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