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                     THE   ATTORNEY         GENEBAI.
                               OFTEXAS
                              AUS-    SS.TEXAS
      GROVER SELLERS
     A'TTORNEY GENERAL




         Honorable George B. Butler, Chairman
         Board of Insurance Commlssloners
         Austin, Texas
         Dear Sir:               Opinion No. O-6996
                                 Re: Is a foreign mutual assessment life
                                      insurance company authorized to-do
                                      business in Texas under the provi-
                                      sions of Chapter 5, Title 78, Revised
                                      Civil Statutes of Texas, 1925, and
                                      which has reorganized according to
                                      law, liable for gross premium rece-
                                      ipts tax collected from Texas
                                      assessment policies for each year
                                      after its withdrawal from the state,
                                      and related questions?

         _    , We. are
                    .   in receipt
                                 . of your request for an opinion of this
         department in answer to two questions based upon the followi~ng
         factual situation:
                  "National Aid Association was Incorporated in
             Oklahoma in 1929, es a stipulated premium assessment
                      . It was licensed in Texas under Chapter 5
             ;%.8e"T8,  in March 1929, before the repeal of Chapier
             5 in the same year. Later it reorganized end became
             incorporated as a legal reserve life lnsurence company
             under the laws of Oklahoma in June, 1941, and wes pro-
             perly licensed in this State annually thereafter
             until it voluntarily withdrew from Texas as of August
             1, 1942.   Up to that time it had written a comparatively
             small volume of legal reserve policies in Texas, and it
             has continuously collected premiums both on the poll-
             ties written during its admission under Chapter 5
             end on the legal reserve policies written after its
             reorganization.
                 "Reserve Loan Life Insurance Company of Dallas,
             Texas, is taking over the assets and assuming the
             liabilities of National Aid Life Insurance Company."
                 Your first question is a3 follows:
                 "We assume that National Ald Life Insurance
                                                                   .   -.




Hon. George B. Butler, page 2             o-6996


    Company owes taxes under articles 4769 end 4772
    for renewal premiums, collected on its legal reserve
    policies from citizens of Texas for each year since
    its withdrawal from the State. Please confirm or
    correct me as to this."
        Our Opinion No. o-5438, addressed to the Honorable O.P.
Lockhart, Chairman, Board of Insurance Commissioners end dated
September 21, 1943, fully answers this question and your essump-
tlon that the National Aid Life Insurance Company owes taxes
under Articles 4769 and 4772 for renewal premiums collected on
its legal reserve policies from citizens of Texas each year
since its withdrawal from the state as of August 1, 1942, is
correct. A copy of this opinion Is attached.
        Under our Opinion No. o-3196, addressed to the Board of
Insurance Commissioners and approved October 17, 1941, a copy of
which is atteched, the Reserve Loan Life Insurance Company of
Dallas, Texas, as the successor to the National Aid Life Insur-
ance Company of Oklahoma, would also be liable for the taxes
previously owed by the latter company, as well es for all taxes
on premiums collected on legal reserve policies from citizens
of Texas after the date of the~assumption by it of the liabilities
of the Nati~onalAid Life Insurance Company.
        Your second question Is as follows:
        "Please advise me whether National Aid Life
    Insurance Company, or its successor, Reserve Loan
    Life Insurance Company of Dallas, Texas,  is liable
    to the State of Texas under article 4782-c, or any
    other article, for premiums collected from its
    Texas assessment policies for each year after its
    withdrawel on August 1, 1942."
        Article   4782-c,   V.A.C.S., 1925, as amended, is as follows:
        "Taxation of premium receipts of foreign
    assessment life end casualty companies on reorgani-
    zation or amendment of cha,rter.
        "That if any foreign assessment life or casualty
    company now licensed to do business in this State un-
    der the provisions of Chapter V, Title 78, Revised
    Civil Statutes of Texas, 1925, as emended by Senate
    Bill No. 37, Chapter 40, Acts of 1929, First Called
    Session, Forty-first Legislature, as amended by Senate
    Bill No. 106, Chapter 60, Acts of 1929, Second Called
    Session, Forty-first Legislature, shall hereafter re-
    organize, amend its charter or otherwise change its
Hon. George B. Butler, page 3          o-6996


    plan of operation so that it shall no longer be sub-
    ject to the provisions of said Chapter and other
    laws than applicable to such companies, It shall there-
    after, es to all uolicies written before such change,
    be governed and taxed as provided by the particular
    laws under which lt operated and wes taxed at the time
    of such change, but as to all policies thereafter written
    It shall be governed and taxed under the laws to which
    it has then become subject by such than e. Acts 1939,
    46th Leg., p. 424, @l.' (Emphasis oursk
        It will be noted from the emphasized portion of the fore-
going Article that the reorganized company shall "Thereafter, as
to all policies written before such change, be governed and taxed
es provided by the particular laws under which it operated and
was taxed at the time of such change" and,,therefore, National
Aid Life Insurance Company would be liable for the one (1) per-
cent gross premium receipts tax provided for by Section 2 of
Article 4782, V.A.C.S., 1925, as amended on all premiums and/or
assessments collected from Texas policyholders on all umtual
assessment policies issued prior to June, 1941, being the date
of its reorganization and conversion into a legal reserve life
insurance company under the laws of Oklahoma. This liability
is imposed by the provisions of Article 4782-c, above referred
to, when construed with the provisions of Article 4772, R.C.S.,
1925.
        Since the Reserve Loan Life Insurance'Company, as
successor to National Aid Life Insurance Company, assumes the
liabilities of the latter company, it will be liable for all
taxes due and owing by the latter company under Article 4782-c
up to the date of the assumption of the liabilities end will in
the future be liable for the taxes on the premiums and/or
assessments to be collected.
                                   Very truly yours,
                                ATTORNEY GENERAL OF TEXAS

CKR:vwb:wc                         By s/C.K.  Richards
                                         C.K. Richards
APPROVED JAN 11, 1946                    Assistant
s/C,rlos C. Ashley
FIRST ASSISTANT
ATTORNEY GENERAL
Approved Opinion Committee By s/BWB Chairman
