Untitled Texas Attorney General Opinion ( 1939 )

THE ki%TOIRn’EY GENERAL
OF TEXAS
AUSTIS IX. TEXAR
GERALDC. i%ANN
X--XXXXXX
*TrGRSRI- GIESmxaAL
Honorable Marvin Hall, Commissioner
Board of Insurance Commissioners
Austin, Texas
Dear Sir: Attention : Mr. Girard Kinney
i$nion No. 0-159l3A
: Does the law prevent a recording
fire insurance agent from accept-
ing fire insurance business and
paying a commission thereon to a
life insurance agent?
Your recent letter requesting a reconsideration of our Opinion No.
O-159$ has been received.
vie quote from your letter as follows:
"In an opinion received from your office on November 6, 1939,
this office was advised that the license issued by'the Life
Insurance Department of the Board of Insurance Commissioners
would not authorize the agent holding such a license to act
also as an agent, as that term is defined in 505b, su ra
for fire or casualty insurance companies. On Nay R, E946, we
rece'ived from one of the recording agents licensed by this
Departmmt copy of a letter addressed to IW. Fanning of the
Attorney b eneral's office which stated as follows:
"Under date of November 6, 1939 you addressed an opinion
to the Fire Insurance Commission, c/o Ivir. Girard Kinney,
dealing with the subject of whether or not a life in-
surance license permitted a solicitor to accept commis -
sions on fire insurance. This opinion is quite comprehen-
sive, and while the law is somewhat ambiguous on the
point, we are inclined to agree with you that it was at
least the implied intent to make it necessary for a life
insurance solicitor to also take out an additional license
if he desired to solicit fire and allied forms of insurance.
"However, I believe you will agree that it would have been
just as easy for you to have rendered an opposite opinion
depending on the manner in which you desired to construe
the law.
. .
Honorable Marvin Hall, Page 2 o-1598A
"'Nevertheless, the question which we had up with the
Fire Insurance Commissioner really was not %Vould a life
insurance solicitor have a right to solicit and receive
a commission on fire insurance' but 'Does the law pre-
vent a recording fire insurance agent from accepting
fire insurance business and paying a commission thereon
to a life insurance agent.'
"'The only thing we can find on this in the statutes is
Article 5060 captioned ~Commiseion to Non-residents.'
This article prohibits the payment of commieeion on Texas
business to a non-resident of Texas and then goes on to
say 'or to any person or persons, agent, firm, or corpor-
ation not duly licensed by the Commissioner of Insurance
of this State as a fire, fire and g,ara, marine, tornado,
rent accident, casualty, liability, health, elevator,
disability, plate glass, burglary, bonding, title, surety
or fidelity insurance agent.'
trtYou will note that mention is made of accident, health
and disability insurance although no mention is made of
life insurance. Now then, every life insurance agent's
license reads in heavy type across the top of the certi-
ficate, 'Life, Health, Accident and Dieability.~ So it
would seem that the law specifically provides that a duly
licensed fire insurance agent may perfectly legal1 and
properly pay a commission to an agent who holds a Yicenee
from the Board of Insurance Commissioners to write acci-
dent, health and dieability ineurancej and the fact that
the same license includes life insurance would seem to
have no bearing.
We would appreciate very much your opinion on this angle.'
"Your opinion of November 6, appears wholly logical to this
Department; however, in view of the doubt expreseed by Mr.
Larkin, recording agent, Houston, we request that your office
reconsider the above numbered opin1on.e
Our Opinion No. O-1598, was in response to your question which
reads as follows:
"Does the license issued by the Life Insurance Department of
the Board of Insurance Commissioners, and held by a life in-
surance agent authorize that agent to accept a commission
afire or casua i ty insurance business when such agent does not
hold a recording or soliciting ageete license as prescribed
by law under Article 5062a, Vernon's Annotated Civil, Statutes?"
.
Honorable Marvin Hall, Page 3 o-1598A
In answer to the above question it was held in our original
Opinion No. 0-159S that “you are therefore respectfully advised
that it Is the opinion of this department .that the license issued
by the life Insurance Department, of the Board of Insurance Com-
missioners, would not authorize theagent holding such license to
also act as agent as that term is defined in Article 5056, eupra,
for fire or caeua i ty insurance companies. Accordingly, under the
facts as set out in your letter, we answer your question in the
negative.”
you state in your letter above quoted that the question was not
Would a life insurance solicitor have a right to solicit ore
receive a commission on fire insurancee but, “Does the law pre-
vent a recording fire insurance agent from accepting fire insurance
business and paying a commieeion thereon to a life insurance agent,”
It appears to us that the twoquestions are identical in effect
and that the same answer would naturally apply to oothqueetione.
