..
; Ilo. So78
#alaoplnlonholdmr
:Y
L That real emtatemy not oonstituts all QT y '
portion of the oapltalhook of a oasualty -
suraneeoompmy at the time or itr lnaorpor-
tion.
t
8. That no p&ton 0r the oipitP1otook0r a OQG
ualtyinsuranoeoozip5nymay be-lnvestted
in real
oathtoat any time aft0.2
the lnnoorporation
0r
the 0on;any.
5. That all or any potiionor the fmds of a stook
oasualtplnsuranoe oo;.pany,~
overand abovo its
oapltalstookmay be used for the purohaseof
a build- at leastampleand adequateior the
trnnoaotlon &the buslneseor the oasualtyln-
eurenneoompany,uhlohbulldingmay be uned in
whole or ln part for the aoomno&tion or s-h
+mrudty lneitanneooqnny in the transaotion
or Its business.
v
OTTSCEOT Tliii
ATTGRNEPOENLRAL
Iion.
a'alter
0. Woodward Chalrm.m
Board0r Innuranoecd~~ion~r
astin, Texas
bearsir: '_
oplnlonwo. O-958
_, Ret Insurmoe - Capitalatookor oaoualty
lnsurnaoeooApony- surplus- Invent-
aente- Real estate.
Tour requontror opinionupon the r0u0wing
questiona
"1. Lay rh.l o&ate oonotituto all or any
por$1011or the oapltalstock08 a oasualtyinsur-
anoe oo~penyat the tl.zqor its lnoorporatlon?
"3. In the eronttbnt the flret quo&ion
1s answeredln tho negativemay all or any part
or the oapltalstockor a oasualtpinswme ocm-
pany to be inveotodin r0cil estateat anYtlme
after the inoorporation
bf the oonpanp?
"3. Xny any part of the iundeof a stook
oasualty00 pany over and abovelto oa?ltalstook
be investedln real ostate?w
haa beon reoelvedby this depnrtknt.
. Tho ZegularSecnlonof the Borty-sixth Legisla-
tme paooedlic;leoBill :'o.928, w!vloh
1s an sot mendin;;
Artlole4705,xrtlole4706 and hrtiole4993,as wondad,
CUM re;~alin~Art10105001,a~ mendad, or the Rovisod
civilStatutoa0r Texae,1925. Said Rogee Bill no. 928,
Ho& Kalter6, Woodward,,me"#8
*upa, reads as r0rmmt
‘AN ACT awmQLPg ml010 4706, Art10104706,
and Artlob 4993 am unded, and repealing I\rtle
ale 3006 as amended,of the RotlsedClrilstat-
utea or T-8 of 1925,do8l&uatlngthe run& and
6eourltleeof whlohthe oapltalntook ot lns~r-
anoe oompanlesinoorporated under the pro~lslms
or Title 70, Chapter 8 of the EevleodClrilstat-
utoa or Texas,shalloonalat,dealgnatlng the ee-
ourltlesin whloh fundsof #uoh o~~.psnirm may be
inrented;provldlagoertaiaIlnritatlcma on the
amountof onpltal#took of guaaral.oaaualty oom-
par&~ end requiring deporitm to be trade by ruoh
oonpanles; an+ deolarlngan umrgenoy.
‘BE IT BWJXED BYTRE LPDISIATURE
mTlIX SPATEOr
TPASI
*SeotlaPL
1. That Artlole4706,Artlole4706,
and Artiole4993,aa amended,of the Ro~isodCltil
Statutesof Texas or 1966,be and the-@- are
hee;;yamndod, ao le to hereafterread as fol-
*&tlole 4705. Itomeor CapitalStook. The
oapltal hook or my such lasuranoe oonpaap, ex-
oept any writingLife,Bealthand AooldentIncur-
anoo, ahalloonsl&t
ll. In lawful money or the Unitedstates;
or
“3. In bonds or this 5tate or any oouaty
or inoorporated tuwa or city there&, or in
the nttuok of any nationalbanks or
"3. In rim upon uninoumbered
riortgagoe
reale&ate in thla &ate, tho titleto whloh
1s valid,and the marketYalueof whloh 18
not.leasthan forty (401 per oeat nor0 than
the amountloanedthereon. Ii any part of
the yalueof auohreal estate1s in buildings,
auoh building shallbe lneuredagainstloss
by ilre for not leasthan slxtp(60)per oent
or the ialuethereof,with 108s olauaepayable
to suoh oompany. Provided, that the prowl-
slmlror thle Itilole,with reepeotto the
Yalue of real *state,oonparod to the amount
loanedthorooa,shallnot applyto loanase-
ouredby real ertatowhioh are insuredby the
PoderalHoualngAdmlniatrator.
