Untitled Texas Attorney General Opinion ( 1942 )

AITORNEY GENERAL
OFTEXAS
Mr. C. P. Lockhart, Chairman
Board of Insurance Cotiissioners
Austin, Texas
Dear Sir:
Opinion No. o-.4596
Re: Merger of Teachers Annuity
Life Insurance Company and
Texas State Life Insurance
Company-
You have submitted to us for approval certain documents designed to effect
a merger of the Teachers Annuity Life Insurance Company and the Texas
State Life Insurance Company. We refuse to approve said documents for
the following reason:
Article 5040, Vernon's Revised Civil Statutes, authorizes, under certain
conditions, the consolidation or merger of two or more insurance companies
"previously organized under the laws of this State." In the opini~onof this
Department, the privilege of consolideting or merging is extended only to
insurance companies lawfully organized under the laws of Texas.
In our opinion No. O-4237, we advised you that real estate, encumbered
or not, could not under Article 4720 constitute the cap-ltalstock in
whole or in part of a life insurance company upon orl.ginalincorporation;
that the capital stock of the company at that time must consist of “cash
or securities" of the class in which such corporations are authorized by
Article 4723 to invest their funds.
At the time of the chartering and the issuance of first certificate of
authority to do business to the Teachers Annuity Life Insurance Company,
its capital stock consisted of mortgaged real estate. A suit by the
State against the Teachers Annuity Life Insurance Company is presently
pending in the 53rd District Court of Travis County, wherein this fact
is alleged and the court requested to declare the charter of such
company to be void.
Under these circumstances, we are of opinton that the law does not
authorize the Teachers Annuity Life Insurance Company, not lawfully
organized -underthe laws of Texas, to consolidate or merge with
another insurance company.
Mr. 0. P. Lockhart, Page 2 O-4:96
In view of this situation, we do not find it necessary to express an
opinion upon other questions relatin,
0 to the proposed merger or
consolidation.
The documents enclosed with your letter are returned herewith.
Yours very truly
ATTORNEY GENERALOF TEXAS
s/ R. W. Fairchild
BY
R. W. Fairchild
Assistant
RWF:L&l/ldw
ENCMSURE
APPROVEzDJUN 2, 1942
s/ Gerald.C. Mann
ATTORNEX GENERAL OF TEXAS
APPROVED
OPINION COMMIYXE
BY B. W. B.
CHAIRMAN