Untitled Texas Attorney General Opinion ( 1950 )

AUSTIN. TEXAS January 25, 1950 Ron. George B. Butler, Chairman Board of Insurance Commissioners Austin, Texas Opinion Bo. V-989 Re: The authority of a life insurance company,which owns home office prop- ertiea in another state, to own real estate for Dear Sir: a branch office in Texas. Your request for an opinion presents the ques- tion of whether a life insurance company organised under the laws of another state in which it has its home of- fice and in which it owns home office properties,but licensed to transact business in Texas, may own an of- fice building in Texas for use in connectionwith the transactionof its business in this State. In your opinion request you advised of the following: "The Washington Rational Insurance Com- pany is an Illinois life, health and accident company with its home offices in Chicago and its executive offices in Evanston, Illinois. It is presently licensed to do business in Texas and has been so licensed for a number of years. It owns home office propertiesin Evanston in which its principal records are located and from which its principal business is transacted. "It has recently purchased a vacant lot in Houston, Texas, on which it has erected a one-story brick building which is used ex- clusivelyas a branch office for the trans- action of such of its business as is neces- sary for that area. ... "Please advise me whether Washington Na- tional Insurance Company is authorizedto own Hon. George B. Butler; Page 2 (V-989) and hold real estate under discuaaion for the purposes abeve outlined." In studying this question we have carefully consideredthe view of the Board,of,InauranceCommia- aioners as presented in your opinion request, briefs submittedby interested parties, AndyAttorney General's Opinions Nos. O-5823, O-1470, O-4556, O-4587; 0-4587-A, o-5250, and 0-5250-A. by,previousadministrations. Article 4726, V.C.S., provides in part: "Every such insurance company may secure, hold and convey real property only for the following purposes and in the fol- lowing manner: w(1) One building site and office building for its accommodationsin the transactionof its business and for lease, and rental; a .,. Provided, that an aci quisition of such an office building on leased ground shall be approved by the Board of Insurance Commissionersof the State of Texas before such investment." Does this article impliedly prohibit a foreign insurance company which owns office properties in an- other state from owning an office building in Texas? We think not. Any implicationto that effect found in Ar- ticle 4726 is overcome by Articles 4765 and 4766, V.C.S, Article 4765, V,C.S., reads as follows: "Each life insurance company now en- gaged, or that may hereafter engage in trans- acting the business of life insurance in this State, shall, as a condition of its right to transact such business in this State, invest and keep invested in Texas securities and in Texas real estate as hereinafterpro- videa, a sum of money equal to at least seventy-fiveper cent of the aggregate a- mount of the legal reserve required by the laws of the State of its domicile, e0en (Emphasisours). Article 4766, as amended, Acts 5lst Leg., B.S. 1949, Chapter 438, p. 813, provides, in part, as follows: Hon. George B. Butler, Page 3 (V-989) The investmentsrequired by this Chapt~;*~aybe made by the purchase of not more than one building site, and in the erec- tion thereon of not more than one office building, or in the purchase,at its reaaon- able market value, of such office building already constructedand the ground upon which the same is located in any city of the State of more than four thousand (4000) inhabitants...." We are of the opinion that Article 4766, when read with Article 4765, expressly authoriaes a foreign insurance company to own one office building in this State, even though it may own home office properties in another state. We do not believe that it was the inten- tion of the Legislature in enacting Article 4766 to give permlasion to own one office building to a foreign in- surance company only when it did not own a home office bui,lding,since many if not moat fore1 insurance com- panies would be expected to own home orfice buildings in the state where their home offices are located. In further support of our opinion, we invite your attention to Article 4762, V.C.S., which provides: "The assets of any company not organ- ized under the laws of this State shall be invested in securitiesor property of the same classes permitted by the laws of this State as to home companies or by other laws of this State in other securitiesapproved by the Commissioneras being substantially the same grade." The above quoted Article was referred to in Attorney Generalvs Opinion O-5823 in which it was said: "It is our opinion, therefore, that any foreign insurance company authorined to trana- act in this state any or all kinds of inaur- ante above named under the proviaionaof Chap- ter 3, Title 78, (Articles4716-476&b)is au- thorised to own real estate in this State as authorisedby Article 4726, Et-t- must also be alienated as provided thereby." (Em- phasis ours). Hen, George B, Butler, Page 4 (V-989) The opinion quoted above points out that foreign insurance companies authorizedto transact business in Texaa,have the same privileges in Texas as domestic insurance companies. Accordingly,we think any foreign insurance company may own in Texas one office building as permitted to domestic com- panies under Article 4726. We are also of the opin- ion, as indicated above, that Article 4766 expressly authorizes out-of-stateinsurance companies to own one office building in Texas, SUMMARY A foreign insurance company licensed to do business in Texas may own one office building for use in connectionwith its busi- ness transactionsin this area, even though such insurance company owns home office properties in another state. APPROVED: Yours very truly, Ned McDaniel PRICE DANIEL State Affairs Division Attorney General Charles D. Mathews Executive Assistant By5fe Assistant