Case Information
*1 ki%TOIRn’EY GENERAL THE OF TEXAS AUSTIS IX. TEXAR
GERALD C. i%ANN X--XXXXXX
*TrGRSRI- GIESmxaAL
Honorable Marvin Hall, Commissioner
Board of Insurance Commissioners
Austin, Texas
Dear Sir: Attention : Mr. Girard Kinney
i$nion No. 0-159l3A : Does the law prevent a recording insurance agent from accept- ing fire insurance business and paying a commission thereon to a insurance agent? Your recent O-159$ has been received. letter requesting a reconsideration of our Opinion No. vie quote from your letter as follows:
"In an opinion received from your office on November 6, 1939, this office was advised that the license issued by'the Life Insurance Department of the Board of Insurance Commissioners would not authorize the agent holding such a license to act also as an agent, as that term is defined in 505b, su ra for fire or casualty insurance companies. On Nay R, E946, we rece'ived from one of the recording agents licensed by this Departmmt copy of a letter addressed to IW. Fanning of the Attorney b eneral's office which stated as follows: "Under date of November 6, 1939 you addressed an opinion to the Fire Insurance Commission, c/o Ivir. Girard Kinney, dealing with the subject of whether or not a life in- surance license permitted a solicitor to accept commis - sions on fire insurance. This opinion is quite comprehen- sive, and while the law is somewhat ambiguous on the point, we are inclined to agree with you that it was at least the implied intent to make it necessary for a life to also take out an additional if he desired to solicit fire and allied forms of insurance. "However, I believe you will agree that it would have been just as easy for you to have rendered an opposite opinion depending on the manner in which you desired to construe the law. *2 . .
Honorable Marvin Hall, Page 2 o-1598A "'Nevertheless, the question which we had up with the Fire Insurance Commissioner really was not %Vould a life have a right to solicit and receive
a commission on fire insurance' but 'Does the law pre-
vent recording insurance business and paying a commission thereon
to a life insurance agent.'
"'The only thing we can find on this in the statutes is Article 5060 captioned ~Commiseion to Non-residents.' This article prohibits the payment of commieeion on Texas business to a non-resident of Texas and then goes on to say 'or to any person or persons, agent, firm, or corpor- ation not duly licensed by the Commissioner of Insurance of this State as a fire, fire and g,ara, marine, tornado, liability, casualty, health, elevator, rent accident, disability, plate glass, burglary, bonding, title, surety or fidelity insurance agent.'
trtYou will note that mention is made of accident, health and disability insurance although no mention is made of life insurance. Now then, every life insurance agent's reads in heavy type across the top of the certi- 'Life, Health, Accident and Dieability.~ So it ficate, would seem that the law specifically provides that a duly licensed insurance agent may perfectly legal1 and properly pay a commission to an agent who holds a Y icenee from the Board of Insurance Commissioners to write acci- dent, health and dieability the same license ineurancej and the fact that includes insurance would seem to have no bearing.
We would appreciate very much your opinion on this angle.' "Your opinion of November 6, appears wholly logical to this Department; however, in view of the doubt expreseed by Mr. Larkin, recording agent, Houston, we request that your office reconsider the above numbered opin1on.e
Our Opinion No. O-1598, was in response to your question which reads as follows:
"Does the license issued by the Life Insurance Department of the Board of Insurance Commissioners, and held by a life in- surance agent authorize that agent to accept a commission afire or casua ty insurance business when such agent does not i
hold a recording or soliciting ageete license as prescribed by law under Article 5062a, Vernon's Annotated Civil, Statutes?" *3 .
Honorable Marvin Hall, Page 3 o-1598A
In answer to the above question it was held in our original Opinion No. 0-159S that “you are therefore respectfully advised that Is the opinion of this department .that the license issued it by the life Insurance Department, of the Board of Insurance Com- missioners, would not authorize theagent holding such license to also act as agent as that term is defined in Article 5056, eupra, for fire or caeua ty insurance companies. Accordingly, i under the facts as set out in your letter, we answer your question in the negative.”
you state in your letter above quoted that the question was not Would a life have a right to solicit ore receive a commission on fire insurancee but, “Does the law pre- vent a recording insurance business and paying a commieeion thereon to a life insurance agent,” It appears to us that the twoquestions are identical in effect and that the same answer would naturally apply to oothqueetione.