RArtlole4706.InYostnent or Funds. No oom-
pony, exoeptany wr:tlnSLllo,Healthand kool-
dent Xnsuranoe,organizedunder tho pro~lslons
or this Ohapter shallintestite fund6 OY(V and
abateit8 pal&up oapitalstookla any othercan-
ner than aa r0mwrt
*(a) In bondaof the Unitedstatesor or
any or the Stateaoi the UnitedStatenproYid-
ed sunh bonds, are, at the time of pWohaae,
Intnr~at-bearlog or not la drrauxt.
"(b Ia bond8 or rlrst lIear 01).
unineumbor-
ed rea eotato in this State or in any other
Sate, OoWtry or prorlaoeIn whloh suoh oom-
WY may be d&lloenaad to oonduotan tiaur-
MOO budneos, and provldlngln eanklnetanoe
such real ertateahall ba worth at leastforty
(40) per cent more than the mount loanedthtre-
The Yalueof ouoh real e&ate ahall be de-
%alnod by 'aYaluatlonmade under oath by two
(8) freeholder~ or the oomty whore the real
entatoIs looated,and ii the bulldlngaare ooa-
eldereda pert of the Yalue 0-ithe real eotate,
they must be insuredeGalnetlosrby rlre for
aot lea8 than sixty (60)per oeat oi the Yalue
~theraoi, with losr-payabkolauw to auoh oom-
WY*
*(o) In bondaor otherinterest-bearing evl-~
denoeof indobtodnoss oi mny oounty,Lnoorpor-
ate4 city town or aohoolor sanitaryor nav-
igation&trio4, la h narlgatlondtntrlotto
oontaIna populationof not loss thin three
hundredaad thousand(359,000) ao-
oordlng to the last reoedlngFederalCaneus,
ln this or any other StateIn wiiloh said oom-
pany nay be duly lloeasod to nonduotan laser-
anoe buslaere, If suohevldonoeo or Indebtednear
arm issuedby authorityor lnw and St interest
u&m then has never been deiaulted.
"(4) In the stooksor bondsor otherool-
donoes of Indebtednessof any solYen dlvldenll-
'payingoorporatlonlnoorporatedunderthe lawa
of this State,or or the UnitedStates,or of
any State,oountry, or provlnoeIn whioh suoh
ootlpmymny bo duly lloeaaedto oonduotan la-
8uranoebualno8a.
*(e) In loansugon the pledgeor any mortgage,
hook, OT boa&, Or OtherCYideIiOO Of LndobtOd-
nesa,aooeptabloas Investmenta underthe terms
or this law ii the ourrent valueor suohizortgage,
atook,bonds or other twldezioe of Indobtednerr
1s at leant 4wwsaty-tire (25) per oent more than
tha amount loanedthereon.
a(i)That the restrlotlone oontainedIn
subscotlon(b) hereofthat mob real estate
shallbe worthnot lean than forty (40)per
oent of the aaouatloanedthereon,and that
the Yalue of suoh real estateshallbe doterra-
lnod by a Yaluatlonfnade underoath by two
(3) treeholders oitha oountywherethe real
eetato 1s loonted and ii bulldin&s ax0 oonsld-
ore4 aa a part oftho Yalueof rruoh real es-
tate they must be insured for the benefitof
the4mortgagee,shallnot applyto loanascow-
06 by real estateIn Texaswhloh are insured
by the Pederal Hoorulng hdmlnlatrator.
notenor bon& or
g(g) ;Thinterest-bearing
Eon* Walter 00 ‘loodwara, pa&a $4
the Vslvsrsltyof Tsms lsausdundersnd by tic-
tue of OhapterCO, Aote or the Party-thirdU@’
lalaturo, SeoondCal&d &melon.