Article 5060, Vernon’s Annotated Civil Statutes, reads as follows:
“Any person, agent, firm or corporation licensed by the Com-
missioner to act as a fire and marine, marine, tornado, rent
accident, casualty, liability, health, elevator, diezbility,
plate glass, burglary, bonding., title, surety, or fidelity
insurance agent in the State of Texas, is hereby prohibited
from aying directly or indirectly, any commieeion, brokerage
or, ot f:er veluaole consideration on account of any policy or
pollcles covering property, pereon.or persons in this State,
to any peraon, persons, agent firm or corporation that is
a non-resident of this State, or to any peraon or persons,
agent, firm or corporation not duly licensed by the Commie-
eioner of Insurance in this State, as a fire account, fire
and marine, marine, tornado, rent accident, casuality, lia-
bility, health, elevator, disability, plate glass, burglary,
bonding, title, surety or fidelity insurance agent .”
Article 572, Vernon’s Annotated Penal Code, makes it a penal of-
fense for any individual to solicit insurance in behalf of any
insurance company without a certificate of authority to act as
agent or solicitor for such corn any, or after such certificate of
authority shall have been capce Eled or revoked.
Article 5055, Vernon78 Annotated Civil Statutes, rovides that
sit shall not be lawful for any person to act wit Rin this State as
agent, or otherwise, in eoliciting or receiving applications for
insurance of any kind whatever, or in any manner to a id in the
transaction of the business of any insurance company incorporated
in this State or out of it, without first procuring a certificate
of authority &om the Commieeioner.w
Honorable Marvin Hall, Page 4 o-159SA
Article 5056, Vernon~e Annotated Civil Statutes, defines who are
insurance agents, which definition would include anyone bringing
fire or casualty insurance business into the office of a licensed
fire and aaeualty recording agent, upon which he accepts commis-
sions.
Article 5062a, Vernon’s Annotated Civil Statutes, regulates the
licensing of recording agents and eolicitore to represent insurance
companies; such Article reads, in part, as follows:
“No provision of this act shall apply to the life insurance
business or the life department of the companies engaged
therein....”
In 1933, there was enacted by the 43rd Legislature what is now
Article 506&b, Vernon’8 Annotated Civil Statutes, which, among
other things, regulated the licensing of agents of life insurance
companies, accident insurance companies, etc. It is eignificant
that at the time of the enactment of this statute regulating the
licensing of life insurance agents, there had already been enacted
the above statute regulating licensing of insurance agents other
than those pertaining to the life insurance business.
As stated in our original Opinion No. 0-159s that “these statutes
evidence a clear legislative intent to require 00th the licensing
of life insurance
'F
agents and fire and casualty company agents.”
Article 50bLa, 8upra, specifically excepts life insurance agents
from its operation. Article 506lio, supra, by its terms applies
only to van agent for a life insurance company, accident insurance
company, life and accident, health and accident, or life, health
and accident insurance company or association, or organieation,
local mutual ai.d association , or state wide mutual aeeociatione
soliciting or writing insurance in the state of Texas, as the
term agent is elsewhere defined in the law.”
Under the above mentioned statutes any person soliciting fire
insurance and receiving a commission thereon would be an agent of
the fire insurance company and would not Abe authorised to act as
an agent for said company unless such agent was duly authorized
and had a license to act forthe fire insurance company. The
fact that the agent holds a life, health, accident and disability
certificate would not authorise him to act as the agent of the
fire insurance company. Tonold that the law does not prevent a
recording fire insurance agent from accepting fire insurance
business and paying a commission thereon to a life insurance agent
would permit the-life insurance agent to evade the above mentioned
statutes and do indirectly what he is prohibited from doing directly.
As above stated the agent of the life insurance company cannot
legally solicit fire insurance business and receive a commission
thereon unless he is duly authorized by the Board and has a
Honorable Itiarvin Hall, Page 5 0-1598A
license as such. Therefore, the life insurance agent could not
lawfully act as the agent of the fire insurance company without
the above mentioned license and it would be unlawful for him to
receive a commission on fire insurance business. It would natur-
ally follow that the recording fire insurance agent could not
accept fire insurance business and pay a commission thereon to
the life insurance agent, which the life insurance agent could
not legally receive.
Trusting that the foregoing fully clarifies our recent Opinion
NO. O-1598, we are
Yours very truly
ATTORNEY
GENXRAL
OF TEXAS
BY Ardell Williams
Assistant
AW:EP:ml
APPROVED
JUL. 8, 1940
GLENNR. LEKCS
ACTINGATTORNEY
GENERAL