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