Court Opinion

ID: 4140507
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:59:51.883494+00
Date Added: 2024-06-11T14:19:35.228204
License: Public Domain

OFFICE    OF THE ATTORNEY GENERAL            OF TEXAS
                                 AUSTIN

Honorable Marvin Hall, COmmiSsiOner
Board of Insurance Commissioners
Austin,  Yexas
Dear Sir:                     Opinion No. C-5
                              Re: May Board'0
                                  missioners  a

            The above question i
by your letters   dated December                         relating to the
claim against Standard.1 Accide                         mpany of Detroit,
Mchigan   for retaliatory   taxes                       1940, 1941 and
1942 and the other relat                               Fire & Marine
Insurance Company of D                                 for the years
1941 and 1942.
                                                       inding the existence
of a bona fide cant                                    and recommending to
the Attorney Genera                                 settlement  be accepted,
is attached
                                           arises   under the provisions

                            ny law in force without this
                            corporation,     fraternal     bene-
                            eciprocal    exchange of this
                            of is required to make any
                         ies thereunder for the protec-
                     holders or otherwise,        or to make
      payment for taxes, fines,     penalties,     certificates
      of authority, valuation    or policies,     license     fees,
      or otherwise, or any special burden is imposed,
    non. Uarvin Hall - Page 2

         greeter   than is required by the laws of this State
         for similar foreign corporations          or their agents,
.        the insurance companies, fraternal           beneficiary
         societies   and reciprocal      exchanges of such States
         or governments shall be and they are hereby re-
         quired as a condition       precedent to their trans-
         acting business in this State, to make a like de-
         posit for like purposes with the State Treasurer
         of this State, and to pay to the Conmissioner of
         Insurance for taxes, fines,         penalties,    certificates
         of authority,     valuation    of policies,    license     fees
         and otherwise a rate equal to such charges and pay-
         nents imposed by the laws of such other State upoh
         similar   corporations     of this State and the agents
         thereof.    Any corporation      refusing for thirty         (30)
         days to make payment dsuch fees or taxes as above re-
         quired shall have its certificate           of authority      re-
         voked by the Commissioner of Insurance;            provided,
         that insurance corporations         organized under the laws
         of any State or country,        other than these United
         States shall,     as to the provisions       of this Act, be
         considered    corporations    of that State wherein their
         general deposit for the benefit          of their policyholders
         is made. I1
               In connection with this request, we have reviewed a
    joint brief filed on behalf of the two companies concerned.      We
    have also held several conferences   with Fr. Albert Boggess, Jr.,
    Chief Clerk Recording Agents License Section,    who, at our re-
    quest, has been very cooperative   in furnishing  us data from his
    file pertaining  to the assessments in controversy.    Eesides re-
    viewing the previous opinions of this department, such efforts,
    together with a studied review of the limited nmber of court
    decisions,  were expended in order to determine,    if possible,
    the real and basic reasons for the controversy.
              We fully appreciate   the fact that a tremendous burden
    is placed by the Legislature   upon the Insurance DepartKent in
    enforcing  the provisions  of the retaliatory     law, Article   4758,
    V. A. C. S. While this department has previously        rendered
    opinions to the several Commissioners of Insurance,        dating from
    January, 1936, we find no particular     conflict   in their holdings..
Hon. Marvin Hall    - pag$ 3

The latest   expression   from this department appears in our
opinions Nos. O-1997-A and O-2585.          In the latter,   we
held in an opinion addressed to you that the Insurance
Department is authorized      to charge New Rampshire companies
a fee for all soliaiting      agents holding authority     to
solicit  business for Said foreign       companies and operating
out of Texas Recording Agencies which have been appointed
by said New Hampshire companies. In the former, addressed
to your supervisor     of Agents’ Licenses,      we held that the
aggregate of all taxes, fines,        penalties,   fees, and other
charges imposed by the State of Kansas on a Texas Corpora-
tion operating within its borders should be considered           in
applying the retaliatory      provisions    of the Texas law.
           In an opinion rendered to Honorable R. L. Daniels,           ’
Commissioner of Insurance,  under date of July 20, 1936, it
was pointed out and we quote:
            “Unless a given situation      clearly  gives rise
     to retaliation    under our statutes,      the Retaliatory
     Law should not be applied,       for the reason that re-
     taliatory    laws are strictly     construed against the
     state enacting them, e.nd in favor of the company
     or person to be affected       thereby.    This rule is
     announced in many cases, among which is that of
     Bankers Life vs. Richardson,        192 Cal. 113, 218
P. 586, 591; and Life 6c Casualty Insurance
     Company of Tennessee vs. Coleman, 233 Ky. 350,
     25 S. W. (2d) 748.”
             v:e are constrained     to believe that wa have doubtless
given insufficient      consideration      to your application  of this
retaliatory     law.   Sfnae 1939, such opinions rendered by this
department as may have been useful in your interpretation              and
application     of this statute,     reflect   the confusion brought
about by the language employed in the case of Employers Casual-
ty Company vs. Hobbs, Commissioner, 149 Kansas 774, 89 Pacific
(2d) 923, rendered in Kay of that year.            The language of the
opinion in that case by the Supreme Court of Kansas appears to
conflict    in many respects    with our prior opinions.       In this
conneation,     we call your attention       to the fact that none of the
prior opinions of this department were overruled by our opin-
ions 0-1997-A and O-2585 which as a result,            must be construed
therewith.
Hon. Marvin Hall - page 4

