Untitled Texas Attorney General Opinion ( 1959 )

The Honorable Zollie Steakley Opinion No. WW -768 Secretary of State Capitol Station Re: The authority of the Austin 11~.Texas Secretary of Stats to accept and file DrOoosed articles of incoraoration having the ~urpo8e to act as attorney-in- fact for a recinrocal or inter- insurance exrfiange organized and operating under the oro- visions of Chapter 19, Texas Dear Mr. Steakley: Insurance Code. You have asked our opinion on the authority of your office to accept and file articles of incorporation which include the following Duroose clause: “The Purpose for which the corporation is organ- ized is to act as the attorney-in-fact for a reciprocal or inter-insurapce exchange organiaed and ooerating under the provisions of Chapter 19. Texas Insurance Code.” Prior to the passage of the Texas Business Corporation Act. a corpor8tion could be organized in Texas only if its pronosed puqmee was specifically authorfeed by the laws of this state, In one of the most fundamental changes made in our corporate law by the Buainess CORD- oration Act, corDorations may now be organized for any lawful ouruose or purnoses (Art. 2.01A). However, as originally enacted t&e:‘~c,W&ak*e- &‘% ~:.z Business ;orporation Act specifically prohibited the incorporzMx under of Attorneys-in-Fact for reciproca;l exchanges (Art. Z.OlB(4)(d). It has been held that prior to the oassage of Article 1513a. Vernon’s Civil Statutes the DUrDOSe “to act as attorney-in-fact for a reciprocal or inter-insurance exchange” was not a lawful purpose for which corporationa could be formed in Texas (WW-395). Article 1513a is a ape&al act authori8+ ing the creation of corporations the purpose of which may be, among other things. to act as attorneys-in-fact for rsciorocal exchanges. They must meet certain specified requirements among which is a fully oaid in capital of $500.000. Being a special act dealing with a uarticular kind of corporation, Article 1513a was not reuealed by the passage of the Texas Business Honorable Zollie Steakley, oage 2 (WW-768) Cornoration Act (9.15B). At one time, then, the only i``anner in which a domestic corn- oration Drowsing to act as attorneys-in-fact for a reciarocal or inter- insurance exchange could be created in Texas was by meeting the requirements of Article 1513a. Such situation was altered by the last Legislature by the DaSSage of S.B. 90, which amended Article 19.02 of the Texas Insurance Code. Section 1 thereof reads as follows: “A corporation may be organized in Texas to act as attorney-in-fact for a reciorocal or inter-insurance exchange. The general laws for incorporation shall sun- olement the orovisions of this Act to the extent that they are not inconsistent with the provisions hereof.” The “general laws for incorooration” referred to are obviously those in effect at the time of the oassage of the Act and mean in this case the Texas Business Cornoration Act. Section 3 of S.B. 90 nrovides: “Chanter 388 of the Acts of the 55th Legislature, 1957, (Article 1513a) shall not anply to a cornoration. either domestic or foreign, which acts only as attorney- in-fact for a reciprocal or inter-insurance exchange.” By virtue of this provision cornoration attorneys-in-fact for reciorocais need no longer meet the rather stringent canitalization~ requirements of Article 1513a. The “repealer” clause of S. B. 90 is found in Section 4 thereof and orovides that “all laws or aartsof laws in conflict with the orovisions of this Act are hereby reoealed. ~ .” Section 1 of the Act, oroviding in effect that acting as an attorney-in-fact for a reciorocal or inter-insur- ance exchange is a lawful aurpose and nroviding that the general laws for incorooration shall aooly, being in conflict with Article Z.OlB(4)(d) of the Texas Business Cornoration Act, the latter is repealed inaofar as it is in conflict, City of Fort Worth v. State, ex rel. Riglea Village, lEi6 S.W.2d 323. 327. Honorable Zollie Steakley. oage 3 (WW-768) Had the Legislature intended that corporations df the tyDe in question be incoruorated by the State Board of Insurance, it would have been a simple matter so to provide. Instead, the Legislature has directed their incoruoration by your office by virtue of the re- ference to the general laws for incoraoration contained in Section 1 of the Act. In answer to your question, then, we hold that your office has authority to accept and file the articles of incorporation in question. SUh4MARY The Secretary of State has the authority to accent and file articles of incoruoration having the purpose “to act as the attomey- in-fact for a reciprocal or inter-insurance exchange organized and operating undei the nrovisions of Chaoter 19, Texas Insur- ance Code.” Very truly yours, WILL WILSON Attorney General of Texas RVL: jg APPROVED: OPINION COMMITTEE: : w. V,. tippert. Chairman ~C.’K. Richards B., H. ‘Timmons, Jr. W;. 0. Schultz~ “-‘.: Robert Bud Lewis ., REVIEWED FOR +%ATTORNEY GENERAL BY: Leonard Passmore