Mid-Century Insurance Co. of Texas v. Ademaj

delivered the opinion of the Court,

This case concerns the convergence of three provisions enacted by the Texas Legislature during the 1991 legislative session: (1) article 4413(37), section 2 of the Revised Civil Statutes, creating the Texas Automobile Theft Prevention Authority (the Authority) as a division of the Texas Department of Transportation; (2) article 21.35B(a) of the Insurance Code, detailing the types of payments insurers generally may solicit or collect;1 and (3) article 5.101 of the Insurance Code, outlining a flexible rating program and rate-filing process to be used by all automobile insurers in Texas.2

*620Shefqet Ademaj and others (Ademaj, collectively) brought a class action suit against Mid-Century Insurance Company of Texas and Texas Farmers Insurance Company (Mid-Century, collectively), and sought a declaratory judgment on the manner in which Mid-Century could lawfully recoup the legislatively imposed Authority fee from insureds. The trial court ruled in Ademaj’s favor, and the court of appeals affirmed. We reverse the court of appeals’ judgment and render a take-nothing judgment in favor of Mid-Century.

I

Article 4413(37) funds the Authority’s automobile theft prevention programs by requiring each automobile insurer to pay a fee of $1 per policy year for every automobile insured. Tex.Rev.Cxv. Stat. art. 4413(37), § 10(b). The commissioner of the Texas Department of Insurance authorized automobile carriers to recoup the fee from insureds so long as the carriers provided insureds notice that, as part of the policy, they were being charged the fee “in addition to the premium due under this policy.” 28 Tex. Admin. Code § 5.205(b)(1), (b)(2) (1992). Article 21.35B applies to all insurers and outlines payments insurers may solicit or collect from policyholders. The statute provides, in pertinent part:

(a) No payment may be solicited or collected by an insurer, its agent, or sponsoring organization in connection with an application for insurance or the issuance of a policy other than:

(1) premiums;

(2) taxes;

(3) finance charges;

(4) policy fees;

(5) agent fees;

(6) service fees, including charges for costs described under Article 21.35A of this code;

(7) inspection fees; or

(8) membership dues in a sponsoring organization.

Art. 21.35B(a). Article 5.101 of the Texas Insurance Code, entitled “Flexible Rating Program for Certain Insurance Lines,” applies to automobile insurers and authorizes the commissioner to set a benchmark rate for each line of personal automobile insurance sold in Texas. Article 5.101, §§ 1(a), 3(b). Under Article 5.101, once the commissioner establishes “flexibility band[s]” — acceptable rate ranges for each line of insurance — insurers must file detailed information on proposed rates which, if within the flexibility bands, are presumed valid. Id. § 3(e)-(f).

Ademaj alleged in a motion for summary judgment that Mid-Century illegally collected the Authority fee because the fee was not included in Mid-Century’s Article 5.101 rate-filing. Mid-Century countered with their own motion for summary judgment, alleging that Article 21.35B(a) authorized them to charge the Authority fee *621as an expense, and that they were therefore not required to include the fee in their Article 5.101 rate-filing. Mid-Century and Ademaj ultimately filed a joint motion to sever Ademaj’s claims from the remaining plaintiffs’ claims or, alternatively, for a written order for interlocutory appeal of the summary declaratory judgment. The parties stipulated the following:

1. Ademaj paid a total of $1 in Authority fees to Mid-Century Insurance Company.

2. Ademaj paid a total of $3 in Authority fees to Texas Farmers Insurance Company.

3. All payments Ademaj made for private passenger automobile insurance coverage, other than the Authority fees, were legally authorized.

4. Neither Mid-Century nor Texas Farmers charged Ademaj the Authority fee as part of the premium for private passenger automobile insurance coverage.

5. Neither Mid-Century nor Texas Farmers has included the Authority fee in their rates or in their rate-filings made with the commissioner under Article 5.101.

The trial court issued a partial summary judgment in favor of Ademaj. The court of appeals affirmed the trial court’s ruling, holding insurers are required to include the Authority fee in their Article 5.101 rate-filings with the commissioner. Mid-Century Ins. Co. v. Shefqet, 202 S.W.3d 176, 184-85 (Tex.App.-Tyler 2004). Mid-Century timely filed this appeal.

