        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
