The Honorable Zollie Steakley 

Secretary of State 

Capitol Station 

Austin 11~. Texas 

Dear Mr. Steakley: 

Opinion No. WW -768 

Re: The authority of the 

Secretary of Stats to accept 

and file DrOoosed articles 

of incoraoration 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 on the authority of your office to 

accept and file articles of incorporation 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 of the Texas Business Corporation Act. a 

corpor8tion could be organized in Texas only if its pronosed puqmee was 

specifically authorfeed by the laws of this state, In one 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 However, as originally enacted t&e:‘&‘% ~:.z ~c,W&ak*eBusiness ;orporation Act specifically prohibited the incorporzMx 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 of Attorneys-in-Fact for reciproca;l exchanges (Art. Z.OlB(4)(d). 

It has been held that prior to the oassage of Article 1513a. Vernon’s 

Civil Statutes the DUrDOSe “to act 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 of which 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 of the Texas Business 
Honorable Zollie Steakley, oage 2 (WW-768) 

Cornoration Act (9.15B). 

At one time, then, the only i~~anner in which a domestic cornoration Drowsing to act as attorneys-in-fact for a reciarocal or interinsurance exchange could be created in Texas was by meeting the 

requirements of Article 1513a. Such situation was altered by the last 

Legislature by the DaSSage of S.B. 90, which amended Article 19.02 of 

the Texas Insurance Code. 

Section 1 thereof 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 of this 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 of the oassage of the Act and mean in this case 

the Texas Business Cornoration Act. 

Section 3 of S.B. 90 nrovides: 

“Chanter 388 of the Acts of the 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 of this provision cornoration attorneys-in-fact for 

reciorocais need no longer meet the rather stringent canitalization~ 

requirements of Article 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 

of this Act are hereby reoealed. ~ .” Section 1 of the 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) of the 

Texas Business Cornoration Act, the latter is repealed inaofar as it is 

in conflict, City of Fort Worth v. State, ex rel. Riglea Village, lEi6 S.W.2d 

323. 327. 
Honorable Zollie Steakley. oage 3 (WW-768) 

Had the Legislature intended that corporations df the tyDe 

in question be incoruorated by the State Board of Insurance, it would 

have been a simple matter so to provide. 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 

of the Act. 

In answer to your question, then, we hold that your office 

has authority to accept and file the articles of incorporation in question. 

SUh4MARY 

The Secretary of State 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 of Chaoter 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