           Coming now to the specifia  controversy in question,
there is involved only agents’ license   lees, one item of the
named class of burdens which fall within the seaond group
set forth in the statute,  as pointed out in an opinion ren-
dered to Honorable Raymond Mauk, written by Mr. Vernon Coe,
Assistant  Attorney General of Texas, under date of July 7,
1936.
            It is our nnderstanding        and baaed upon question-
naire kom in use by the department since the year 1940, that
it has been the praatice       of the Insurance Department to apply
in certain case3 our retaliatory          law to agent’s license        fees
by assessing   foreign insurance companies of a given state on
the sole basis of the larger license          fee required by the laws
of the foreign state without taking into consideration                 the
aggregate amount of all taxes, fines,           penalties,    certificates
of authority,    valuation    of policies,    or otherwise,      required
by the laws of Texas and paid by companies of the foreign                  state
doing business in this State, as a condition             precedent.       This
is what the department termed assessment by comparing fee
against fee or made.on an nindividual           basis”,    and was general-
ly done where in response to a question propounded in the
questionnaire    to the Insurance Department of the foreign               state,
said state officials      acknowledged applying the retaliatory              law
of their state likewise,       namely, “fee against fee”,         or “indi-
vidual bases”.     With reference      to the state of Xichigan here
under consideration,     we observe that during the years in ques-
tion, its retaliatory      law existed,     substantially     worded the
same as our statute,      Article    4750, V. A. C. S. We can further
assume tram the facts that during these years, Texas aompanies
in the State of Michigan were assessed or subject to aasesa-
ment on the “individual       basis,”
            We are doubtful     that the Legislature    intended in en-
acting Article     4758, to authoriae    the Insurance Department to
take individually,      one item specified    therein,  namely, Agent’s
License Fees and by comparison,        apply the retaliatory    provi-
sions of the statute in the face of the aggregate of all taxes
etc. grouped as like items, greatly         exceeding in Texas and pay-
able under our laws, the aggregate of such items imposed by the
laws of biichigan.     We are convinced that the weight of author-
ity is against such aindiviaual        basis” assessment under this
factual  situation    existing   between these two states.
.

    Hon. Marvin Hal.1 - page 5

              Unless a case arises whereby a state is authorized
    to apply the retaliatory  provisions   of its law, it is further
    doubtful but that the only state authorized to allow credit
    is the state in which such retaliatory    assessment is author-
    ized to be made.
               Our conclusion    is reached from an examination of
    the records and all faats.submitted      to this department in
    aonnection with this request* Same shows grave doubt as to
    whether such situation    as existed,   considering  the aggregate
    amount of taxes etc. paid by the -Standard Accident Insurance
    Company and the kichigan Fire & Marine Insurance Company of
    the state of Viahigan to the State of Texas for the years
    1940, 1941 and 1942, made a proper case for the application
    of the retaliatory   provisions   of our retaliatory   law to the
    item of Agent’s License Fees.
                It is therefore    our opinion that you are authorized
    to accept the amounts voluntarily       tendered to your department
    in settlement    of such controversy    over these years. This rul-
    ing however, is not to be construed aa applying to any other
    fact situation    or controversy   or to affect   other companies
    or charges and payments made for other years.
               We are returning herewith,    the brief   and other   doou-
    ments belonging to your file.
                                                 Yours very truly
                                            ATTORNEY
                                                   GENERALOF TEXAS

                                            BY     /S/
                                                         Wm. J. R. King
                                                              Assistant
    WJRK:ff :bb
    Encl.
    APPROVEDJAN. 28, 1944                   APPROVED OPINION EMvIIT-
    /s/ Grover Sellers                      TEE BY-P.W.,Chainnan
    ATTORNEYGENERAZOF TEXAS