Butler v. American Nat. Ins. Co.

On Appellee’s Motion for Rehearing.

Motion for rehearing questions our original opinion mainly on the ground that ap-pellee, a domestic legal reserve life insurance company, organized under Chap. 3, Title 78, V.A.C.S., is exempt from all the provisions of Art. 5068 — 1, V.A.C.S., and particularly Secs. 23 and 24 thereof, defining and regulating burial associations.

This exemption is claimed under Sec. I of such Act, which reads:

“This Act shall apply to and embrace all insurance companies and associations, whether incorporated or not, which issue policies or certificates of insurance on the lives of persons, or provide health and accident benefits, upon the so-called mutual assessment plan, or whose funds are derived from the assessments upon its policyholders or members, and shall, in fact apply to all life, health and accident companies 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 Texas, except that it shall not apply to associations not operated for profit composed only of the members of a particular religious denomination, and which do not provide insurance benefits in excess of One Thousand ($1,000.00) Dollars, on any one person and which do not pay any officer a salary in excess of One Hundred ($100.00) Dollars per month. This Act shall include local mutual aid associations; statewide life; or life, health and accident associations; mutual assessment life, health and accident associations; burial associations; and similar concerns by whatsoever name or class designated, whether specifically named or not.

“This Act does not enlarge the powers or rights of any of such associations nor *192enlarge the scope of their legal or corporate existence; nor authorize the creation of any association or corporation to do any of the sorts of business above indicated, where such creation is not now specifically permitted by law. The laws prohibiting or limiting such creation and the exercise of corporate power are not affected by this Act.”

We do not agree with appellee that the exclusion provided in the above section of this Act can be converted into affirmative authority authorizing appellee and others of its kind to operate as a burial association without any statutory regulation. This law was enacted by the Legislature because of “The fact' that the present laws governing life, health and accident assessment insurance, as well as burial benefits, do not adequately protect the members from loss through unwholesome, unsound or fraudulent practices, and the Board of Insurance Commissioners is not empowered to safe-guard the public interest * * Sec. 36, S.B. 35, Acts 46th Leg., Reg.Sess., p. 401.

The passage of this Act would have aggravated the situation described by the Legislature if appellee is correct in its interpretation of this law.

It is clear, in our opinion, that the overall purpose of this Act was, as expressed in the title of the Act, “Regulating Mutual Assessment Companies”, and insofar as such regulation was concerned appellee and other similar companies were not regulated thereby, but insofar as burial associations are concerned, which were specially defined and regulated by severable portions of this Act that such Act and such laws therein referred to exclusively provide the requisites of and controls for those who desire to engage in the business of writing burial insurance payable wholly or partly in merchandise or services, and that appellee was not free to write insurance of this kind as it pleased.

In other words, we construe Section I of this Act as not in fact creating any exemption in favor of appellee or in vesting ap-pellee with any-more authority than it previously had, but we construe it only as expressing the legislative intent that appellee and the other types of companies named did not come within the purview of the Act. The motion is overruled.

Overruled.