576 LLOYDS AMERICA V. HARRISON, INS. COM . [193 LLOYDS AMERICA V. HARRISON, INSURANCE COMMISSIONER. 4-4524 Opinion delivered February 8, 1937. 1. INSURANCE.—In determining whether a company is an insurance company, the nature of the business which it transacted and not the name by which it was called, controlled. 2. INSURANCE.—In • an action by an insurance company to compel the Commissioner of Insurance to grant it a certificate of authority to do business in the state, held that since the statute, Crawford & Moses' Dig., § 5977, prescribes "capital" and not "capital stock" as a qualification, an insurance company having available capital of $100,000, $50,000 of which is paid in may do business in the state, although it may not have capital stock. 3. MANDAMUS.—Since Lloyds America is an insurance company having the required capital to qualify it to do business in the state, mandamus will lie to require the Commissioner of Insurance to grant certificate of authority, though it has no capital stock. Crawford & Moses' Dig., § 5977. Appeal from Pulaski Circuit Court, Second Division; Richard M. Mann, Judge; reversed. Ed Trice, for appellant. Carl E. Bailey, Attorney General, and Guy E. Wil-liams, Assistant, for appellee. BUTLER, J. The appellant is a "Lloyds" organization chartered under the laws of Texas with its principal office in the city of San Antonio, Texas. It is authorized by the laws of Texas to conduct a general insurance business with the exception of life insurance. On the 12th of March, 1936, it applied to the insurance department of this state, on forms prescribed by said department, for a certificate authorizing it to do business in Arkansas, and offered to comply with the laws relating to foreign insurance institutions desiring to do business in this state. Without any investigation of the solvency of the applicant or its responsibility as an insurer, the Insurance Commissioner declined to issue the certificate on the theory that under the laws of this state the operation of the applicant would be prohibited. The appellant, thereafter, filed its petition in the circuit court of Pulaski county, second division, for a writ of mandamus to corn-
ARK.] LLOYDS AMERICA V. HARRISON, INS. COM . -577 pel the a.ppellee to consider the appellant's application upon its merits, and, that Upon appellant paying the fees which . might be exacted, to issue to appellant a.certificate of authority permitting it to engage in the business of writing miscellaneoUs•-casualty insurance in thiS state. •• 'The petitioner alleged its organization under the laws of the state of Texas, the nature of its business, and its plan of operation. It filed a summary of its assets and liabilities- -as••showil by the statement on file with the Board of Insurance- CommiSsioners of its jlarent state. From this statement it appears that it had admitted assets amounting to $580,619.71 ; that -it has a reserve liability of $154,000.91, a. policyholders .surplus of $209,- 611.16, and on deposit with the treasurer of the state of Texas, subject to the joint control- of its attorneys.in fact and the Board of Insnrance Commissioners of the state of Texas, securities Of the kinds in which insurance institutions are permitted to invest to the amount of $118,000.• . The appellant alleged that its organization is composed of . individuals, partnerships, and associations of individuals,-designated `.` underwriters," who, through their duly appointed attorneys. in fact, make and perfect insuyance contracts ; that in the -formation of the organization 'each .of the . underwriters is required by the laws of TeXas to contribute in cash, bonds, stock or .other secUrities,. a sum equal to fifty per cent. of its subscription, the .balance thereof being evidenced by -a demand note subject to the call of the attorneys in fact. The peti-•ion further alleged that the status of underwriters is analogous to that , of.stockholders. in a stock .company in that both stockholders andininderwriters are liable to the. amount . of their. . subscription; and its policyholders occupy . the identical status of policyholders in a stock company. . • " The•-petition stated that the , territory in which the appellant. organization iS permitted to do business includes the states of Texas, Georgia, Indiana, New -Mexico, Tennessee and Oklahoma.; that it is desirous of entering the state of Arkansas to : engage' in a casualty insurance business, specialWng in automobile, commer-
