Untitled Texas Attorney General Opinion ( 1958 )

Mr. William A. Harrison Opinion No. ww-362 Commissioner of Insurance International Life Building Re: "Whether it is necessary to Austin, Texas increase capital stock deposit under Article 3.15, Texas In- surance Code, when the actual capital stock of a company is increased by charter amend- Dear Mr. Harrison: ment, and related questions." We quote from your letter of December 16, 1957, requesting the opinion of this department on the above stated question as follows: "Assume that a company with $100,000 capital exer- cises its option under Article 3.15, and voluntarily de- posits with the treasurer securities in the amount of $100,000, and subsequently the company amends its arti- cles~of incorporation to increase its capital stock to $250,000. We respectfully request your opinion as to whether it is necessary for the company, having once exercised its option and made the capital deposits called for in Article 3.15, to make additional deposits with the State Treasurer under Article 3.15 in an amount to the increase of its capital. "Assume that a company has a capital of $250,000 and voluntarily makes a $250,000 capital deposit with the State Treasury in accordance with Article 3.15. Subse- quently, the company reduces its capital to $100,000. We respectfully request your opinion as to whether the com- pany could then withdraw from the State Treasury $150,000 of its capital deposit, without submitting in lieu there- of other securities of a like class, or of an equal amount. In other words, could the company then maintain only a capital deposit of $100,000 rather than $250,000? "In each of our first questions, assume that at the time of increase or reduction in capital, the company had outstanding liabilities to its policyholders in this state. "If your answer to our first question is in the nega- tive, we respectfully request your opinion as to whether a company which had originally made a voluntary deposit and fir.Wil~;iamA. Harrison, page 2 (``-362) subsequently increased its deposits at the xquest of thf State %ard of Insurance, after it had increased its capi-