II

We review a trial court’s grant of summary judgment de novo. Provident Life & Accident Ins. Co. v. Knott, 128 S.W.3d 211, 215 (Tex.2003). When, as here, both parties moved for summary judgment and the trial court granted one and denied the other, we “determine all questions presented and render the judgment the trial court should have rendered.” Argonaut Ins. Co. v. Baker, 87 S.W.3d 526, 529 (Tex.2002). Our objective in construing a statute is to give effect to the Legislature’s intent. Tex. Gov’t Code § 312.005; Am. Home Prods. Corp. v. Clark, 38 S.W.3d 92, 95 (Tex.2000). Our interpretation of these statutes begins with their plain meaning, Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 865 (Tex.1999), which we derive “from the entire act and not just from isolated portions.” State v. Gonzalez, 82 S.W.3d 322, 327 (Tex.2002). Thus, we “read the statute as a whole and interpret it to give effect to every part.” Id. (quoting Jones v. Fowler, 969 S.W.2d 429, 432 (Tex.1998)).

The parties agree that the Insurance Code authorizes insurers to recoup the Authority fee amount from insureds, and disagree only over which specific articles and conditions govern the payments. The principal issue is whether, as Ademaj argues, insurance carriers must include the Authority fee within the rates filed under Article 5.101, or whether, as Mid-Century argues, carriers may recoup the fee independently under Article 21.35B. We must determine whether the rate arising from the Article 5.101 rate-filing process is: (1) merely the premium to which an insurer may add the charges enumerated in Article 21.35B; or (2) the sum of all permissible charges, including any Article 21.35B charges the insurer requires the policyholder to pay. The court of appeals construed Article 5.101 to require the latter. 202 S.W.3d at 184. We disagree.

First, we construe Article 21.35B as an affirmative source of an insurer’s authority to solicit and collect payments. Article 21.35B(a) provides that “[n]o payment may be solicited or collected ... *622other than” the eight enumerated categories of payments, creating a prohibition with respect to nonenumerated payments and an authorization with respect to the enumerated elements. Article 21.35B(a) (emphasis added). Construing Article 21.35B(a) as a mere outline of the Article 5.101 rate-making considerations renders it meaningless to automobile insurers and ignores the statute’s application to other types of insurers.3 Instead, Article 21.35B authorizes the solicitation and collection of premiums, taxes, and the other enumerated payments unless some intervening statute provides otherwise.4

Second, we construe the Article 5.101 “rates” to constitute “premiums” as contemplated by Article 21.35B(a). Despite extensive briefing on the issue, we are not convinced that technical etymologies of Article 21.35B’s “premium” and Article 5.101’s “rate” control our construction.5 Because Article 21.35B addresses all insurers, it cannot speak in the exact terms of the various statutes addressing subclasses of insurers, including Article 5.101. Instead, we utilize the plain meanings that produce the most coherent overall scheme. “The foundation of insurance is ... risk distribution, and premiums are a function of calculated risk.” In re Tex. Ass’n of Sch. Bds., 169 S.W.3d 653, 658-59 (Tex.2005) (“The payment of the premium by the insured and the assumption of a specified risk by the insurer are the essential elements of the contract of insurance.”); accord Rosenstock v. Wheeler, 310 S.W.2d 350, 353 (Tex.Civ.App.-Houston 1958, writ ref'd) (“A premium is the consideration paid by a person for insurance protection or coverage.”). In addition to “premiums,” Article 21.35B recognizes that insureds incur, as part of insurance policies, various other payment obligations not closely related to risk and cost distributions. Article 21.35B(a). Albeit with different terms, Article 5.101 focuses on the fundamental considerations of risk distribution. Article 5.101 produces “rates” for each “line of insurance” by balancing *623“risks” against various economic variables, such as “loss experience,” “peculiar hazards,” “profits,” and “expenses of operation,” among others. Art. 5.101, § 3(a), (c). Thus, the Article 5.101 rate process produces the premiums that Article 21.35B authorizes insurers to solicit and collect.

Ademaj argues that Article 5.101 requires the commissioner’s inclusion of all costs and expenses of operation, including all taxes, in the Article 5.101 rate. See id. § 3(b)(4), 3(q). Ademaj further asserts that the only expenses that could be excluded from the rate were those listed in section 3(o). Because taxes and fees generally, and the Authority fee specifically, are not listed in section 3(o), Ademaj argues that Article 5.101 governs the Authority fee exclusively. We disagree.

