Untitled Texas Attorney General Opinion ( 1946 )

THE ATTORNEY GENERAL OF TEXAS ,Honorable George B. Butler, Chairman Board of Insurance Commissioners Austin, Texas Dear Mr. Butler: Opinion No. o-7245 Re: Whether the provisionzi~of. Article 4685, or any other appllc~ablestatute;requires that the authorized capital .stock of the types of out-~ of-state Insurers named here- in, must be subscribed and fully paid in before such companies may be admitted to do business in Texas. This Department is in receipt of your request,for an opinion on the above-captioned subject, which request is as follows: "This Department has pending the applications of admittance lnto,Texas of an out-of-state life, health and accident insurance company, an out-of- state fire insurance company and an out-of-state casualty insurance company, all of which have actual subscribed and paid up capital stock in amounts sufficient to admit,them here but their charters,also authorize capital stock in amounts in excess of the figure which LS actually subscribed and paid up. "Please advise me whether Article 4686, or any other applicable statute, requires that the authorized capital stock of the above types of out-of-state Fn- surers must be subscribed and fully paid in before such companies may be admitted to do business in Texas. '%or your ready reference the following opinions from your Devartment touch uvon this matter: August 27, 1513, June 26, 1922 September 15, 1932, August 20, 1924 and July 26, 1925./' The opinions referrer3to by you are: (1) Opinion of B. F. Looney, Attorney General, written by C. M. Cureton, First Assistant Attorney General, to Hon. W. W. Collier, -- a Hon. George B. Butler, page 2 o-7245 Commissioner of Insurance, dated August 27, 1913; (2) Opinion of X. A. Keeling, Attorney General, written by Frank M. Kemp, Assistant Attorney General, to Hon. Ed Hall, Commlssloner of Banking and Insurance, dated June 26, 1922; (3) Opinion of W. A. Keeling, Attorney General, written by Eugene A. Wilson, Assistant Attorney General, to Honorable John M. Scott, Insur- ance Commissioner, dated August 20, 1924; (4) Opinion of Dan Moody,'Attorney General, written by Wright Morrow, First ,Asslstant Attorney General, to Hon. John EL.Scott, Commissioner of Insurance, dated July 26, 1925; and (5) Opinion of James V:~Allred, Attorney General, written by Sidney Benbow, Assis- tant Attorney General, to Hon. W. A. Tarver, Chalrman, Board of Insurance Commissioners, dated S,eptember15, 1932; all of which opinions have been given careful consideration. Article c4686; Revised Civil Statutes of Texas, 1925, as amended bg,Acts of 1933; 43rd Legislature, page 420, chapter 164, paragraph 1, and Acts 1943, 48th Legislature, page 607, chapter 352, paragraph 1, is as follows: "1 . No inaiiriaual,group of individuals, associa~- tlon or corporation, unless now or hereafter othervlse per- mitted by Statute, shall be permitted to engage in the, business of insuring others against those losses which may be insured against under the laws of this State. 'Should the Board of Insurance Commissioners be satisfied that any insurance carrier avvlrlnn for a certificate of authority has In all respects fully complied with the law; and that If-a stock comvans. its cavital stock has been fully vaid uv that it has the requlred amount of capital and surplus to poilcg- holders; it &hall be its duty to issue to such carrier a cer- tificate of authority underits seal authorizing such carrier to transact insurance business, naming therein the particular kinds of Insurance, for the period of not more than fifteen (15) months, and not extending more than ninety (90) days be- yond the last day of February next following the date of saia certificate. Any such carrier who may now be doing business within the State of Texas shall on and after the first day of January, 1944,,be required to comply with all of the provisions as set out by this Act. "2. The word 'carrier' as herein used in defined as that type of Insurer which, in consideration of premium, issues policies to others insuring against those losses which may be insured against under the provisions of the law, in- eluding stock companies, mutual companies, reciprocals or inter-Fnsurance exchanges, and Lloyd' Associations. Pro- vided that the Board of Insurance Commissioners shall give preference to applications of domestic companies In checking and approving annual,statements and Issuing certificates of authority.", .(Emphasisadded) Hon. George B. Butler, page 3 O-7245 The amendatory Act of 1945 amended the first sen- tence of the foregoing Act which was added by the amendatory Act of 1933, by adding the words "association or corporation." The amendatory Act of 1933 also added the third sentence in paragraph 1 and the first sentence of paragraph 2. These are the only material changes from the original Act of 1909, page 205, 3ec. 40, codified in the 1911 revision as Article 4497. 4 It is the opinion of this Department that the opinion of the Attorney General of Texas, dated June 26, 1922, written by Frank M; Kemp as Assistant Attorney~General under the Hon. W. A. Keeling, Attorney General, a copy of which Is attached, is a clear, comprehensive, and correct construction of Art. 4686, Revised Civil Statutes, 1925, when it was codified as Art. 4497 and as it now reads as amended as a part of the 1925 Revised Statutes, and such opinion is adopted as the opinlon of this Department. Any parts of the other opinions above referred to which are in conflict therewith are accordingly overruled. It being the manifest intention of the Legislature that Art. 4686 should apply to all foreign stock Insurance companies applying for certicicates of authority to do business in Texas as life, health, and accident Insurance companies, fire insurance companies, and/or casualty insur- ance companies , your department should require an afflrma-~ tive showing In each of such applications that all of the authorized capital stock of the above types of foreign com- panies must be subscribed and fully paid before such com- panies can be admitted to do business in Texas. Very truly yours ATTORNEYGE``ERAL OF TEXAS By s/C. K. Richards C. K. Richards, Assistant CKR:rt:wc APPROVED JUNE 13, 1946 s/Carlos C. Ashley FIRST ASSISTANT ATTORNEY GENERAL Approved Opinion Committee by s/BWB Chairman