%WtSole COOS. Capitaland Depoolts. Oaly
oompanlea ormlabd a@ dola buslneaaandor the
prorlslam oi thla Ohapter sL IJ.be subjeotto
its praplslcms.Suoh:oonpany shallhare not lose.’
than One EhndreQThougand ($100,000) Dollars oi
Oapltal stooksuboorli?od, paid in, la oash, wlth
an adaltIonai PlftyThousshdDollars .(@jO,oOO)
02 oapltalstooksubsorlbod and fully paid In,
%n oash,for every kind ot lnsuranoe Iborotban
oae whloh It 1s authorizedto tramaot. Suoh
oompanleawith Two HundredThousand($200,000)
Dollars of oapltal&took subsorlbed and fully
paid ln, Ia sash,shallbe authorized to trano-
aot all and Avery kind or Inauraaoespeolrled
in’thefirstArtloleof thls Chapter;all of the
UnitedStates, or of this State,or of shy ooun-
ty or Iranlolpality of this State,or ti notes
or bondaaeourodby moitgaeeor trust deed In-
~. sure4by the ?edoralEouslngAddniat#AtOr, or
in bonds or flrat liens upon unlnoumberodreal
o&ate la this State,or In any otherStateln
whloh suoh oompargmay prevloualy have been ll-
oeasedto omduot an Inauranoebuslnoss:In
eitherInatanoe,suohreal estate s&illbe wrrth
not lssa~thaaiorty (40)per oentmore than ths
amountloanedthereon. If any part of the value
or suahreal lstats1s In bulldings suoh build-
izigS~&hall be i.W3uOd a hst lOBa by rlr5 ro2
not le.esathan sixty (80$ par sent of tho value
thereof,wlth,losa-payable olauaoto the ocmgany.
The value or euoh real estateshallbe detarmln-
od by a swornvaluation mads by two freeholders
of the oounty whore the roal ostateIs situated,
Provide4that suoh reatrlotlon shallnot apply
to mortgapoainruredby the FederalHousingAb-
tr.l&etrator. Upon suoh oompsnpfurnishing evl-
denoe satlsinotorto the Coanisslonor that the
‘oapltalstook as h: orolnpresorlbod has been all
subsorlbed and pald up in oasb ln Sood faith,
and that rush oaplta$stookhas bem lnvonted
as hereinproscribed, and upon the depositof
the sum or yl’itty Thousand($60,000) Dollarsor
auah soourltlea ‘or in sashwith the StatsTreas-
urer,than mid Commlssloner shalllssuoto said
oompany. a oertlrloate authorizing it to 40 bus-
lnesa. NO part or ths oa,7ltal paid ln shall
be loanedto say of’flosr or eald oompany. Tn
..t.heeventany suoh oon,my shall be requiredby
ths law or any otherState,oountry or pro~laoe
as a requirement priorto doingan lnsuranoe
businessthsrelato depositwith the duly ap-
pointedorilooror suoh otherStats,oountry, .’
or provlnoe,or rlth the stateTreasurerof
this state,any ~eourltles or cash In exoena0r
the said deposit oi JiftyThousand($50,000)
Dollarsherelnbeiore msatloned,suoh oompany,
at it8 AIsorotlonmay depositwith thr State
Treasurerseourltjesor ths oharaoterauthoriz-
ld by this law, or oash suriloloat to eaable it
.,.._;:_
.(,
xwi yltsr CI Yooaw4rd,page #a :
to Awt 4Wh requirements.Thi StateTreaaursg
is herebymthorlzea ana aireoteato ~UO~YO SU&
~.
a OP Odt
4 Jia
tfJ
h OId
itl~OiWf~Oi$fto? th0 prOtOO-
tion of iu po1icyhol4erriOf ths oanpany; Any
depositsso mtideto meet the raquiramente or any
otherStat.,oouatry,or provlnoeshallnot be
Wlthdmwn bythe.ocmjmafoxoe~tupcm flllngwith
the4Comdesloner0via eim latisfnotorytobin
thnt the oosipany
baa with4rawnfron budnoc~s,sn4
has ao unsoouredliabl~ltieo outstanti in app
suoh othersttite,~oouptry,or provincefp vhloh
suoh l44ltiaial4epositwas requirea,ana upon
the fllln&of auoh Svldenoethe ooqany may nlth-
draw wh 844ltlonaldepositat any time.
