‘738
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:
OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
QROVL” SLLLIII*
-.
Aly”“SV OCWlllL
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Xoaorable’ George B. Butler, Cheirman
Dear Sirb
ciotion, would said
ons be operating In
Of Art. 4875a-4,
s.7 Ana related
letter of reoent date
under Chapter 9a, Title
lroumatanoear
ae is an officer or director. of”
iation and.the other spouse an
r direotor of another aasooiation?
your answer be different if one of .
the spouses owned all or a part Interest in
the Funeral ~iome designated in the policies
through which burial merchandise or service6
will be performed?
aAn officer or direotor of each of two or
more associations own an interest in the
Funeral Eonie designated in the qolioies of
the assooistions es the ones through whioh
the burial. merohaudise and ssrviaes will be
furnished? s
‘:i 739
soion:George B. Butler,’ page 2
-
. “Two or more aesooiatione have designated the same
Funeral Xoae as the one to furnish merchandise and
servioes under the polioiee of the assooiation, but
none of the offioere or direotors of the associations
have any finanoial interest in the Funeral Home?
. “1s it permissible for an agent to have an appoint-
ment from two or more assoolations and to write a
, policy in both aseooiationa on one individual?
. “In. it permissible for two ~asaooiations to oooupy the
fame quarters and share the maintenance expeneee of
rent, utilities and so forth; may they Jointly employ 3.
the came personnel to work for both associations and
to pay them proportionately from each asaociation?n
A&Sole 5068-1, Vernon*e.Annotated Civil Statutes, provide8
. .T.
in part as follows:
We&ion 1. Thie Act shall apply to and embraoe all
insurance companies and associations, whether incorporated
or not, which Issue polioles or certificates of insurance
on. the live6 Of persona, or provide health and accident
benefits, upon the ao-called mutual aaaesament plan, or
whose funds are derived from the aaeeaamenta upon its
polioy holders or members, and shall, in fact, apply to
all life, health and aocident companieo or associations
which do not come within the provisions of Chapter 3,
Chapter 5, Chapter 7, Chapter 8, Chapter 9, Chapter 18,
:Chapter 19, or. Chapter 20, Title 78 of the Revised Civil
Statutes of Texae, This Act shall include local mutual
aid associational state-wide life; or life, health and
aooident associations; mutual aseessnent life; health
and aooident a oiationa; burial associationsi and
similar oono ne, by whatsoever name or olaas aeeignated,
whether,/ a oifioally named herein or not,n(Undera.coring ours)
.,’ .,.
II* * *
“SBO, 2. The follo&g. terma when used in this Aot
ehall be defined:
II* * *
“~Assessment’ ehall include premiuma and mean any
and,all money or valuable thing paid in oonslderetlon
of &oh insuranoe as is afforded by the certifiCate.
“‘Uemberahlp fee’ shall be the amount of the first
assessment or assessments permitted by the Board to be
placed in. the expense fund of aesooiations, represent-
ing cost of soliciting or proourlne the member.
II* * *
;.
740
, George D. Butler, page 3
*Sec. 12. Assessments when collected shall be
divided. into at least. two (2) funds. One (1) of these
.&all be the mortuary or relief fund, by whatever name
it may be called in the different associations, from
which-claim8 under oertificatea shall be paid, and to
a limited extent the cost of defending oontested alains,
and nothing else ; and the other funds ehell be the ex-
pense funds from which expenses nay be Daid. At least
sixty (6~;;) per cent of assessclonts collected, exoept
the membership fee, must be plaoed in the mortuary or
relief fund. The mortuary or relief funds may be
invested only in such securities as are a legal invest-
ment for the reser.ve funds of stock life inauranoe com-
panies.
II*.* * ‘.
@Sed. 23. Any individual, inaieiauaLa, firms,
co-partnershipa, corporations or asaooietions doing
the business of providing burial or funeral benefits,
which uwler any circumtances may be payable partly
or’ wholly. in nerohandise or services, not in excess
of One Wndred and Fifty (4150.00) Dollars, or the
value thereof, are hereby declared to be burial
companies, associations or societies, and shall
organize under provisions of Chapter 274, Acts of
the Forty-first Legislature, 1929, and a@n&ents
thereto; and shall operate under and be ~;governed by
Chapter 274, Aots of the Forty-first Legislature,
1929, and amen&vents thereto, and this Act. It
shall be unlawful for any individual, individuals,
firms, co-partnerships, corporations, or aaaooiationa,
other than those defined above, to engage in the busi-
ness of providing burial or funeral benefits, which
under any oiroumatances may be paid wholly or partly
in merohandise or servioes.
%eo. 2J+. Polioies or oertifioatea issued by
burial associations shall provide for payment of the
benefit in certain stipulated nerctiandise snd burial
service, which shall be acne&Led in thQ PllCY Or
ztific*te and aDproved by the i30ard Of insurance
comm:--wrs as being of tha re asonable value as
stated in the faoe of the polioy, unless the i,insured
shall at the time said policy is ie,eued elect to have
8aae paid in cash. The-policy shall show in writing
the election made. If the assooiation issuing said
policy shall fail or refuse to furnish the merchan-
dise and services provided for in the polioy, aame
6hal3 be paid in cash.“~ (Underscoring ours)
Art. 4875a4, V. k. C. a., providea:
f:
wTh+% ahall be no oonreotion between any two
i aesoolationa operating under thle la%? eml no one
I~ asaooiation ahall ooatribute anythlnc by way of
i
;
T salary or conpccaation to any exooutive offiosr
for the purposes of ouoh other aesooiatlon.n
r$ . Your first question wna answered in this departmnt~e
~~1nlou lie. O-2879. Dy that opfniou, in affeot, we mid that
t because there was 8 fanily relatioushlp between the offlcere
; 0s two burial asaopistiona, Art. 4875a4 waB not viclated.
In andlwer to your eeoond queetion, it ia our opinion
that in the sbsecoe of any statutory prohibition where on%
~pouee oxns an fntcroot ic or ouna all of 4 r’unsral ikw~ deal&
Lstod in the polioy OS a burial assoalation through which burial
sm9mndise ox eeruicsoare to be furnished, he, or the other
B;OUBB,my serve as an offioer or direotor of such asoxietlon.
In view of w&t WJ hove eald above, your third guctrtion
Is anawcrgd in the negative.
In view of our Opinion lie. O-2fV9, a copy of which was
heretofore Sumiohud you, orid becciuse of what w have bald in
mower to your aaoond e&d third quettlons, WC enawer y0u.r fourth
qucstlon ln the negative.
It ia our opinion that your fifth question should bo
tnewerod in the a’ffirnative and It ia 80 ornxered.
In answer to your sixth c;uestion, it itr our opinion that
the sot of faots as stated doe6 not violate Art. kS7544,ae a
Utter of law.
Wa trust that the aboYe.nnd’fore&oing setlsfaotoril$
Wnera your inquiries.
Pours very truly,