Article 5060, Vernon’s Annotated Civil Statutes, reads as follows:
“Any person, agent, firm or corporation licensed by the Com- missioner to act as a fire and marine, marine, tornado, rent accident, casualty, liability, health, elevator, diezbility, plate glass, burglary, bonding., title, surety, or fidelity insurance agent in the State of Texas, is hereby prohibited from aying directly or indirectly, any commieeion, brokerage or, ot f: er veluaole consideration on account of any policy or pollcles covering property, pereon.or persons in this State, to any peraon, persons, agent firm or corporation that is a non-resident of this State, or to any peraon or persons, agent, firm or corporation not duly licensed by the Commie- eioner of Insurance in this State, as a fire account, and marine, marine, tornado, rent accident, casuality, lia- bility, health, elevator, disability, plate glass, burglary, bonding, title, surety or fidelity insurance agent .” 572, Vernon’s Annotated Penal Code, makes it a penal of- Article fense for any individual to solicit insurance in behalf of any insurance company without certificate of authority to act as or after such certificate of agent or solicitor for such corn any, authority shall have been capce E led or revoked.
Article 5055, Vernon78 Annotated Civil Statutes, rovides that sit shall not be lawful for any person to act wit R in this State as agent, or otherwise, in eoliciting or receiving applications for insurance of any kind whatever, or in any manner to a id in the transaction of the business of any insurance company incorporated in this State or out of it, without first procuring a certificate of authority &om the Commieeioner.w
Honorable Marvin Hall, Page 4 o-159SA
Article 5056, Vernon~e Annotated Civil Statutes, defines who are insurance agents, which definition would include anyone bringing fire or casualty insurance business into the office of a licensed fire and aaeualty recording agent, upon which he accepts commis- sions.
Article 5062a, Vernon’s Annotated Civil Statutes, regulates the licensing of recording agents and eolicitore to represent insurance companies; such Article reads, in part, as follows:
“No provision of this act shall apply to the life insurance business or the life department of the companies engaged therein....”
In 1933, there was enacted by the 43rd Legislature what is now Article 506&b, Vernon’8 Annotated Civil Statutes, which, among other things, regulated the licensing of agents of life insurance companies, accident insurance companies, etc. It is eignificant that at the time of the enactment of this statute regulating the licensing of life insurance agents, there had already been enacted the above statute regulating licensing of insurance agents other than those pertaining to the life insurance business.
As stated in our original Opinion No. 0-159s that “these statutes evidence a clear legislative intent to require 00th the licensing of life insurance agents and fire and casualty company agents.” 'F Article 50bLa, 8upra, specifically excepts insurance agents Article 506lio, supra, by its terms applies from its operation.
only to van agent for a life insurance company, accident insurance company, life and accident, health and accident, or life, health and accident insurance company or association, or organieation, , or state wide mutual aeeociatione local mutual ai.d association soliciting or writing insurance in the state of Texas, as the term agent is elsewhere defined in the law.”
Under the above mentioned statutes any person soliciting fire insurance and receiving a commission thereon would be an agent of the fire insurance company and would not Abe authorised to act as an agent for said company unless such agent was duly authorized and had to act forthe fire insurance company. The fact that the agent holds a life, health, accident and disability certificate would not authorise him to act as the agent of the fire insurance company. Tonold that the law does not prevent a recording insurance business and paying a commission thereon to a life insurance agent would permit the-life insurance agent to evade the above mentioned statutes and do indirectly what he is prohibited from doing directly. As above stated the agent of the life insurance company cannot legally solicit insurance business and receive a commission thereon unless he is duly authorized by the Board and has a *5 Honorable Itiarvin Hall, Page 5 0-1598A
license as such. Therefore, the life insurance agent could not lawfully act as the agent of the fire insurance company without the above mentioned license and it would be unlawful for him to receive a commission on fire insurance business. It would natur- ally follow that the recording insurance agent could not accept insurance business and pay a commission thereon to the life insurance agent, which the life insurance agent could not legally receive.
Trusting that the foregoing fully clarifies our recent Opinion NO. O-1598, we are
Yours very truly ATTORNEY GENXRAL OF TEXAS Ardell Williams Assistant BY AW:EP:ml
APPROVED JUL. 8, 1940
GLENN R. LEKCS
ACTING ATTORNEY GENERAL