Court Opinion

ID: 4137783
Source: CourtListenerOpinion
Date Created: 2017-02-18 02:28:53.698384+00
Date Added: 2024-06-11T14:36:24.717186
License: Public Domain

AUSTIN.   TEXAS

                January 25, 1950

Ron. George B. Butler, Chairman
Board of Insurance Commissioners
Austin, Texas               Opinion Bo. V-989
                           Re: The authority of a life
                               insurance company,which
                               owns home office prop-
                               ertiea in another state,
                               to own real estate for
Dear Sir:                      a branch office in Texas.
          Your request for an opinion presents the ques-
tion of whether a life insurance company organised under
the laws of another state in which it has its home of-
fice and in which it owns home office properties,but
licensed to transact business in Texas, may own an of-
fice building in Texas for use in connectionwith the
transactionof its business in this State.
         In your opinion request you advised of the
following:
          "The Washington Rational Insurance Com-
     pany is an Illinois life, health and accident
     company with its home offices in Chicago and
     its executive offices in Evanston, Illinois.
     It is presently licensed to do business in
     Texas and has been so licensed for a number
     of years. It owns home office propertiesin
     Evanston in which its principal records are
     located and from which its principal business
     is transacted.
          "It has recently purchased a vacant lot
     in Houston, Texas, on which it has erected a
     one-story brick building which is used ex-
     clusivelyas a branch office for the trans-
     action of such of its business as is neces-
     sary for that area. ...
          "Please advise me whether Washington Na-
     tional Insurance Company is authorizedto own
Hon. George B. Butler; Page 2   (V-989)

    and hold real estate under discuaaion
    for the purposes abeve outlined."
          In studying this question we have carefully
consideredthe view of the Board,of,InauranceCommia-
aioners as presented in your opinion request, briefs
submittedby interested parties, AndyAttorney General's
Opinions Nos. O-5823, O-1470, O-4556, O-4587; 0-4587-A,
o-5250, and 0-5250-A. by,previousadministrations.
         Article 4726, V.C.S., provides in part:
         "Every such insurance company may
    secure, hold and convey real property only
    for the following purposes and in the fol-
    lowing manner:
         w(1) One building site and office
    building for its accommodationsin the
    transactionof its business and for lease,
    and rental; a .,. Provided, that an aci
    quisition of such an office building on
    leased ground shall be approved by the
    Board of Insurance Commissionersof the
    State of Texas before such investment."
          Does this article impliedly prohibit a foreign
insurance company which owns office properties in an-
other state from owning an office building in Texas? We
think not. Any implicationto that effect found in Ar-
ticle 4726 is overcome by Articles 4765 and 4766, V.C.S,
          Article 4765, V,C.S., reads as follows:
          "Each life insurance company now en-
     gaged, or that may hereafter engage in trans-
     acting the business of life insurance in
     this State, shall, as a condition of its
     right to transact such business in this State,
     invest and keep invested in Texas securities
     and in Texas real estate as hereinafterpro-
     videa, a sum of money equal to at least
     seventy-fiveper cent of the aggregate a-
     mount of the legal reserve required by the
     laws of the State of its domicile, e0en
     (Emphasisours).
          Article 4766, as amended, Acts 5lst Leg., B.S.
1949, Chapter 438, p. 813, provides, in part, as follows:
Hon. George B. Butler, Page 3   (V-989)

              The investmentsrequired by this
    Chapt~;*~aybe made by the purchase of not
    more than one building site, and in the erec-
    tion thereon of not more than one office
    building, or in the purchase,at its reaaon-
    able market value, of such office building
    already constructedand the ground upon
    which the same is located in any city of
    the State of more than four thousand (4000)
    inhabitants...."
          We are of the opinion that Article 4766, when
read with Article 4765, expressly authoriaes a foreign
insurance company to own one office building in this
State, even though it may own home office properties in
another state. We do not believe that it was the inten-
tion of the Legislature in enacting Article 4766 to give
permlasion to own one office building to a foreign in-
surance company only when it did not own a home office
bui,lding,since many if not moat fore1 insurance com-
panies would be expected to own home orfice buildings
in the state where their home offices are located.
          In further support of our opinion, we invite
your attention to Article 4762, V.C.S., which provides:
          "The assets of any company not organ-
     ized under the laws of this State shall be
     invested in securitiesor property of the
     same classes permitted by the laws of this
     State as to home companies or by other laws
     of this State in other securitiesapproved
     by the Commissioneras being substantially
     the same grade."
          The above quoted Article was referred to in
Attorney Generalvs Opinion O-5823 in which it was said:
          "It is our opinion, therefore, that any
     foreign insurance company authorined to trana-
     act in this state any or all kinds of inaur-
     ante above named under the proviaionaof Chap-
     ter 3, Title 78, (Articles4716-476&b)is au-
     thorised to own real estate in this State as
     authorisedby Article 4726, Et-t-          must
     also be alienated as provided thereby." (Em-
     phasis ours).
Hen, George B, Butler, Page 4 (V-989)

          The opinion quoted above points out that
foreign insurance companies authorizedto transact
business in Texaa,have the same privileges in Texas
as domestic insurance companies. Accordingly,we
think any foreign insurance company may own in Texas
one office building as permitted to domestic com-
panies under Article 4726. We are also of the opin-
ion, as indicated above, that Article 4766 expressly
authorizes out-of-stateinsurance companies to own
one office building in Texas,
                      SUMMARY
         A foreign insurance company licensed
    to do business in Texas may own one office
    building for use in connectionwith its busi-
    ness transactionsin this area, even though
    such insurance company owns home office
    properties in another state.
APPROVED:                       Yours very truly,
Ned McDaniel                      PRICE DANIEL
State Affairs Division          Attorney General
Charles D. Mathews
Executive Assistant
                                By5fe
                                     Assistant