'980.e. Art10108006. Thlm ml010 is hersby
expresslyrepealed.*
mtlole 5007,Revi8eacivilStatutisof Texas,
roaam a4 r0iiowa:
“No.suohooz~panyshallbe permitted-to purohase,
.h0iaor conveyreal estate,exocpt rorthe pur-
pose and in the m.anorhereinset forth:
'1. For the eraotlonan4 malntananoe
of bulla-
lngs at leastamplenna adoqwto iortho trnns-
aotlm or tls own business,
.'.
'8. suoh 40 shallhero beenmortSnSe4to,lt
ln gaod faithfor rroneydue.
"3. Suoh as shallhave been convey84to it in
the rntlsfaotlon of debtspreviously oostraotab
ln the oourseot lto dealingsandwhioh mat be
taken in by the oom)anyoa aooount of the debt.:
aooureaby auohmmQage.
"4. Such 4~ shallhave born purohaaednt aale?
‘upon judgments,deoressor mortgagesobtained
or ma4e for suoh debts. No owpany lnoorpomt-
04 as aforesaid shallpurohaso,hold or oonvep
;,“.i:fte in any otheroasesor ror 4ny other
Art10105008,RevisedCivilStntuteaor Texas,
row33 as r0xh4:
_*
wA3.l real estatea0 acquired,exocpt48 16 oo-
ouple6by bulldingsuse4 in whole or ln partior
the.acoommIatlon ai auoh oorqanleoin the trans-
aotioaof lts business shall,exoeptas hsreln-
srtsrprid0a. be sod an4 ai4p0seaor wfthln
ton year4 arterauoh oompanyshallhave acquired
; titleto the same, No suohoompanyshallhive
suoh real eatate for a longerperiodthan that
aboveffientloiied,
unlessthe 84ia oclcpanyshall
procures oertlflonte fron the Commissionerthat
the intercotsof the companywill sufferIcater-
lallyby 4 toroe sale or suoh real e&ate, in
whloh eventthe tlms ior the sale may be ostenb-
04 t0 SUOh tlm4 48 the C~W~WO? Shau QireOt
in said 00ctiri04tor*
80th VatOr th,wOodWUa, pagb 46
we have been krromea by the Boar40r xm.r4noe
oi Texanthat all oasualtyinsuranoooom-
Commissioners
pmle8 aowoperatlng in Texoe were orente4 under the
proilsloasor what 1s now maptierLB, Tltle~TBor the
RevlsodOlvll statutesof ‘24x44.Therefore,we mswor
your qWstiOn8, insofar4s they applyto casualtylnsur-
anoe ooqan.lesorgedzea unaim Oheiptor 28, Title78 0r J
the Revisoacivil3tatuteeor Texas,as it would servo
no prnotloalpurpose to dleoua6any questfonwhfohmight
arisewith roierrnoe to a oasualtyoonpanyurhlohmight
have been organized un4erChapter8 of Title78 of the
Revleea ~irii statutecr 0r ~-4,
The languageof the daptlonof Xouse Bllixor
988 of the Foxliy-sixthLegislature
spsoliioslly lfmlts
the applloatlon of amendo Artloles4705 an4 4706 or the
ReviseacivilStatutes to oasualtyoompanicsand other
name4insuranooo0pIpnnfe.ooroatodUnOer Ohaptera, Title
76, ReVlse4clvllStatutsrof Texas. The oaptloa-d&es
sbowsan lntontlonto limitthe apglloatlon or anenEe4
Artiol.44993 to oasunltyinswanoe 001+438 0r04teaun-
Car Chapter18, Title 78 Revise4Clvll3tatutesor Tex-
as* Thesearticlesappl~sb,roopectlvely; to sala oom-.
panleo prior to the pas-0 0r House 811lN0. 928, eupra,
an&this blll showsno lntontfoato &age the typeq or
ooropaaleswhlohoaoh oontrol.