Although Article 5.101’s rate-setting scheme may account for the Authority fee, it need not always do so to the exclusion of the Article 21.35B payment authorization. Article 5.101 simply does not employ mandatory language: “[T]he commissioner may give due consideration to” the expenses enumerated in section 3(c); nothing in Article 5.101 requires the commissioner to use the Authority fee when calculating the benchmark rate. Id. § 3(c) (emphasis added). As a result, even if the commissioner could have used the Authority fee in the benchmark rate calculation under section 3(c)(4) as an “expense” or under section 3(c)(13) as an “appropriate” factor, Article 5.101’s permissive terms did not compel him to do so.6

Having determined that payments may fall under either Article 5.101 or Article 21.35B, we need not determine where the Authority fee most appropriately falls because the commissioner has already done so. “Construction of a statute by the administrative agency charged with its enforcement is entitled to serious consideration, so long as the construction is reasonable and does not contradict the plain language of the statute.” Tarrant App. Dist. v. Moore, 845 S.W.2d 820, 822 (Tex.1993).7 The Insurance Code charges the commissioner with enforcing the Article 5.101 rate system in several ways. Under Article 5.101, the commissioner must “adopt a rating manual,” and the manual must “be used by all insurers” unless they receive permission from the commissioner to use their own. Article 5.101, § 3(k). Article 5.101 also directs the commissioner to “promulgate by rule a benchmark rate” *624for each line of insurance. Id. § 3(b). Finally, section 3(c) gives the commissioner the power to decide what “consideration” each potential rate factor is “due.” Id. § 3(c). Even if the commissioner has no explicit power to enforce Article 21.35B, the various Article 5.101 enforcement responsibilities empower him to make the threshold determination of whether or not a payment should be governed by Article 5.101 at all.

To that end, the commissioner promulgated Rule 15, which does not require insurers to include the Authority fee in their Article 5.101 flex filings. Instead, Rule 15 directs insurers to collect the Authority fee from policyholders and simply notify them that the fee was being collected “in addition to the premium due” under the policy. 28 Tex. Admin. Code § 5.205(b). The commissioner’s interpretation deserves deference because it accords with the terms of the statute. First, the commissioner could reasonably have determined that the Authority fee falls within Article 21.35B(2)’s authorization for the solicitation and collection of “taxes” because the Legislature imposed the fee to finance the Authority. See Tex.Rev.Civ. Stat. art. 4413(37), § 10 (“The fee imposed by this section is in addition to any other fee or tax imposed by law on an insurer.”); Conlen Grain & Mercantile, Inc. v. Tex. Grain Sorghum Producers Bd., 519 S.W.2d 620, 623 (Tex.1975) (“A tax is a burden or charge imposed by the legislative power of the state upon persons or property to raise money for public purposes.”). Moreover, we see no place for the commissioner to include the Authority fee in the benchmark rate because it is imposed as a flat fee. Whereas taxes and fees charged as a percentage of premium spread nicely throughout the entire menu of lines of available insurance, a flat fee such as the Authority fee cannot be so easily distributed. Because insurers’ variable flex filings range from 30% below to 30% above the benchmark, including the Authority fee in the Article 5.101 calculation will distort the $1 recoupment in a substantial set of cases. Thus, we defer to the commissioner’s conclusion that insurers wishing to recoup the Authority fee need not include it in their Article 5.101 filings.8

Ademaj asserts three final objections to this construction, none of which we find persuasive. Ademaj points to American Alliance Insurance Co. v. Board of Insurance Commissioners, 126 S.W.2d 741, 744 (Tex.1939), and Article 5.101’s requirement that rates be “just, reasonable, [and] adequate” for the proposition that the Article 5.101 rates must include all taxes. See Article 5.101, § 3(b)(2); Public Util. Comm’n v. Houston Lighting & Power Co., 748 S.W.2d 439, 439-40 (Tex.1987). Even if those cases apply to the statute here,9 they do not require what Ademaj *625asserts. At most, they require only that taxes be “considered,” Houston Lighting & Power, 748 S.W.2d at 441, and “taken into account,” Am. Alliance, 126 S.W.2d at 742. They do not require that a fee necessarily be included in the final charge calculation. The commissioner met this standard by considering “expenses of operation” and other “appropriate” factors during the rate setting process, and by promulgating Rule 15, which represents the commissioner’s explicit consideration of the tax as it affects insurance rates. See Article 5.101, § 3(c)(4), (12); 28 Tex. Admin. Code § 5.205(a). As a result, the commissioner met the statutory requirement of producing section 3(b)(2)’s “just, reasonable, [and] adequate” rates, even without including the Authority fee.

