AUSTIN. TEXAS

January 25, 1950

Ron. George B. Butler, Chairman Board of InsuranceCommissioners Austin, Texas Opinion Bo. V-989
Re:

Dear Sir: The authority of a life insurance company,which owns home office propertiea in another state, to own real estate for a branch office in Texas.
Your request for an opinion presents the question of whether a life insurance company organisedunder the laws of another state in which it has its home office **and** in which it owns home office properties, but licensed to transact business in Texas, may own an office building in Texas for use in connection with the transactionof its business in this State.

In your opinion request you advised of the following:

"The WashingtonRational InsuranceCompany is an Illinois life, health and accident companywith its home offices in Chicago and its executiveoffices in Evanston, Illinois. It is presently licensed to do business in Texas and has been so licensed for a number of years. It owns home office propertiesin Evanston in which its principalrecords are located and from which its principalbusiness is transacted.
"It has recently purchaseda vacant lot in Houston, Texas, on which it has erected a one-storybrick buildingwhich is used exclusivelyas a branch office for the transaction of such of its business as is necessary for that area. . . . "Please advise me whether WashingtonNational InsuranceCompany is authorizedto ownHon. George B. Butler; Page 2 (V-989)

and hold real estate under discuaaion for the purposes abeve outlined."
In studying this questionwe have carefully consideredthe view of the Board,of,InauranceCommiaaioners as presented in your opinion request,briefs submittedby interestedparties,Andy Attorney General's Opinions Nos. O-5823, O-1470, O-4556, O-4587; 0-4587-A, o-5250, and 0-5250-A.by,previousadministrations.

Article 4726, V.C.S., provides in part: "Every such insurancecompanymay secure,hold and convey real property only for the followingpurposesand in the following manner: w(1) One building site and office building for its accommodations in the transactionof its business and for lease, and rental; a .,. Provided,that an aci quisitionof such an office building on leased ground shall be approved by the Board of InsuranceCommissioners of the State of Texas before such investment."
Does this article impliedlyprohibit a foreign insurance companywhich owns office propertiesin another state from owning an office building in Texas? We think not. Any implicationto that effect found in Article 4726 is overcome by Articles 4765 and 4766, V.C.S,

Article 4765, V,C.S., reads as follows: "Each life insurance companynow engaged, or that may hereafter engage in transacting the business of life insurance in this State, shall, as a conditionof its right to transact such business in this State, invest and keep invested in Texas securities and in Texas real estate as hereinafterprovidea, a sum of money equal to at least seventy-five

per cent of the aggregateamount of the legal reserve requiredby the laws of the State of its domicile, e0en (Emphasisours). Article 4766, as amended, Acts 5lst Leg., B.S. 1949, Chapter 438, p. 813, provides, in part, as follows:Hon. George B. Butler, Page 3 (V-989)

The investmentsrequiredby this Chapt~;*~ay

be made by the purchase of not more than one building site, and in the erection thereon of not more than one office building,or in the purchase,at its reaaonable market value, of such office building already constructed and the ground upon which the same is located in any city of the State of more than four thousand (4000) inhabitants...."

read We are of the opinion that Article 4766, when with Article 4765, expresslyauthoriaesa foreign insurance companyto own one office building in this State, even though it may own home office propertiesin another state. We do not believe that it was the intention of the Legislaturein enactingArticle 4766 to give permlasionto own one office building to a foreign insurance company only when it did not own a home office bui,lding,

since many if not moat fore1 r insurance companies would be expected to own home o fice buildings in the state where their home offices are located.

In further support of our opinion,we invite your attentionto Article 4762, V.C.S., which provides:

"The assets of any companynot organized under the laws of this State shall be invested in securitiesor property of the same classespermittedby the laws of this State as to home companiesor by other laws of this State in other securitiesapproved by the Commissioner as being substantially the same grade." The above quoted Articlewas referred to in Attorney GeneralvsOpinion O-5823 in which it was said:

"It is our opinion, therefore,that any foreign insurance companyauthorinedto tranaact in this state any or all kinds of inaurante above named under the proviaionaof Chapter 3, Title 78, (Articles4716-476&b)is authorised to own real estate in this State as authorisedby Article 4726, Et-t- must also be alienatedas provided thereby." (Emphasis ours).Hen, George B, Butler, Page 4 (V-989)

The opinion quoted above points out that foreign insurance companiesauthorizedto transact business in Texaa,havethe same privilegesin Texas as domestic insurance companies. Accordingly, we think any foreign insurance companymay own in Texas one office building as permitted to domestic companies under Article 4726. We are also of the opinion, as indicatedabove, that Article 4766 expressly authorizesout-of-stateinsurance companiesto own one office building in Texas, SUMMARY
A foreign insurance company licensed to do business in Texas may own one office building for use in connection with its business transactionsin this area, even though such insurance company owns home office properties in another state.
APPROVED: Yours very truly, Ned McDaniel PRICE DANIEL State Affairs Division Attorney General Charles D. Mathews ExecutiveAssistant By5fe Assistant