Untitled Texas Attorney General Opinion ( 1959 )

January 7, 1959
Opinion No. WW-543
Mr. William A. Harrison Re: May credit life, heal~tiand
Coi-nmissioner of Insurance accident insur,ance policies
State Board of Insurance issued under Article 3.53 of
International Life Building the Insurance Code exempt
Austin, Texas from coverage ang de&&or
disability resulting .from any
cause originating priortwthe
Dear Mr. Harrison: date of the policy?
You have asked our opinion “as to whether credit life, health
and accident insurance policies issued in accordanca with the terms of
Article 3.53, Texas Insurance Code, may exempt from coverage any
death or disability resulting from any cause which originated prior to
the date of the policy.”
Article 3.53, Section 7B, provides: “Credit life insurance
policies shall insure against the contingency of death from any cause
whatsoever. . .* No exceptions being permitted, it is clear that a
credit life insurance policy may not contain the exemption set out
above.
Article 3.53, Section 7C, provides that “credit health and ac-
cident policies shall insure against the contingency of disability frbm
sickness or accident of every kind and character whatsoever, originating
and occurring within the term of the policy.”
You have indicated that the departmental construction given
this particular article by your office is to the effect that the language
in Section 7C “originating and occurring within the term of the policy,”
refers to the disability suffered by the policyholder rather than to any
sickness or accident which might pre-exist the term of the policy: Where
the, language of a st’atute is susceptible of more than one construction oar%
of doubtful meaning “longstanding departmental construction may be resort-
ed to in determining their Iproper interpretation.” Dallas Title & Guaranty
Company v. Board of Insurance Commissioners, 22m.2d 332 (Tex. Civ~.
App., error ref.) With your construction we are in agreement and hold
that the provision in question precludes the issuance of policies exempting
disabilities resulting from causes originating prior to the date of the
policy.
In interpreting a statute it is necessary to examine it as a whole.
“In determining the legislative intent,~ the Court should not Look alone to
--_.
Mr. William A. Harrison, page 2 (WW-543)
any one phrase, clause or sentence of the Act, bpt to the entire Act. . .*
Popham v. Patterson (Tex. Sup. Ct. ) 121 Tex. 6r5, 51 S.W.2d 689.
The fundamental purpose of insurance,‘of the type authorized
by Article 3.53 is obviously to insure the ultimate payment of the loan
in the event something happens to the earning capacity of the borrower
during the term of the loan. It is the occurrence of a disability durin
the loan that is insured against. As stated in Article 3.53, Section 1Bf I):
“Credit Health Insurance and Credit Health and Accident Insurance as
used in this article . . .are expressly limited in their coverage to the
contingencies of death or loss resulting from sickness and accident.”
When must the contingency of loss resulting from sickness and
accident occur? By the plain wording of the article, it must originate
and occur within the term of the policy. To interpret this statute to mean
that the accident or sickness which results ultimately in a loss of earning
capacity must occur during the term of the policy is to impute to the
Legislature an intenffon to defeat the basic purpose of thl: Act. It would
have to be held that if an accident or illness .occurred prior to a loan,
which resulted In a disability during the term thereof, the loan would not
be protected. This flies in the face of the fact that the very contingency
has taken place from which the parties had contr.aM to protect them-
selves.
SUMMARY
Credit, life, health and accident lnsur-
ante policies issued under Article 3.53
of the Insurance Code may not exempt
from coverage any death or disability
resulting from any cause origfnating
prior to the date of the policy.
Respectfully submitted,
WILL WILSON
Cecil Cammack, Jr.
RVL$g ~Assistant Attorney General
Mr. William A. Harrison, page 3 (WW-543)
J?PPROVED:
OPINION COMMITTEE:
Geo. P. Blackburn, Chairman
Tom I. McFarling
Gordon C. Cass
J. Milton Richardson
David R. Thomas
REVIEWEDFOR THEATTORNEY GENERAL
BY:
W. V. Geppert