‘Ihe Honorable Jesse James Treasurer, State of Texas State Capitol Building Austin, Texas 78711

Dear Mr. James: Opinion No. H- 745 Re: Procedure for return to insurance companies of matured securities filed as collateral with the State Treasurer. You have requested our opinion concerning your authority toutilize certain procedures with regard to the return of matured securities toan insurance company upon instruction from the State Board ofInsurance, As required bythe Insurance Code, the State Treasurer is the custodian of various securities pledged by insurance companies. Ins. Code art. 1.10, 517(a); see arts. 3.15, 3.23, 8.05, 9.12, 14.10, 17.25, 19.06. Upon order of theommissioner ofInsurance, the Treasurer is to “release, transfer and deliver such deposit or deposits to the owner as directed in said order.” Ins. Code art. 1.10, 517(e). Due to the costs and risks involved in the transmission ofthe securities, you have asked the,following questions:

(1) May the State Treasurer require insurance companies making deposits to designate a local agent towhom the securities can be delivered? (2) May the State Treasurer or the Commissioner ofInsurance require insurance companies to deposit only registered securities in his care? (3) May the State,Treasurer deliver the securities tothe Board ofInsurance for subsequent delivery tothe companies?

p. 3163The Honorable Jesse James, page 2 (H-745)

While the State Treasurer has noexpressly provided rule making authority, he may exercise those powers necessary and proper tothe fulfillment ofhis statutory duties. Terre11 v. Sparks, 135S.W. 519 (Tex. Sup. 1911);Corzelius v. Railroad Commission, 182S.W. 2d412 (Tex. Civ. App. --Austin 1944, nowrit). The State Treasurer has the statutory duty to deliver these securities. However, the legal delivery ofadocument does not necessarily entail amanual delivery. Henry v. Phillips, 151S.W. 533 (Tex. Sup. 1912). The court in that case held that the deposit ofa deed with abank constituted a sufficient delivery. In Brown v. Rodgers, 248S.W. 750 (Tex. Civ. App. --Amarillo 1923, nowrit), the court stated:

Any act or declaration on the part ofthe grantor, denoting an intention to give apresent effect tothe executed conveyance, is said to be sufficient to constitute delivery. (citations omitted) Thus leaving the deed with the notary or an attorney, to be delivered tothe grantee when called for, delivery to the recorder for registration with instructions to deliver tothe grantee when recorded, deposit inthe post office addressed to the grantee, and acts of such character have been held sufficient to constitute delivery. 248 S.W. at 750. See also, Tyler V. Bauguss, 148 S.W. 2d912(Tex. Civ. App. --Dallas 1941,writ dism’d. jdgmt. car. ); Wvcoff Warehouse, Inc. v. Public Service Commission, 403 P. 2d 168(Utah 1965). Since article 1.10, section 17(e) is silent with respect to the manner ofdelivery, it is our view that reasonable procedures may be adopted for the delivery ofthe securities. Accordingly, while we do not believe the designation ofalocal agent may be required, in our opinion itmay be indicated that delivery will be made in Austin, Texas, tothe owner or his authorized representative. Your second question is whether companies may be required todeposit only registered securities. Article 1.10, section 17(a) and article 3.15 of the Insurance Code require only that the securities governed thereby be legal investments ofthe companies. Articles 8.05 and 19.06 require only

p. 3164The Honorable Jesse James, page 3 (H-745)

that the securities be one ofthose listed in article 2.10. See also Ins. Code arts. 9.12, 9.18. Only article 14.10 regarding mutual assessment companies and article 17.25 regarding county mutual companies do not~definitively provide which securities are acceptable. Those statutes allow “convertible securities subject to approval ofthe Board” ofInsurance to be deposited. In our view where the type of securities is expressly limited by statute, neither the Treasurer nor the Commissioner ofInsurance may require these securities tobe registered, for powers may not be implied where a statute is explicit on the point in question. Creager v. Hidalgo County Water Improvement Dist. No. 4, 283 S.W. 151(Tex.Comm’n.App. 1926, jdgmt. adopted). Your final question is whether the Treasurer may deliver the securities tothe Board ofInsurance for subsequent delivery tothe various companies. Article 1.10, section 17(e) provides that the Treasurer shall “release, transfer and deliver such deposit or deposits to the owner as directed in said brder. ” Since the statute expressly requires delivery by the Treasurer to the owner it is our view that he may not merely deliver the securities to the Board ofInsurance, SUMMARY The State Treasurer may indicate that delivery of securities will be made in Austin, Texas, tothe owner or his authorized representative. Neither the State Treasurer nor the State Board ofInsurance may require cleposited securities to be registered where the type of security is expressly limited by statute. The Treasurer may not merely deli,ver the securities to the Roard ofInsurance for subsequent delivery.

p. 3165The Honorable Jesse James, page 4 (H-745)

APPROVED:

T232b.J .o,.m DAVID M. KENDALL, First Assistant

SEATH, Chairman ;--L C. ROBERT 1 Opinion Committee

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