Court Opinion

ID: 4144806
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:49:36.273758+00
Date Added: 2024-06-11T14:35:36.947665
License: Public Domain

THE     ki%TOIRn’EY            GENERAL
                                OF    TEXAS
                                AUSTIS IX. TEXAR
GERALDC. i%ANN
X--XXXXXX
*TrGRSRI- GIESmxaAL

   Honorable Marvin Hall, Commissioner
   Board of Insurance Commissioners
   Austin, Texas
   Dear Sir:                         Attention   : Mr. Girard Kinney
                                     i$nion      No. 0-159l3A
                                        : Does the law prevent a recording
                                            fire insurance agent from accept-
                                            ing fire insurance business and
                                            paying a commission thereon to a
                                            life   insurance agent?
   Your recent letter  requesting      a reconsideration   of our Opinion No.
   O-159$ has been received.
   vie quote from your letter     as follows:
        "In an opinion received     from your office  on November 6, 1939,
        this office  was advised that the license issued by'the Life
        Insurance Department of the Board of Insurance Commissioners
        would not authorize the agent holding such a license      to act
        also as an agent, as that term is defined in 505b, su ra
        for fire or casualty insurance companies.       On Nay R, E946, we
        rece'ived from one of the recording agents licensed     by this
        Departmmt copy of a letter addressed to IW. Fanning of the
        Attorney b eneral's  office    which stated as follows:
               "Under date of November 6, 1939 you addressed an opinion
               to the Fire Insurance Commission, c/o Ivir. Girard Kinney,
               dealing with the subject of whether or not a life in-
               surance license   permitted a solicitor    to accept commis -
               sions on fire insurance.      This opinion is quite comprehen-
               sive, and while the law is somewhat ambiguous on the
               point, we are inclined    to agree with you that it was at
               least the implied intent to make it necessary for a life
               insurance solicitor   to also take out an additional    license
               if he desired to solicit    fire and allied   forms of insurance.
               "However, I believe you will agree that it would have been
               just as easy for you to have rendered an opposite opinion
               depending on the manner in which you desired to construe
               the law.
                                                                                 . .
Honorable Marvin Hall,    Page 2        o-1598A

         "'Nevertheless,    the question which we had up with the
         Fire Insurance Commissioner really was not %Vould a life
         insurance solicitor    have a right to solicit and receive
         a commission on fire insurance'    but 'Does the law pre-
         vent a recording fire insurance agent from accepting
         fire insurance business and paying a commission thereon
         to a life insurance agent.'
         "'The only thing we can find on this in the statutes is
         Article     5060 captioned ~Commiseion to Non-residents.'
         This article      prohibits   the payment of commieeion on Texas
         business to a non-resident         of Texas and then goes on to
         say 'or to any person or persons, agent, firm, or corpor-
         ation not duly licensed by the Commissioner of Insurance
         of this State as a fire,        fire and g,ara,    marine, tornado,
         rent accident,      casualty,   liability,  health, elevator,
         disability,     plate glass, burglary,     bonding, title,   surety
         or fidelity     insurance agent.'
         trtYou will note that mention is made of accident,          health
         and disability   insurance although no mention is made of
         life insurance.    Now then, every life insurance agent's
         license   reads in heavy type across the top of the certi-
         ficate,   'Life, Health, Accident and Dieability.~         So it
         would seem that the law specifically        provides that a duly
         licensed   fire insurance agent may perfectly       legal1    and
         properly pay a commission to an agent who holds a Yicenee
         from the Board of Insurance Commissioners to write acci-
         dent, health and dieability      ineurancej and the fact that
         the same license    includes life    insurance would seem to
         have no bearing.

         We would appreciate     very much your opinion      on this   angle.'
     "Your opinion of November 6, appears wholly logical to this
     Department; however, in view of the doubt expreseed by Mr.
     Larkin, recording agent, Houston, we request that your office
     reconsider  the above numbered opin1on.e
Our Opinion  No. O-1598, was in response     to your question    which
reads as follows:
     "Does the license   issued by the Life Insurance      Department of
     the Board of Insurance Commissioners, and held        by a life in-
     surance agent authorize that agent to accept         a commission
    afire or casua i ty insurance business when such      agent does not
     hold a recording or soliciting    ageete license     as prescribed
     by law under Article    5062a, Vernon's Annotated     Civil, Statutes?"
.
    Honorable Marvin Hall,          Page 3               o-1598A