578 LLOYDS AMERICA V. HARRISON, INS, Com: . [193 cial. and pleasure car instirance ; that it has made application to. the Insurance , Commissioner for a certificate of autlicirity to do* a .naiscellaneous casualty insurance business in thiS state,- Offering-to pay all fees and taxes which might rightfully be demanded, to make and file a qualifying bond such • as other insurance companies and associations engaged in writing casualty lines of .insurance are required to file, and to coMply in all respects with . the general laws of this state ; that the , Insurance Coinmis-sioner of this --state has aAitrarily refused to grant -the petitioner a certificate•of authority to do businesS herein, as 'petitioner is .advised, solely on a mistaken view, of the laws• of , this. State. .-The petition concluded with a prayer for. writ . of mandamus directed, to the Insurance Com, missioner„upon.petitioner's compliance with the general insurance . laws . of the state,•• and the 'payment -of fees properly chargeable, to issue a .certificate of authority. The' Insurance Commissioner filed his demurrer to the petition alleging that the petitioner is an insurance organization . ' . organized and' permitted •o do business under-special statUte . in effect in the stare of r eas, corn: rnonly known' . a . s.. " Lloyds America that said organiza-tiOft-does . not have any capital Stock, is not alegal rese•Ve mutual company-nor 'is d class • of insurance or organization which is- permitted • by the -statutes of •Arkansas: *support of the •demurrer; the• Insurance -Commissioner set. out •§ 5977 Of Crawford •& Moses' Digest which provides : ''`'No insurance company shall be allowed to transact busi•-• ness of insurance in this state 'until•it shall have 'a- bowl fide subscribe& capital of not less than $100,000; with a pai&up capital , of , nof less thnir $50,000." • - • .The petition*was &arc': by the trial court' upon its allegations,. the. 'demurrer 'thereto, and . an agreed statement of facts.... The demUrrer was 'sustained, the court finding as a matter of fact that the 'Insurance Commis--sioner did not arbitrarily, oi iii denial .of petitioner's righ-ts, refUse•to 'grant its appliCatiOn, and to issue to .it a-certificate of authority. ! • • • •We- have no •statute expreSsly prohibiting a. Lloyds organization:from doing business in this state, but it is insisted- by appellee that thiS' is the effect : -of the..statute
ARK.] LLOYDS AiNiERICA V. HARRISON, -INS. CO1U: 579 relied upon, and of act No. 493 of the Acts . of 1921. Ap-pellee insists that Lloyds. America is an insurance company within the meaning of our laws. The appellant has presented an able argument in support of the contrary view, but we agree with the ap-pellee that appellant is in fact an insurance company, and it is the nature. of the. business which: it.transacts, and not the name by ' which it. may. be called, which controls. Casualty Reciprocal Exchange v. Bouuds, 191 Ark. 934, 88 S. W. (2d) 836. The allegations of the .petition and the agreed statement of facts make it clear that appellant is nothing more nor less than an insurance company. The appellee contends .that appellant being such, § 5977, supra, prohibits its doing business- in this state, for it is • admitted that it has no capital stOck, and is not an old_line insuranc6 company. The sectieh referred to, however, does not require that an insurance company shall have capital stock of not less than . $100,000, and with paid-up capital stock of not less than $50,000: The word "capital" is: used and not "capital stock," and we agree with the appellant that the word "capital" relates to the capital structure, and that if it has available capital of $100,000, $50,000 of which is paid in, it may do business in this state although it may not have capital stock. We find nothing in . the Act of -1921, supra, which, by any reasonable construction; could be deemed to prohibit the doing of business in fhis State by any:association such as 'is the appellant . Organization. , It . is true, associations of.this character are i not mentioned by name, but when the act .is considered in fits entirety together with the purpose for 'which -it . was enacted, there is nothing in it to imply prohibition. Prior to the passage of that act there was no specific. mention of mutual life insurance companies. We know, as: a. part of -the history of the state, that such companies although they have no capital stock have been doing business in Arkansas for many years, and it has never been suggested that although• they have nO capital stock they coMe . -within the prohibition of § 5977, supra. It follows from the views expresSed that the court below was in error in denying the prayer .of appellant's
580 [193 petition.• The judgment will therefore be reversed, and the cause remanded with directions to award the writ.
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.