The Honorable Zollie Steakley Secretary ofState Capitol Station Austin 11~.

Texas

Dear Mr. Steakley: Opinion No. WW-768
Re: The authority ofthe Secretary ofStats toaccept and file **DrOoosed** articles ofincoraoration having the **~urpo8e** to act as attorney-infact for a recinrocal or interinsurance exrfiange organized and operating under the orovisions of Chapter 19, Texas Insurance Code. You have asked our opinion onthe authority ofyour office to accept and file articles ofincorporation which include the following Duroose clause: “The Purpose for which the corporation is organized is to act as the attorney-in-fact for a reciprocal or inter-insurapce exchange organiaed and ooerating under the provisions of Chapter 19. Texas Insurance Code.” Prior to the passage ofthe Texas Business Corporation Act. 

### a corpor8tion could be organized in Texas only if its pronosed puqmee was specifically authorfeed by the laws ofthis state, Inone of the most fundamental changes made in our corporate law by the Buainess CORDoration Act, corDorations may now be organized for any lawful ouruose 

### or purnoses (Art. 2.01A). However, as originally enacted t&e:‘&‘% ~:.z~c,W&ak*eBusiness ;orporation Act specifically prohibited the incorporzMx under ofAttorneys-in-Fact for reciproca;l exchanges (Art. Z.OlB(4)(d).

Ithas been held that prior tothe oassage ofArticle 1513a. Vernon’s Civil Statutes the **DUrDOSe** “toact as attorney-in-fact for a reciprocal or inter-insurance exchange” 

### was not a lawful purpose for which corporationa could be formed in Texas (WW-395). Article 1513a is a ape&al act authori8+ ing the creation of corporations the purpose ofwhich may be, among other things. to act as attorneys-in-fact for rsciorocal exchanges. They must meet certain specified requirements among which is a fully oaid in capital of $500.000. Being a special act dealing with a uarticular kind of corporation, Article 1513a was not reuealed by the passage ofthe Texas BusinessHonorable Zollie Steakley, oage 2 (WW-768)

Cornoration Act (9.15B).

At one time, then, the only i~~annerinwhich adomestic cornoration Drowsing to act as attorneys-in-fact for a reciarocal or interinsurance exchange could be created in Texas was by meeting the requirements ofArticle 1513a. Such situation was altered by the last Legislature by the **DaSSage** ofS.B. 90, which amended Article 19.02 of the Texas Insurance Code.

Section 1thereof reads as follows:

“A corporation may be organized in Texas to act as attorney-in-fact for a reciorocal or inter-insurance exchange. The general laws for incorporation shall sunolement the orovisions ofthis Act to the extent that they are not inconsistent with the provisions hereof.” The “general laws for incorooration” referred to are obviously those in effect at the time ofthe oassage ofthe Act and mean in this case the Texas Business Cornoration Act.

Section 3 of S.B. 90nrovides:

“Chanter 388 ofthe Acts ofthe 55th Legislature, 1957, (Article 1513a) shall not anply to a cornoration. either domestic or foreign, which acts only as attorneyin-fact for a reciprocal or inter-insurance exchange.” By virtue ofthis provision cornoration attorneys-in-fact for reciorocais need no longer meet the rather stringent canitalization~ requirements ofArticle 1513a.

The “repealer” clause of S. B. 90 is found in Section 4 thereof and orovides that “all laws or aartsof laws in conflict with the orovisions ofthis Act are hereby reoealed. ~.” Section 1ofthe Act, oroviding in effect that acting as an attorney-in-fact for a reciorocal or inter-insurance exchange is a lawful aurpose and nroviding that the general laws for incorooration shall aooly, being in conflict with Article Z.OlB(4)(d) ofthe Texas Business Cornoration Act, the latter is repealed inaofar as it is in conflict, City ofFort Worth v. State, ex rel. Riglea Village, lEi6S.W.2d 323. 327.Honorable Zollie Steakley. oage 3 (WW-768)

Had the Legislature intended that corporations dfthe tyDe in question be incoruorated by the State Board of Insurance, itwould have been a simple matter so toprovide. Instead, the Legislature has directed their incoruoration by your office by virtue of the reference to the general laws for incoraoration contained in Section 1 ofthe Act.

Inanswer to your question, then, we hold that your office has authority to accept and file the articles of incorporation inquestion.

SUh4MARY The Secretary ofState has the authority to accent and file articles of incoruoration having the purpose “to act as the attomeyin-fact for a reciprocal or inter-insurance exchange organized and operating undei the nrovisions ofChaoter 19, Texas Insurance Code.” Very truly yours, WILL WILSON Attorney General of Texas

RVL: jg APPROVED: OPINION COMMITTEE:

: w. V,.tippert. Chairman

~C.’K. Richards B.,H.‘Timmons, Jr. W;. 0. Schultz~

“

-‘.: Robert Bud Lewis .,

REVIEWED FOR +%ATTORNEY GENERAL BY: Leonard Passmore