    In answer to the above question it was held in our original
    Opinion No. 0-159S that “you are therefore   respectfully   advised
    that it Is the opinion of this department .that the license     issued
    by the life Insurance Department, of the Board of Insurance Com-
    missioners, would not authorize theagent    holding such license to
    also act as agent as that term is defined in Article      5056, eupra,
    for fire or caeua i ty insurance companies.  Accordingly,   under the
    facts as set out in your letter,   we answer your question in the
    negative.”
    you state in your letter  above quoted that the question was not
    Would a life insurance solicitor   have a right to solicit   ore
    receive a commission on fire insurancee but, “Does the law pre-
    vent a recording fire insurance agent from accepting    fire insurance
    business and paying a commieeion thereon to a life insurance agent,”
    It appears to us that the twoquestions   are identical in effect
    and that the same answer would naturally apply to oothqueetione.
    Article      5060, Vernon’s     Annotated    Civil   Statutes,    reads as follows:
              “Any person, agent, firm or corporation             licensed by the Com-
              missioner to act as a fire and marine, marine, tornado, rent
              accident,    casualty,   liability,      health, elevator,     diezbility,
              plate glass, burglary,       bonding., title,      surety,   or fidelity
              insurance agent in the State of Texas, is hereby prohibited
              from aying directly        or indirectly,      any commieeion, brokerage
              or, ot f:er veluaole consideration         on account of any policy or
              pollcles    covering property,       pereon.or persons in this State,
              to any peraon, persons, agent firm or corporation that is
              a non-resident     of this State, or to any peraon or persons,
              agent, firm or corporation        not duly licensed by the Commie-
              eioner of Insurance in this State, as a fire account, fire
              and marine, marine, tornado, rent accident,                casuality,    lia-
              bility,    health, elevator,      disability,     plate glass, burglary,
              bonding, title,      surety or fidelity       insurance agent .”
    Article   572, Vernon’s Annotated Penal Code, makes it a penal of-
    fense for any individual    to solicit  insurance in behalf of any
    insurance company without a certificate      of authority to act as
    agent or solicitor    for such corn any, or after such certificate  of
    authority   shall have been capce Eled or revoked.
    Article   5055, Vernon78 Annotated Civil Statutes,      rovides that
    sit shall not be lawful for any person to act wit Rin this State as
    agent, or otherwise,   in eoliciting  or receiving    applications   for
    insurance of any kind whatever, or in any manner to a id in the
    transaction   of the business of any insurance company incorporated
    in this State    or out of it, without first    procuring a certificate
    of authority &om the Commieeioner.w
Honorable Marvin Hall,      Page 4   o-159SA

Article  5056, Vernon~e Annotated Civil Statutes,  defines who are
insurance agents, which definition  would include anyone bringing
fire or casualty insurance business into the office    of a licensed
fire and aaeualty recording agent, upon which he accepts commis-
sions.
Article   5062a, Vernon’s Annotated Civil Statutes,   regulates the
licensing   of recording agents and eolicitore  to represent insurance
companies; such Article   reads, in part, as follows:
          “No provision of this act shall apply to the life insurance
          business or the life department of the companies engaged
          therein....”
In 1933,   there was enacted by the 43rd Legislature      what is now
Article   506&b, Vernon’8 Annotated Civil Statutes,      which, among
other things, regulated the licensing      of agents of life insurance
companies, accident insurance companies, etc.         It is eignificant
that at the time of the enactment of this statute regulating          the
licensing   of life insurance agents, there had already been enacted
the above statute regulating    licensing    of insurance agents other
than those pertaining    to the life   insurance business.
As stated in our original       Opinion No. 0-159s that “these statutes
evidence a clear legislative        intent to require 00th the licensing
of life insurance
              'F
                       agents  and  fire  and casualty company agents.”
Article    50bLa, 8upra, specifically      excepts life insurance agents
from its operation.       Article   506lio, supra, by its terms applies
only to van agent for a life insurance company, accident insurance
company, life and accident,        health and accident,   or life,   health
and accident insurance company or association,          or organieation,
local mutual ai.d association       , or state wide mutual aeeociatione
soliciting     or writing insurance in the state of Texas, as the
term agent is elsewhere defined in the law.”
Under the above mentioned statutes any person soliciting            fire
insurance and receiving       a commission thereon would be an agent of
the fire insurance company and would not Abe authorised to act as
an agent for said company unless such agent was duly authorized
and had a license to act forthe         fire insurance company. The
fact that the agent holds a life,         health, accident and disability
certificate       would not authorise him to act as the agent of the
fire insurance company. Tonold that the law does not prevent a
recording      fire insurance agent from accepting     fire insurance
business and paying a commission thereon to a life insurance agent
would permit the-life       insurance agent to evade the above mentioned
statutes and do indirectly        what he is prohibited    from doing directly.
As above stated the agent of the life insurance company cannot
legally     solicit   fire insurance business and receive a commission
thereon unless he is duly authorized by the Board and has a
Honorable Itiarvin Hall,   Page 5       0-1598A

license as such.    Therefore,  the life insurance agent could not
lawfully act as the agent of the fire insurance company without
the above mentioned license    and it would be unlawful for him to
receive a commission on fire insurance business.     It would natur-
ally follow that the recording fire insurance agent could not
accept fire insurance business and pay a commission thereon to
the life insurance agent, which the life insurance agent could
not legally receive.
Trusting that the foregoing     fully    clarifies     our recent   Opinion
NO. O-1598, we are
                                          Yours very     truly
                                    ATTORNEY
                                           GENXRAL
                                                 OF TEXAS

                                    BY          Ardell Williams
                                                Assistant
AW:EP:ml
APPROVED
       JUL. 8, 1940
   GLENNR. LEKCS
ACTINGATTORNEY
             GENERAL