T~ER-~-~oRNEY GENERAL OF TEXAS Aun.rx~ 1% we PRICE DANIEL ATTORNEY GENERAL February 10, 1919 Hon. J. P. Gibbs, Commissioner Casualty Insurance Division Board af Insuraae Cemmlssiaers A-tin 14, Texas Attention: Mr. Ned Price, Director Title Section Opinion No. Q-495 Re: Whether agreement by repre- sentative of a title insurer to pay a portion of the in- surer’s losses constitutes a refnsurance agreement; and whether such an agreement vio- lates Section 11 of Article 1302a, Q. C. S. Dear Sir: Your letter of December 30 states that the Kan- sas City Title Company, a tftle insurance- cornpax qualified and operating under the provisions of Article 13 2a, T.C. S has entered into an agreement with the Hexter Abstract aii Title Company, an abstract company not qualified to operate as a title company under Article 1302a ) Q.C.S., as Its representative for the fssuance of title insurance. The agreement provides in part as follows: “It being mutually agreed and understood as a part of the consideration for this con- tract that Agent hereby agrees to pay all loss- es and cla?ms under any policy written by Agent up to the sum of $l,OOOOOO; and to Indemnify Company from any and all loss of any nature or kind on any policy, commitment to insure or binder issued by Agent on all losses or claims up to $1,000.00; and further agrees to pay one- half of any and all loss incurred under any policy ,issued~by Agent over $l,OOO.OO up to and including $lO,OOO.OO; and to indemnify Company from any and all loss of any nature or kind on any policy, commitment to insure or binder is- sued by Agent to the extent of one-half of any sum in excess of $l,OOO.OO up to and including $10,000.00.” Hon. J. P. Gibbs, Page Z., Q-495 You request an opinion on the following ques- tions: “1. Does the above quoted provision constitute a reissurence agreement between Kansas City Title Company and Hexter Ab- stract and Title Coapaay? “2. If your answer to question No. 1 is to the effect that the e@reement between the Kansas City Tit1.e Company and the Hexter Abstract and Title Company is one of rein- surance, then please advise whether or not the agreement is in violation of that part of Section I1 of Article 1302(a) s which pro- vldes, ‘such Mm any operating under the provisions of th !is Act may reinsure any or all of its business provided the reinsuring company shall be qualified to do business in Texas and the reinsuring contract shall be first approved by the Board of Insurance Commissioners !” As to your fPWs$ question, the agreement clear- ly ronstltutes a reinsurance agreement. Reins uranc e is defkned in Couch, Cyclopedia of Insurance Law, Section 2256, and in 24 Tax, Jur. o page 1293, as a contract where- by one for a consideration agrees to indemnify another, either in whole or in part, against loss or liability the risk of whiob’ the latter has assumed under a separate and distinct contract as insurer of a third party, As to your second question, Section 11 of Arti- cle 1302a, which you quote, having provided for the cfr- cumstances under which companies operating thereunder might reinsure their risks, there is an implied prohfbi- tion to such companies ‘reinsuring in any other manner. It is our opinion, therefore, that the agreement is in violation of the quoted portion of Section 11 of Article 1302a e SUMMARY An agreement by an abstract company not qualified to operate as a title company under Article 1302a; Q.~C. S., to Indemnify a title company which ft represents against any portion of the losses sustained by such title company on policies issued by the ab- stract company constitutes a reinsuranct a- greement D Hon. J. P. Gibbs, Page 3, Y-495 Saoh an agTeeement would tielate Se01 tions 3 and 11 of Artlole 130Em, t. C. 9. Very truly yours ATTOEZNEY GENERALOF TEXAS Ned McDaniel Assistant APPROWD: ATTORI'ZY GENERAL NMc:jmc:jrb