Mr. William A. Harrison Opinion No. ww-362
Commissioner of Insurance
International Life Building Re: "Whether it is necessary to
Austin, Texas increase capital stock deposit
under Article 3.15, Texas In-
surance Code, when the actual
capital stock of a company is
increased by charter amend-
Dear Mr. Harrison: ment, and related questions."
We quote from your letter of December 16, 1957, requesting
the opinion of this department on the above stated question as follows:
"Assume that a company with $100,000 capital exer-
cises its option under Article 3.15, and voluntarily de-
posits with the treasurer securities in the amount of
$100,000, and subsequently the company amends its arti-
cles~of incorporation to increase its capital stock to
$250,000. We respectfully request your opinion as to
whether it is necessary for the company, having once
exercised its option and made the capital deposits called
for in Article 3.15, to make additional deposits with the
State Treasurer under Article 3.15 in an amount to the
increase of its capital.
"Assume that a company has a capital of $250,000 and
voluntarily makes a $250,000 capital deposit with the
State Treasury in accordance with Article 3.15. Subse-
quently, the company reduces its capital to $100,000. We
respectfully request your opinion as to whether the com-
pany could then withdraw from the State Treasury $150,000
of its capital deposit, without submitting in lieu there-
of other securities of a like class, or of an equal amount.
In other words, could the company then maintain only a
capital deposit of $100,000 rather than $250,000?
"In each of our first questions, assume that at the
time of increase or reduction in capital, the company had
outstanding liabilities to its policyholders in this state.
"If your answer to our first question is in the nega-
tive, we respectfully request your opinion as to whether a
company which had originally made a voluntary deposit and
fir.Wil~;iamA. Harrison, page 2 (~~-362)
subsequently increased its deposits at the xquest of thf
State %ard of Insurance, after it had increased its capi-