the Texas
Tort Claims liability limitations onto article 6252-19a,
Attorney General Opinion M-501 is modified.
To summarize, article 6252-19a, V.T.C.S., does not
prescribe dollar limits on insurance coverage purchased
pursuant to that article. The liability limits esta-
blished in the Texas Tort Claims Act are not applicable to
article 6252-19a.
You next ask whether the attorney general's
responsibility to approve insurance policies "as to
liability" requires the attorney general to make a
determination of the reasonableness of the amount of
liability coverage purchased by a state agency. We think
not. The practice of the attorney general's office in
reviewing policies pursuant to article 6252-19a has been
to determine whether a given state agency is authorized to
purchase insurance under the statute and whether the
policy covers authorized persons and equipment.
The attorney general's policy of not attempting to
determine the reasonableness of particular coverage limits
for a given agency is consistent with the earlier inter-
pretation of the statute in Attorney General Opinion
M-501. The affected state agency, in the first instance,
must exercise its discretion in determining whether to
purchase liability insurance and the amount of coverage it
deems appropriate. A court, in the second instance, is
the appropriate body to evaluate the reasonableness of the
limits obtained by a state agency. Unlike the state agency
or a court reviewing that agency's decisions, the attorney
general is not in a position to find facts regarding the
reasonableness of a particular amount of coverage. The
amount of coverage that is reasonable may vary from agency
to agency and between individual departments or sections
within the same agency.
You also ask whether the attorney general will
approve an insurance policy which provides, at no added
cost to the state, additional coverage that is not
authorized by article 6252-19a. We understand that the
State Board of Insurance has not prescribed a specific
form for use by state agencies pursuant to article
6252-19a. Rather, a state agency must use one of the
general forms for motor vehicle liability insurance that
has been approved by the board for general commercial use
in the state. Consequently, a state agency purchasing
p. 4353
Mr. L.L. Bowman 111 - Page 4 (JM-889)
liability insurance under the statute may incidentally
receive other coverage. Because no state funds are being
expended for this other coverage, this office neither -,
approves nor disapproves this portion of the policy.
Finally, you raise the possibility of your department
purchasing liability insurance under the Texas Tort Claims
Act and ask: (1) whether the department would receive
additional protection by also purchasing insurance under
article 6252-19a, V.T.C.S.; and (2) whether the State
Board of Insurance and the attorney general must review a
policy purchased by the department pursuant to the Texas
Tort Claims Act. Section 101.027 of the Civil Practice
and Remedies Code governs liability insurance purchased
under the Texas Tort Claims Act. It provides in part:
(a) Each governmental unit may purchase
insurance policies protecting the unit and
the unit's employees against claims under
this chapter.
The Savings and Loan Department is a governmental unit as
defined by the Texas Tort Claims Act, and is covered by
section 101.027. However, we note that the General
Appropriations Bill for the current biennium contains the
following provision:
Sec. 54. TORT CLAIMS ACT. None of the
funds appropriated in this Act may be
expended for the purpose of purchasing
policies of insurance covering claims
arising under the Texas Tort Claims Act.
General Appropriations Act, Acts 1987, 70th Leg., 2d C.S.,
ch. 78, art. V, 554, at 1120. A similar restriction has
been included in previous appropriation bills. See
Attorney General Opinion Nos. JM-625 (1987); JM-551
(1986); H-900 (1976).
It is our understanding that there are no funds
available to your department that are not subject to
the restriction of section 54, article V, of the General
Appropriations Act. Therefore, we decline to address the
first pa* of your question. Assuming a state agency has
funds available for the purchase of insurance under the 1
Texas Tort Claims Act, we have found no provision in the
act which requires this office or the State Board of
Insurance to approve the purchase.
p. 4354
Mr. L.L. Bowman III - Page 5 (JM-889)
SUMMARY
(1) Article 6252-19a, V.T.C.S., sets no
maximum or minimum monetary coverage available
to a state agency covered by the article.
(2) The statutory limits of liability
prescribed by the Texas Tort Claims Act do not
apply to an insurance policy purchased by a
state agency pursuant to article 6252-19a,
V.T.C.S.
(3) The attorney general does not review
the amount of liability coverage purchased by
a state agency pursuant to article 6252-19a.
(4) The current general appropriations
act prohibits the use of appropriated funds
for the purchase of insurance under the Texas
Tort Claims Act. The attorney general does
not have a statutory obligation to review
insurance purchased pursuant to the act.
LL.JJJ
Very truly yo
.
JIM MATTOX
Attorney General of Texas
MARY KELLER
First Assistant Attorney General
LOU MCCRFARY
Executive Assistant Attorney General
JUDGE ZOLLIE STEAKLEY
Special Assistant Attorney General
RICK GILPIN
Chairman, opinion Committee
Prepared by Karen C. Gladney
Assistant Attorney General
p. 4355