OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN
4-G-
-- t eo
Honorable Charley Lockhart
State Treasurer
Austin, Texas _
Dear'Sir:
opinion HO. O-2956
Your recent requ ion of tl*o depaptsl=nt
on the above stated questi
0tter addr8sS8d
ter C. Wooclward,
Comissionors,
n regard to deposits
under provisions of
orty-sixthLegislature.
ou note carefully the con-
dvise us a3 to whether :
the State Traasurer vould be
ittod under Senate Bill 135 to ac-~,
dei7ycorlng
ours)
ter of Jlonorab%IfalterC. Woodrrard,chair;acm
n3urenc8 C~mdssionors attached to your letter
read3 as follow31
"In prormlgatln~ rule3 and reEul.ntlousfor tho
purpone of carrying out t!lepurpooc3 of Scnate Bill
155, the E3oa.rcl
of IilvuranceComisoloners, by author-
ity delegated to it ti&?i-Sectiozi25, i3sued en
0ffPcla1 order T?hichread3 in part a3 follows~
,
Honorable Charley Lockhart, Pago 2
/“-
@'The first annual premium paid
'by a new member, or assessmentspaid
in the first year by such new member,
msy be consideredas a membershIp fee,
but in such case the association is
required to pay out of the Expense
-Fund all claims occurring on policies
Sn their first year,'
'It now becomes necessary for the purpose of
safeguardins the interest of first year policy-
holders to require such associationsto make a
deposit to be held as a guaranty fund to insure
payment of claims arising in the first policy
y8ar. (It should be remembered that a small per
cent of mutual associationselected to adopt the
annual membership plan,)
"The laws prohibit the payment of claims
arising in one group or class from funds belong-
ing to another'group or class, The deposits
now held by the State Treasurer in accordance
-
with Section 6 of Senate Bill 135, vere made
vith funds belonging to other thsn first year
policyholders and could, therefore, be used for
their benefit only.
'In reqdiring such associationsto make
deposits to be held in trust for the purpose of
guaranteeing the payment of claims that may not
be paid from Mortuary Funds in which first year
. policyholders have no Interest, the Board is
confronted with the necessity of providing an
authorized depository.
"Inasmuch as first year pol.lcyholdersof
s&h associations have no lawful interest in the
deposit now maintained, and in the light of the
lav which requires that a deposit for the protcc-
tion of policyholders1benefits be made with the
State'Treaourer,you are respectfullyrequested
to give considerationto the acceptance of such
deposits for the benefit of policyholder:whose
interests are not otherwise safeguarded.
FOP the purposes of this opinion we do not think it
necessany to pass upon the conclusionsas stated in the letter
.
. . .:
._
i
,0Y .
Honorable Charley Lockhart, Page 3
last quoted above;
Article 4374, Vernon's Annotated Civil Statutes
SpeCiiiCallyprovides:
"....The treasurer shall not keep or re-
ceive Into the buildings, safes or vaults of
the Treasury any money, or the representation
of money, belonging to any individual except
In cases expressly provided for by law...,
After carefully considering Sen*t&:BillNo. 135,
Acts of the 46th Legislature, lgjg, ve find no provisions
therein authorizing the Board of Insurance Comnmiss.'.oners
to
require the deposit mentioned above. Neither do we find any
providion in said Act authorizing the State Treasurer to ac-
C8pt and hold as custodian ths additional deposit ~abovcre-
ferred to.
/--
Therefore, your question is respectfullyansuorcd
In the negative. .
Trusting that the foregolng fully answers your ln-
.. quiry, ue are
.
Very truly yours
ATTORNEY GEIE3RALOF !LTXAS
BY a14.h-cu&
Ardell Wlllams
: Assistant
:
All : Ali
-APPROVEDDX 14, 1940
U%d c
ATTORNEY GEBRRAI,OR TEAS