### THEAITORNEY GENERAL OFTEXAS

HonorableGeorge B. Butler, Chairman Board of InsuranceCommissioners Austin, Texas
Dear Sir: OpinionNO. 

### o-6642 R0: ConstruingArticle 4764a, V.A.C.S., as to whether a group insurance policy issued to a flnanclal~lnstltution is permitted to cover the lives of any number of borrowers from a flnancl~al institution less than all of them and more than 100 entrants annually.
We have carefully consideredyour letter of June 

### 5, requesting this department to render an opinionanswerln 

### 1945,
7 certain questions presented by~gou relative to.~Subdivislon

### 3) Section 1 of Article 4764a, Vernon's Annotated Civil Statuies of Texas. lows: Your questions substantiallyrestated are as fol1.

2. May a group oplicgbe issued covering the lives of any number of borrowers from a financial Institution,less than all of them and more than fifty, and if so,what are the restrictions or regulations as to classificationof such groups? Should the premiums on such group policy be paid by the financial Institutionout of its own funds, or may It collect premiums from the debtors for the purpose of paying such premiums?
Your first questionnecessarily calls for an interpretation or construction of Subdivision 

### (3)of Section 1 of the foregoing statute,particularly the underscored portion of said subdivisionworded as follows:

"Sec. 1. The following forms of life insurance are hereby declared to be group ll,felnsurantewithin the meaning of thisAct:Honorable George B. Butler, page 2 

### 0-6642

“(3) Life Insurance covering only the lives of all members of a group of personsnumbering not less than fifty (50)at all times,who become borrowers from one financial institution,or who become~purchasers of securities,merchandise, or otherproperty from one vendorunder agreement to repay the sum borrowed, or to pay the balance of the price of the securities,merchandise, or other propertypurchased, to the extent of their indebtedness to said financial institution or vendor, but not to-exceed Ten Thousand Dollars ($10,000)on any one life,written under a policy which may be issuedupon the application of and made payable to the financial institution or vendor or other creditor to whom such vendor may have~transferredtitle to the indebtednessas beneficiary, the premium on suchpolicy to be payableby the financial institution,vendor, OP other creditor. Provided, that group life insurance Issuedunder this classification shallnot include annuities or endowment insurance, The requirements set out in Subsection 4 of Section 2 of this Act shallnot apply to this Subsection."
It Is noted that the foregoing Subdivision (3). of Section 1 of the statute ls,taken fromHouse Bill No. 326;Chapter 349; of the General Laws, 48th Legislature,Act of 1943, p. 604, the caption of which amendatory act provides:

"ANACT amending Section 1 of Chapter 101, Senate Bill No. 41, Acts of the Regualr Session of the Forty-secondLegislature, as amended by Section 1 of Chapter 

### 610,Acts of the Regular Session of the Forty-seventh Legislature, so as to make available group life Insurance to employees of schooldistricts in the State of Texas; and declaring an emergency." Article 

### 3,Section 

### 35 of the Constitution,provides:
"Nobill, (exceptgeneral appropriationbills, *.......)shall containmore than one subject,which shallbe expressed in its title. But if any subject shallbe embraced in an act, which shallnot be expressed in the title, such act shallbe void only as to so much thereof, as shall not be so expressed."
Itwill be seen from the caption of the foregoing.~House Bill No. 

### 326 that same amended Section 1 of Article 4764a; V.A.C.S., but in doing so expressed the sole purpose of making availablegroup life insurance to employees of schooldis-Honorable George B. Butler, page 3 o-6642

tricts in the State of Texas, A paragraph authorizing such insurance is found added to Subdivision 1 of Section 1. Section 2 of the Act, being the emergency clause, expresses the fact that there Isno provisionunder the present law for school teachers and employees of the public school system to obtain group insurance,and the fact that the enactment of this act would make possible suchgroup Insurance,and the fact that such insurancewould be for the Interestof the public school system and the teachingprofession of this State createsan emergency, etc.

The authorities are numerous to the effect that a caption of an act is deceptive and misleadingwhich expressesa purpose to amend the statute in a certainpartlcuiarwhen the body of the act goes beyond and purports to amend the prior law In other particulars. New substantivematter contalned In an amendmentwhich Is not germane or pertinent to that contained in the provision amended, is invalid as legislation upon a matter not expressed In the title of the amendatory act. 39 Tex. Jur. para. 48, pp. 102-4, and cases cited therein. Where a statute operatesas an amendment of an earlier law, the effect of holding it to be unconstitutional is to leave the original enactment in full force'and effect. 'Culberson vs. Ashford, 118 Tex. 491, 18 S.W. 585; 16 C.J,S.para, 101, pq 102,N. 61.

