Honorable William A. Harrison Opinion No. ini-656 

Commissioner of Insurance 

State Board of Insurance Re: Whether Article 

Austin 14, Texas 21.11, Texas Insurance 

Code, the Non-Resident 

Agent's Licensing Law, 

is applicable to persons 

Dear Mr. Harrison: residing in Puerto Rico 

You request a:; opinion "as to whether the word 'State' 

as used in Article 21.11, limits ;:?e p;'o‘:i,i.ons of such statute 

to 'c"e o.:;qer 48 states of the u~litsaj ~~;ates, or whether j.t 

extends -to territories, provinces and commonwealths and in 

particular Puerto Rico?" 

The non-resident agent's licensing law found in Article 

21.11, Texas Insurance Code, provides: 

"Upon application, in s,uch form as the 

Board of Insurance Commissioners may require, 

a non-resident of this State who is duly licensed 

to transact insurance other than life under the 

laws of the State wherein such applicant resides, 

if such State does not prohibit residents of this 

State from acting as insurance agent therein, the 

Board of Insurance Commissioners may issue to such 

applicant a Non-Resident Agent's license." 

This provision became part of Article 21.11 by amendment in 1955, 

Acts 54th Leg., 1955, p. 604, ch. 210, gl. 

It is not a novel definition of the word "State" to 

define it generally so as to include territories, provinces and 

commonwealths of the United S'ca.tes i~f the purposes and intent 

of a oarticular statute indica%e ~Z1a.L such a definition was 

intended. Talbott v. Sil-der Bow County, 139 U.S. 438 (1891), 

was a case 'nvolving an attempt by Montana territory to tax 

shares of stock owned by an individual in a national bank located within the territory. Congress had passed a statute 

granting permission for States to tax shares of stock as the 

territory had attempted to do in this case. The contention was 

made that the consent was giv~en only to States as such and did 

not extend to territories. The Court, basing its decision on 
Honorable William A. Harrison,Page 2. (w-656) 

the purpose of the law and the intent of Congress, held that 

the word "State" should be defined generally so as to include 

territories. 

page 444: 

In reaching this conclusion, the Court said.at 

"Still further, while the word State is 

often used in contradistinction to Territory, 

yet in its general public sense, and as sometimes used in the statutes and the proceedings 

of the government, it has the larger meaning 

of any separate political community, including 

therein the District of Columbia and the Territories, as well as those political communities 

known as States of the Union." 

The Court quoted with approval the following passage from Geofroy 

V. Riggs, 133 U.S. 258, 268 (1890): 

I! 

. . . . separate communities, with an 

independent local government, are often described as States, though the extent of their 

political sovereignty be limited by relations 

to a more general government or to other 

countries." 

Mora v. Majias, 206 F. 2d 377, 387 (1st Cir.l953), was a recent 

case involving an attempt to enjoin the enforcement by the Secretary of Agriculture and Commerce of Puerto Rico of a price regulation setting a maximum price on rice. In upholding a refusal by 

a single judge district court to grant the injunction, the Court 

discussed the applicability of 28 U.S.C. s2281, which requires 

a three judge federal district court for injunctions restraining 

the operation or execution of any State statute. Referring to 

the Act of Congress whereby Puerto Rico was transformed from a 

territory into a commonwealth, the Court said: 

"Puerto Rico has thus not become a 

State in the federal Union like the 48 States, 

but it would seem to have become a State within 

a common and accepted meaning of the word . . . 

It is a political entity created by the act 

and with the consent of the people of Puerto 

Rico and joined in union with the United States 

of America under the terms of the compact. 

"A serious argument could therefore be 

made that the Commonwealth of Puerto Rico is 

a State within the intendment and policy of 

28 U.S.C. ~2281." 
Honorable William A. Harrison,Page 3. (w-656) 

Turning now to Article 21.11, Texas Insurance Code, 

we find in the emergency clause of the act passing the amendment an expression of what the Texas Legislature was attempting 

to do when they passed the amendment. This clause reads as 

follows: 

"The fact that many other States issue 

licenses to Non-Resident Agents and permit 

the division of commission on a retaliatory 

basis, makes it impossible for a Recording 

Agent of Texas to obtain a Non-Resident 

Agent's license in these States and thereby 

citizens of Texas having property located in 

these other States are prevented from having 

the services of their own Recording Agents of 

Texas for such risks, . . . .'I 

The purpose of this amendment is to accommodate citizens 

of Texas, who own property in States other than Texas, by providing a way whereby Texas Recording Agents can obtain NonResident Agent's licenses in those States due to their reciprocity requirements; therefore, the word "State" should be 

defined to give effect to this legislative purpose. 

It is quite possible and probable that Texas citizens 

will own property in the territories, provinces and commonwealths 

of the United States as well as the other forty-eight States. If 

such territories, provinces and commonwealths require reciprocity 

in order to license Non-Resident Agents, then to define the word 

"State" not to include such areas would defeat the intention of 

the Legislature in passing this amendment. For example, the 

Commonwealth of Puerto Rico requires such reciprocity (Puerto 

Rico Ins. Code, Art. 9.260). 

In other words the pilruose of this amendment is to 

license non-residents in order that Texas Agents can meet reciprocity requirements in other jurisdictions, and any construction 

of this statute which would restrict the licensing of nonresidents to those residing in the other 48 States would partially defeat this purpose. 

It is our opinion that the word "State" as used in 

Article 21.11, Texas Insurance Code, should be given a general 

construction so that a territory or commonwealth exercising 

local sovereignty over a geographical area under Federal 

dominion, as for example the licensing of Insurance Agents, 

would fall within the scope of Article 21.11. 
Honorable William A. Harrison,Page 4. (wW?%) 

SUMMARY 

The word "State" as used in the 

Non-Resident Agent's licensing 

clause found in Article 21.11, Texas 

Insurance Code, includes territories, 

provinces and commonwealths and in 

particular Puerto Rico. 

Very truly yours, 

WILL WILSON 

Attorney General of Texas 

BY 

Assistant 

JF:mfw 

APPROVED: 

OPINION COMMITTEE 

Riley Eugene Fletcher, Chairman 

Marvin Brown 

Dean Davis 

Leonard Passmore 

REVIEWED FOR THE ATTORNEY GENERAL 

BY: W. V. Geppert