The opinion
Honorable William A. Harrison Opinion No. ini-656
Commissioner of Insurance
State Board of Insurance Re: Whether Article
Austin 14, Texas 21.11, Texas Insurance
Code, the Non-Resident
Agent's Licensing Law,
is applicable to persons
Dear Mr. Harrison: residing in Puerto Rico
You request a:; opinion "as to whether the word 'State'
as used in Article 21.11, limits ;:?e p;'o‘:i,i.ons of such statute
to 'c"e o.:;qer48 states of the u~litsaj~~;ates, or whether j.t
extends -to territories, provinces and commonwealths and in
particular Puerto Rico?"
The non-resident agent's licensing law found in Article
21.11, Texas Insurance Code, provides:
"Upon application, in s,uch form as the
Board of Insurance Commissioners may require,
a non-resident of this State who is duly licensed
to transact insurance other than life under the
laws of the State wherein such applicant resides,
if such State does not prohibit residents of this
State from acting as insurance agent therein, the
Board of Insurance Commissioners may issue to such
applicant a Non-Resident Agent's license."
This provision became part of Article 21.11 by amendment in 1955,
Acts 54th Leg., 1955, p. 604, ch. 210, gl.
It is not a novel definition of the word "State" to
define it generally so as to include territories, provinces and
commonwealths of the United S'ca.tesi~fthe purposes and intent
of a oarticular statute indica%e ~Z1a.Lsuch a definition was
intended. Talbott v. Sil-der Bow County, 139 U.S. 438 (1891),
was a case 'nvolving an attempt by Montana territory to tax
shares of stock owned by an individual in a national bank lo-
cated within the territory. Congress had passed a statute
granting permission for States to tax shares of stock as the
territory had attempted to do in this case. The contention was
made that the consent was giv~en only to States as such and did
not extend to territories. The Court, basing its decision on
Honorable William A. Harrison,Page 2. (w-656)
the purpose of the law and the intent of Congress, held that
the word "State" should be defined generally so as to include
territories. In reaching this conclusion, the Court said.at
page 444:
"Still further, while the word State is
often used in contradistinction to Territory,
yet in its general public sense, and as some-
times used in the statutes and the proceedings
of the government, it has the larger meaning
of any separate political community, including
therein the District of Columbia and the Terri-
tories, as well as those political communities
known as States of the Union."
The Court quoted with approval the following passage from Geofroy
V. Riggs, 133 U.S. 258, 268 (1890):
I!
. . . . separate communities, with an
independent local government, are often des-
cribed as States, though the extent of their
political sovereignty be limited by relations
to a more general government or to other
countries."
Mora v. Majias, 206 F. 2d 377, 387 (1st Cir.l953), was a recent
case involving an attempt to enjoin the enforcement by the Secre-
tary of Agriculture and Commerce of Puerto Rico of a price regula-
tion setting a maximum price on rice. In upholding a refusal by
a single judge district court to grant the injunction, the Court
discussed the applicability of 28 U.S.C. s2281, which requires
a three judge federal district court for injunctions restraining
the operation or execution of any State statute. Referring to
the Act of Congress whereby Puerto Rico was transformed from a
territory into a commonwealth, the Court said:
"Puerto Rico has thus not become a
State in the federal Union like the 48 States,
but it would seem to have become a State within
a common and accepted meaning of the word . . .
It is a political entity created by the act
and with the consent of the people of Puerto
Rico and joined in union with the United States
of America under the terms of the compact.
"A serious argument could therefore be
made that the Commonwealth of Puerto Rico is
a State within the intendment and policy of
28 U.S.C. ~2281."
Honorable William A. Harrison,Page 3. (w-656)
Turning now to Article 21.11, Texas Insurance Code,
we find in the emergency clause of the act passing the amend-
ment an expression of what the Texas Legislature was attempting
to do when they passed the amendment. This clause reads as
follows:
"The fact that many other States issue
licenses to Non-Resident Agents and permit
the division of commission on a retaliatory
basis, makes it impossible for a Recording
Agent of Texas to obtain a Non-Resident
Agent's license in these States and thereby
citizens of Texas having property located in
these other States are prevented from having
the services of their own Recording Agents of
Texas for such risks, . . . .'I
The purpose of this amendment is to accommodate citizens
of Texas, who own property in States other than Texas, by pro-
viding a way whereby Texas Recording Agents can obtain Non-
Resident Agent's licenses in those States due to their reci-
procity requirements; therefore, the word "State" should be
defined to give effect to this legislative purpose.
It is quite possible and probable that Texas citizens
will own property in the territories, provinces and commonwealths
of the United States as well as the other forty-eight States. If
such territories, provinces and commonwealths require reciprocity
in order to license Non-Resident Agents, then to define the word
"State" not to include such areas would defeat the intention of
the Legislature in passing this amendment. For example, the
Commonwealth of Puerto Rico requires such reciprocity (Puerto
Rico Ins. Code, Art. 9.260).
In other words the pilruose of this amendment is to
license non-residents in order that Texas Agents can meet reci-
procity requirements in other jurisdictions, and any construction
of this statute which would restrict the licensing of non-
residents to those residing in the other 48 States would partial-
ly defeat this purpose.
It is our opinion that the word "State" as used in
Article 21.11, Texas Insurance Code, should be given a general
construction so that a territory or commonwealth exercising
local sovereignty over a geographical area under Federal
dominion, as for example the licensing of Insurance Agents,
would fall within the scope of Article 21.11.
Honorable William A. Harrison,Page 4. (wW?%)
SUMMARY
The word "State" as used in the
Non-Resident Agent's licensing
clause found in Article 21.11, Texas
Insurance Code, includes territories,
provinces and commonwealths and in
particular Puerto Rico.
Very truly yours,
WILL WILSON
Attorney General of Texas
BY
Assistant
JF:mfw
APPROVED:
OPINION COMMITTEE
Riley Eugene Fletcher, Chairman
Marvin Brown
Dean Davis
Leonard Passmore
REVIEWED FOR THE ATTORNEY GENERAL
BY: W. V. Geppert