OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
Honorable 0. P. Lockhart, Chairmen
Board of Insurance Commissioners
Austin, Texas
Dear Sir:
e .the name %&tual*?
_
requesting the opin-
*tea question reads as
.thereof, this Board
onary power to re-
hority to do busimss.in Texas,
it a reneWa oertificate of
where such~~a.oompany may al-
cased In Texas whose name does
not oontain,the word 'mutual*.
"The argument has been presented to us that
since section 3 of the Act expressly and manda-
torily requires domestic companies to embrace the
Honorable 0. P. Lockhart, Chairman, Page 2
word %tutualW in their eorporate names, so as to
apprise the public unmistakably that it is a mu-
tual company; and section 13 of the Act, dealing
with the admission of foreign mutuals, employs
the language *Any such mutual Insurance company’,
etc., the language last quoted, especially the
word 9such’ , necessarily refers back to and em-
braces the earlier provisions of the Act applica-
ble to domestic companies, and thus evidences an
equally plain intent that the requirements of
section 3 shall be applied to foreign mutuals
under section 13; and that the A& should not
be construed as imposing upon foreign mutuals
less onerous provisions than upon domestic com-
panies, or according foreign mutuals privileges
which are expressly denied home companies.*
Article 4S6Oa-3 Vernon*8 Annotated Civil Statutes
provldes:~
“No name shall be adopted by such company (in)
which does not contain the~word *mutual*, or which
is so similar to any name already in use by any
such existing corporation, company or association,
organized or doing business in the United States,
as to be conf%sing or misleading.”
Article 4S60a-13 Vernon*s Annotated Civil Stat+:.--:
utes reads as r0ilows:
“Any such mutual insuranoe company organized
outside of this State and authorized to transact
the business of insurance on the mutual plan in
sny state, district or territory, shall be admit-
ted and licensed to transact the kinds of insur-
ante authorized by Its oharter or articles to the
extent and with the powers and privileges speoi-
fied in’this Act when it shall be. solvent under
this Aot and shall have complied with the follow-
ing re&ements:
e(a) Filed wlth the Board ot Insurance Commis-
sioners a copy of its by-laws certified to by its
Secretary;
Honorable 0. P. Lockhart, Chairman, Page 3
"(b) Filed with the said Board a certified
copy OS its charter or articles of incorporation;
e(a) Appointed the Chairman OS the said Board
its agent for the service of process, in any action,
suit or proceedings in any court of this State,
which authority shall continue as long as any lia-
bility shall remain outstanding in this State;
“(cl) Filed a financial statement under oath,
in such form as the Board may require, and have COIII-
plied with the other provisions of law applicable
to the filing of papers and furnishing information
by stock companies on application for authority to
transact the same kind of insurance;
‘e(e) Its name shall not be so s$milar to any
name already in use by any such existing corpora-
tion, canpany or association organized or licensed
In this State as to be conSusing or mis1eading.e
Generally speaking the State may Impose upon non-
resident insurance companies such conditions precedent as to
the right to do business in the State as are deemed proper.
It is stated in Texas Jurisprudence, Vol. 24, p. 1311:
” . The State may require the Siling of
a powe; & attorney authorizing service OS process
upon any agent, officer or representative of the
company, the procuring of a certificate from the
Insurance Commissioners, the Siling of a bond, and
the making of a special deposit as a trust fund
for the protection of obligations arising under
policies ~issued within, the State. The Legislature
also may limit the amount of any one risk, unless
the excess be reinsured in a solvent company do-
ing business in this State.
.*A foreign insurance company which has elect-
ed to.~do business in Texas is deemed to have con-
sented to be governed by the insurance laws of
Texas, irrespective of their constitutionality.
Such a corporation may not contest the validity
of Its contracts on the ground that it has not
complied with local laws.
.-.,
E+orrble O.:P. Lockhart, Chairman, Page 4
n a (Also see the case of Phllligs vs.
Perue,*2;9*S:~W. 849, and the case of Eagler vs.
Security hlutual Life Insurance Company, 244 Fed.
863).
Article 486Oa-3, supra, which requires that any
name adopted by such company must contain the word *mutual*
is applicable only to domestic corporations.
Article 486Oa-13, supra, sets forth the require-
ments and conditions which must be met by a company organ-
ized outside of this State to transact the business of in-
surance on the mutual plan in this State. Subsection (8) 9
of said statute speciSlcally refers to the name of such fori
eign corporation desiring to do business in this 'State as a
mutual company and does not specify that the name of the com-
pany shall containthe word emutual*. We do not think that
it was the intention of the Legislature that it was mandatory
for the company to contain the word *mutual* in Its name.
IS it had been the intention of the Legislature to require
that the word *mutual* nest be contained in the name of the
foreign corporation desiring a permit to do business in this
State it could have easily done so in clear and specific lan-
gua ge lIt is our opinion that when a foreign company oom-
plies with the provisions of Article 486Oa-13, supra, said
company shall be admitted and.licensed to transact the kind
of insurance authorized by its charter or articles to the
extent and within the powers and privileges specified In the
Act when it shall be solvent unde,r the dot, and as above stat-.
ed, as complied with the ~requlrements set forth. We, there-
Sore, respectfully answer the above stated questfon in the
negative.
Trusting that the foregoing Sully answers your in-
quiry, we are
Yoursverytruly
ATTCPd?WIGEWEFULOF'l!EXE~
APPROvPDJuL23,l942
Gerald C. Mann (a) BY
ATTORWEYGWhEfUL.OFTFXAS AwP~i~rliams
Assistant
AW:mp
APPFIOVED
OPINION
coIlamTEE
By B.W.B.
: CHAIW
Untitled Texas Attorney General Opinion
Combined Opinion