Wo, therefore,
oonoludet&it hrtlole84705 ad
47d6 ot the ReviledCivilStattiesot Tcxas,'4onot ap/
ply to oaswlty itm8r4404~oompaniesorgnnizoaunder
Chapter28, Tltl.78 of the Revised01~11statutoo of
TWSa
irtlole4993 RevisedCivilStatute8 48 nmonb-
04 by saidEouee Blli No. 928, relatesto ani oontrols
oaswlty insurnnoeoompanlesoroateaunUerthe provlslcn
of what 1s now Ghapterl.B,Title 70 or the RevisedClvll
Statutesof Texar. Thls nrtloleprereaoribed the typo of
eeaurltyin wtiohthe oayltal stook of suohoasunltyin-
4ur4.404oonpaniermay be investo4. The outrightpurohase
of real estateis not lnoludodin the list of approved
seourltles.& our opinion,thls etatutelo a oontinu-
lng 1imitatZon upon the pow= to investoapltalstook
an4 prohibitsthe lmestmat of.suohfundsin any other
assetsthan thosenaned therein,not only at the tlw
of lnoorporatlon, but at all tlmoathereafter.
Wo, therefor nnswer your firstan4 seoona
questionsas 4p ii4a to oasualtylnmannoe 00~1 nle8 /
tle 78, Chapter lE,.oithe Rovi?
oreatadunder Cf: on4 Clv-
11 statutesof Texas in the negative.
Prior to its repealby the last scsslonoi the
Loslglature through saidRouse Bill No, 92f3,
Artfale
5:‘06, RevisedCl011Btatutos,1925,presorlbed the man-
nor of lnvestmentaover an4 above the capitalstookor
4 oasualtylneuranoeooapaqpmento under the provl-
slonsor Ohapterl.8,Title IO, Revised01~113tatutos
or Texas. ThO offsot @i the repealof this artiole16
to reaove the llmltatlon plaoedupon the lmestmnt of
all run48oisuoh oompanies, siooptthe onpltalstook,
ana Lear0the aiaor0ti0nor makingsuoh lnvestnent.ln
-
i
&II. Walter0, w00qwua, pale 87
the hands or thr Board or Mreotora of the oorp0r4tlon
abjeot tb thr li.mitati044
or Artlo* 8007 Ma 6008,
mifbea civilStatute8or Tsxas. : .
In answer to your thirdqwitlon, you are re- ..
a&lead that it 18 the oplnlonor this Cuppart-
8pootful.l.y
ment,that all or a portla~of the fundsof a stookone-
ualtyinsursnoeooapsny,over an4 aboveits oapltalatook
my k, used ror tha ereotlon.%a naintenanoe of a bulla-/
%nS at leastampie ma adequateior the trammotionof
the buslmss of theoasualtpinsuranoeoocpany. Suoh
bull4ing mst 0s wad in whole or in psrt for the aoocai-
modetim or swh oompqy in the transaotlcn or the bud-
ness or thn ompany.
You are‘iurtherrespeotf'ully nCvlseCth4tit is
the’oplnion of this Cepaa%aont~thnt
4 aaeualtylnsuranoo
ooqany 1s permltteaunder the law sad underNtlole
5007 of the Revise401~11Statutesof Texas,to 4OqUlre.
an4 holC~rsalestute undersootlons2,3 sn4 4 of nrtl-
ale 6007,but that under Artlole5008,Revlse4~Olvll
Statutesor Texna,411 real estateso 47quire4,except
as ls’ooouple4 by the buildingused la #huls or in part
ror the aooomodatlonor such oompanykr the txansaoti0n
of the businessof the o~nrpany, shouldbe 4014end Cla-
pose4oi within10 yearsaftersuoh oompnny shouldhave
aoqulrebtitle to the ssme,~1168sthe oarmanyshould
440~~0a aertlilonte rromthe Comleslonsrthat the in-
terost or the o~mpany would sufferourterlally by a foroed
sale or euohreal estate,ln whioh nvent,time for the
sale plight be extendedto EmOhtim 4s the OcinmiMlonnr
‘shoul4Cireotin ml4 petltlon.
“TEWla&thnt this anmwersYour 5.nqui.W.
*a U.
Touravery truly
ATTORNEY OINXRAL OF TEXAS
~~~iZ=ZL-
WaJFrob is.istpbt
This opinionhas been oonal&red ln OO$WMOO,
approveaand ordered rooor404.
OERALB
c. NANN ..
Attorney Oeneral or Texar