Prior to the foregoing1943 amendment,Subdivision (3), Section 1 of said statue,as corkained InHouse Bill 1061, ". Chap. 610, Genera1 Laws, 47th Legislature,Acts 1941, p. 1346, provided:

"(3) Life insurance covering only the lives of all members of a group of persons for not more than Ten ThousandDollars ($10,000)on any one life, numbering not less than one hundred (100)new entrants to the group yearly,who become borrowers from one financial Institution, OP who become purchasers of securities,merchandise, or other property from one vendorunder agreement to repay the sum borrowed, or to pay the balance of the price of the securities, merchandise, or other propertypurchased in Installments over a period of not more than ten (10)years to the extent of their Indebtednessto said financial institutionor vendor, but not to exceed Ten Thousand Dollars ($10,000)on any one life,written under aHonorable George B. Butler, page 4 O-6642

policy which may be Issuedupon the application of and made payable to the financial Institution or vendor OP other creditor to whom such vendor may have transferred title to the indebtednessas beneficiary, the premium on suchpolicy to be payable by the financial Institution,vendor, or other creditor. Provided, that group life Insurance Issuedunder this classification shallnot include annuities or endowment insurance.The requirements set out in Subsection 4 of Section 2 of this Act shall not apply to this subsection."
It is apparent from the foregoingauthorltles and we so hold that Subdivision (3) of Section lof the statute as lncorporated In the foregoing 1943 act and appearing in Vernon's Annotated Civil Statutes, Supplemental Pocket Parts, 1944, is invalid, thereby relegatingus in this opinion to consideryour questions solelywith reference to the original enactment of' Subdivision (3)as found in the earlier amendatoryAct of 1941, H. B. 1061, 47th Legislature, last above quoted.

By Section 1, Subdivision (3) of the 1941 Act applicable to borrowers of a financial institution,permissiblegroup insurance is defined as life insurance covering only the lives of all borrowing members of a 7roup of persons . D
.numbering not less than one hundred (100 new entrants to the group early. The only restriction OP limitation found in Subdivision (3 7 is that such insurance shallnot be issued for more than $lO,OOO.OO on any one life; there must be 100 new entrants to the group yearly; the insured indebtedness of a member, If payable In installments, shallnot exceed $lO,OOO.OO over a period not to exceed ten years and such group policy be issuedupon application of and made payable to the financial institution or other creditor, transferee of the debt by the institution, as beneficiary. It is furtherprovided that the premi~um on such group policy shall be payableby the financial institution or creditor transfereeas beneficiary and that such group life insurance shallnot includeannuities or endowment insurance.
We find no language in Art. 4764a as enactedby the 42nd Legislature,Acts 1931, and as amended by Acts of 1941, or any valid provisions of the 1943Act, requiring or restricting a group life Insurancepolicy issuedunder Subdivision (3) to cover all of the borrowers of a particular financial institution.Tither do we find In the Act any regulatorypower given the Life Insurance Commissioner expresslydoc7'rnwith such contractualrelationshipsbetween the borrover oaf a financial institutionand the institution itselfwith reference to the applicant for a loan paying to such institutionHonorable George B. Butler, page 5 o-6642

a portion or all of the cost of such group policy Insurance as applied to applicant's loan.

In view of our holding invalidSubdivision (3) of Section 1 of Article 4764a,V.A.C.S., as Incorporated In Chapter 349,Acts 1943, 48t.b Legislature,and answeringyour question with reference to the prior lawunrepealed by said amendment, Chap. 610, Acts 1941, 47th Legislature,General Laws, p. 1346, It is our opinion that a group policy issuedunder saidAct 1s not required to cover the lives of all borrowers of a financial Institution exceeding 100 new entrantsyearly, More than one group policy ma-7 be issuedupon separateappllcation by a financial Institution, setting forth a classbearing reasonable relation to and distinguishable from other policy groups, inclusive to members of such class or group of not less than 100new entrantsyearly. The premium on any such group policy is payable by the financial Institution OP beneficiary. Such financial institution 1snot prohibited from collecting from an applicant for a loan cost of such insurance as applied to and charged in making the particular loan to the borrower.
Yours very truly,
ATTORNEY GENERAL OF TEXAS By s/Wm. J. R. King Wm. J.-R. King Assistant
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APPROVED AUG 9, 1945 s/Carlos C. Ashley FIRST ASSISTANT ATTORNEY GENERAL This Opinion ConsideredAnd Approved In Limited Conference