Ademaj also asserts the filed rate doctrine to argue that interpreting Article 5.101 as applying only to premium charges will allow insurers to wrongfully impose charges on policyholders that were never filed with the commissioner. Such an interpretation, Ademaj asserts, would violate the filed rate doctrine because the filed rate of rate-regulated automobile insurers would not reflect the actual charge for automobile insurance. Ademaj cites AT & T v. Central Office Telephone, Inc. presumably for the proposition that the rate an insurer duly files is the only lawful charge it may pass on to policyholders. See 524 U.S. 214, 222, 118 S.Ct. 1956, 141 L.Ed.2d 222 (1998). But, while Ademaj is correct that the filed rate doctrine applies in Texas, see Southwestern Elec. Power Co. v. Grant, 73 S.W.3d 211, 216-17 (Tex.2002), he miscites the United States Supreme Court’s holding in AT & T and is wrong about how the filed rate doctrine applies in Texas. AT & T described the filed rate doctrine only as it applied within the confines of the Interstate Commerce Act. See 524 U.S. at 222, 118 S.Ct. 1956 (“Under the Interstate Commerce Act, the rate of the carrier duly filed is the only lawful charge.”). We held in Southwestern Electric Power Co. that “[t]he doctrine holds that a tariff filed with and approved by an administrative agency under a statutory scheme is presumed reasonable unless a litigant proves otherwise.” 73 S.W.3d at 216. Nowhere in that decision did we hold that the doctrine prohibits an insurer from recouping a fee from insureds outside the rate when the appropriate regulatory agency has promulgated a valid rule permitting the insurer to do so. The application of the filed rate doctrine in this case is necessarily circumscribed by the legislative grant of authority to the commissioner to regulate premiums and cannot be applied to overrule the commissioner’s exercise of discretion not to include the Authority fee in the premium regulated under Article 5.101.

Finally, Ademaj warns that reversing the court of appeals’ decision will result in double charging of the Authority fee by insurers and deregulation of the automobile insurance industry. These fears are unfounded. This case stems from the commissioner’s regulation of rates rather than any trend toward deregulation. The commissioner authorized insurers to recoup only the $1 Authority fee from policyholders. Any insurer choosing to charge the fee to policyholders both within and outside of the Article 5.101 rate would be charging double that which the commissioner permits and, as is the case for any type of impermissible double charging, *626would be subject to administrative penalties. See Tex. Ins.Code § 84.021.10

Service Life & Casualty Insurance Co. v. Montemayor demonstrates the commissioner’s willingness to confront these feared acts of double charging. See 150 S.W.3d 649 (Tex.App.-Austin 2004, pet. denied). In Montemayor, the insurer attempted to gain the commissioner’s approval to charge a $50 policy fee in addition to its premium rate. Id. at 650. The commissioner refused to approve the fee, and an administrative law judge found the insurer had no legal authority to charge it. Id. The commissioner then signed an order agreeing with the administrative law judge, and the district court affirmed the commissioner’s order. Id. The insurer appealed, arguing it had authority under Article 21.35B to charge premiums and policy fees as separate items under the “Act for the Regulation of Credit Life Insurance and Credit Accident and Health Insurance.” Id. at 651.11 The court of appeals, concluding the insurer implemented the fee solely to increase its revenue and profits, agreed with the commissioner and rejected the insurer’s attempt to recoup the fee. Id. at 653. Thus, the result in Montemayor signals that the commissioner is well positioned to protect insureds from abusive and unregulated charges under his construct of Article 5.101.12

Ill

Article 21.35B authorizes all insurers to solicit and collect both premiums and taxes. The Article 5.101 rate-making process produces auto insurance premiums, and in the process gives the commissioner the discretion to determine whether payments should be considered as part of the Article 5.101 rate (and, thus, Article 21.35B premium) or instead should be considered as another Article 21.35B payment. Because the commissioner made a reasonable determination that the Authority fee should be charged directly and not as part of the Article 5.101 premium, we hold that Mid-Century properly recouped the fee from Ademaj. Accordingly, we reverse the court of appeals’ judgment and render a take-nothing judgment in favor of Mid-Century Insurance Company of Texas and Texas Farmers Insurance Company.