OFFICE OF THE ATTORNEYGENERAL OF TEXAS
AUSTIN
Honorable D. B. Barrow'
Chief Eramiwr and Chlef Clerk
mrd 0r 1n8uran4e aolnal88ion4r8
Austin, Texas
Dear Sir:
ph appears in Seotion 9
by the 46th X~gidatare,
4 oQexat~one OS mutual *allem-
s~clatlo~ tn Texee.
4 of the osrtlfioate mu4t be statea
in& mob portioner of the by-l.W6
ion a4 umy aifeat the iaauranoe
artierr in any mstsrlel way1 and
4m4ndment4 to the by-lawn whloh tight atfeat 8ua)h
right4 of n~~mbers must forthwith ba mailed by
first-olaes mail to eaoh oertlfiaslte holder 4f-
fected. In 4480 of acsntroresay theburden of
proof shall be oa th4 aonpany to prOYe the aaand-
merit was mailed to th4 membrr. Peaah oertlfioate
mat provide that ft eh4ll ba inoontsrthble. atte3!
/
XOU. D. ‘i;.
Earrow, page I!
havlnfi iieen in for04 during the llletlme of
the ineured for a period of two years from date
of Issue. except for non-payment of eseesmwnte~
provided, however. any araoaletlon may iseue a
certificate providing 4 benefit leea then the
mxlmum benefit asmee in the iecb of the oertl-
fiocte in o&se of death of the member by his
own h-a while ehne or insane. It shall imio
~roribe that in 06184 the 4.~4 of the insured. la
&esstated, the amount of fkranoe ehall be that
which the premium aotually paid would puroharle
at the oorreot age, baaed on rate@ in for04 at
the time of the death of the lnrured. No aerti-
fiohte issuea by such association, nor any appli-
cation for the certlr5,ohte shall contain language
or be in suoh tone 48 to mislead the appliocmt
or the polioyholaee as to the type of Insuranoe
afforded. ,-
We have',underllned the portion oft t&4 paragraph with
whlah we are partioularlp oonoarn4d.
“~111 you plnaes ailrise if, under this provision of
the lau, a mutual aassaament
_. __._ lat1on
ineuranoe almoo
may 14eue a polioy provlQing ior a bemrlt 1088 thpn
the nmxhwi benerit in 0484 of death rrom n&litary
or naval service in time of war, or in aa8e 0r death
while ri‘diog in an airplane, euuh dsath ooourring
after two gsars rrom date OS issue.*
Yi;u have eorrsatly quoted the pertinent provisions of Seo-
tion 9 of Senato Bill 135, 45th Leglelature of Texas, and
cod.iried ee Section Y of Article 5058-1, %ernon*8 hotat
Texas Civil Stetutee. Such provlelone are applicable to
..zutualaseesement'lnsur~~cs arsoolatlone.
iire laauraiica aompenle4 organ$zed and operating under
. chapter 3, Titie 78, Reviee& Civil StetuZee, mey plaos’exoep-
tlone ir.their poliolee ror ViOlctiOEs or conditions or th4
polioy relating to naval end mliltarp services In time of war.
see Seotlbn 3 of JWiicle 4732, Vsknon'a tLrsiotate6Texas Clvll
Statutes, which raaL9 8.6follower
.?Thet the policy, or pollay an8 appllcatloa,
shall constitute t$e entire oontraot between the
partlee snE ekal.1 be lrcontestable not later tfxm
Ban. D. B. Barror;, page 5
i. two years iron Its data, except for nonpaymnt
of predinia; snd v&lch provision my or may not,
I at the option of the company, contain
ror tiolations
relating to nmal
war.'
of the
ac exception
conditions of
szib nillltary servicm
Iiowever, Texas court4 have repeatedly held that mutual
the policy
Id tlze of
aesesstmnt life lneurance oorponations are governed only by
the statutes pirtloularly applioabls to them as such and that
the ~4n4ral~insuranar laws rrlatfre to life insurance oomp4nl44
0rganha under Chapter 3, Tltle 76, Revised Ciril Statutes,
4x-4 inepplloable to mtual a44484xent iii4 inauranoe aompani40.
Se4 the follo~lng oases:
Banker8* it;: & Loan Asa'n Y. Bond, 112s S,W.(g$]
Bankers' Life k Loon &ia'n v. Chase, ll4 8. if.
(aI) 974
General Li&I~JlNl~44 co. v. Potter, l.24f. 'x.
The oourts of' Texas havs.slso bsld that tutual a88e44mnt
life .In4urano4 companies may plaoa reaeonebl4 Umltatlonr on
their liabilitle4 in their po1i.ci421 Jworided mulw are not prg-
hlblted by otatute anpliaablr to them. 3ee the tollming 44844:
Imperinl Life 1~4uro~c4 Corapany Y. Thornton, 1SS
a. E. (2d) 298
Emkera* iire k Loan Asstn v. Chase, 114 3. 3.
- (24) 374
Benkern' Llte SC Loan ABB'~ Y. Don&, 11s S. u.
(Zd) 1001
Clearly section 3 of -4rtiale 4792, V?rnon'a Annotated
Civil Stctutes; mpra, applicable to life lnsur4nc4 oorppmi44
generally, has no application to mutual ae4essment liie,in4Ur-
41144 eonipanlas. $4 must, therefore, look to the provialons
of Section 9 of Senate Bill 135, supra, for our,adswer to
thi8 qU44tiOA, 44 we hnve been unable t@ find any othqr pro-
vieion of law appllaabls to mutiial asee44,mnt life insuranOe
companies and applicable to th4 question baiore ~4, other
than Seation 8, supre.
It i8 CUT OpiAiOA that S4OtiOA 0 Of s6IlRt4 Bill Ii%,
supra, 14' al44r and unembiguouo.
2%&
BOA. D. B. Barrow, peg4 4
It IS our opilllon that raid section olserly provldee
that the oertlfioato or polloy of insurance muat provide that
Skall be iAOOAt4fJtabl4, after having been iA for04 for
seII;d
two years, eroept for nonpayment of asassamente~ thie 1s
I limited oniy by the providon relative to suicides while
sane or iA44A4, 4Ad by the provIa relative to m.l.8-8tatem4At
of ag4, eta. hi6 84OtiOA daee not OOAtaiA 4ny prOYiS0 re-
lative to the death of the insured duriAg war, military or
naval eervico or a* a result of airplane hazard e404s to
4xoept &d ri8ks from the lAooAtret4bility feature of the
poliay after the polioy has been.iA for04 for two yearr.
The statute ia plain, and vr,fJaA not read ouoh pro~ision8
into it.
You are, ~tbsrcforr, rsspeotfully advi-44tl that it 18
the opinion of thl8 Department th4t your pu4sti4n rhould.
b4.4Aawered in the mgative, and it Is ao enswkred.
Yours very truly
ATTORNEY.GElW3AL OF TEXAS.
ATTO- GENERAL .
wnm