Santa Fe daily New Mexican., 1897-11-20
INSURANCE LAW.
Bonds Deposited would he subject ia
TaxatiOn-Banks May BE Selected
AS Repositories.

In response to request made by the
| governor, Solicitor General Fall has rem
| dered the following opinion on the law
requiring each insurance company doing
business in the territory to deposit with
the treasurer of the territory not less
than $4,000, either in cash or in bonds
of the territory, or of some county or
city of New Mexico:
| Hon. NJ. A. Otero, Governor of New Mexico,
Santa Fe, New Mexico
Santa Fe, N. M Nov. 10, 1897.-Dear
Sir:-1 am In receipt of your request for
an official opinion upon certain features
of chapter 40 of the Laws of 1897, en-
titled can act requiring deposits of fire
insurance companies doing business in
the territory of New Mexico," approved
March II, 1897.
| ] have given the law referred to my
careful consideration and beg to say that
as to the first and principal question sub
mitted to me for determination, "Would
the bonds deposited by the companies as
required by the act above referred to, be
| subject to state, county and municipal
taxation?" l am of the opinion that
such bonds, whether territorial, county
or municipal, would be subject to terri
torlal, county and municipal taxation at
the place of deposit
further question upon which you
have requested my official opinion is as
to whether or not it would be permissible
under the act of 1897 for the territorial
treasurer to perfect an arrangement with
the com panies at interest by which the
bonds may be held by responsible bank
satisfactory to the treasurer and sub ject
to his order, such bonds to be- delivered
to the treasurer by the bank at any time
on reasonable notice, as for example, Is
days. The purpose of this arrangement,
suggested by certain companies, is that
it will relieve the treasurer of the per-
sonal custody of what may be very large
am cunt of bonds and at the same time
give the company the additional security
afforded by the services of the bank.
There is much reason in the suggestion
that the law of 1897 affords but made
quate protection to the companies for
securities proposed to be deposited. If
the official bond OF the treasurer be in
fact liable for the safekeeping of these
bonds, that bond for all purposes being
only 100000 and it being very possible
that the value of the securities deposited
may equal or exceed that amount, it ls
patent that the proposition of the COM
panies above outlined is not unreason-
able. Of course, no arrangement should
be made that would interfere with the
right of the treasurer to secure and util-
ize the company's bonds for the pur-
poses prescribed by law, but the only
Limitation imposed by such an arrange
ment as that above outlined would be
that the treasurer would be obliged to
give the bank Is days notice of desire
for the securities held by the bank, dur
ing which time the company could be
notified by the bank of this call for it's
securities. The matter of details in case
such an understanding is to be entered
into, would, assume, be arranged by the
treasurer only after full consultation with
this office; and for the present it seems
sufficient to say that am unable to see
how the interests of the territory or of
the policy holders in the territory would
be injured by suoh an arrangement and
believe it would be entirely legal and
permissible. Very respectfully,
ALBERT B. FALL,
Solicitor General of New Mexico.