Hon. hlter C. Voodward CNlnmn

~wo8dofT~ance Com&rlonerr * Dear sirs Opinion Jio. 04460 Ret: Whetherthe deaarlbed type of lmurarm transaatlon violates the ineurMae laws of Texa8andwhether It is within the charter powers of the United Travelers Insurance Compmy, Houston Texaa, to deal with an lndlviduai or oorporation ln the Mnner outlined. As a basis for preaentlng the above questions for an opinion of this department, wequote from your letter of June 18, wherein you Qaks the request, as follows:

“In the cases referred to it Is proposed that certain individuals or oorporatlons will provide their customers with insurance usually accident Insurance, without cost to such CUB & omer8upon the purchase of retail cominodltles. The cost of the insurance 1s paid to an Insurance companyby the individual or corporation selling the aomodlty, In accordance with the terms of an insurance contract issued by the lnsurancr company to the individual or corporation insurlhg the customers of the indlvldual or corporation.

“The individual or varloua representative8 of the corporation are to be licensed agents of the inmrance oompany, and It is our request that you advise us at your earliest convenienae whether **or** not in your opinion this type of insurance transaction violates the Insurance Lawsof this State ln anyrespect, andwhether or not it 1s within the charter powers of the insurance coupany to deal with an Individual or corporation 3x1 the **manner**outlined.”

Accompanyingyour request Is a certificate form proposed to be issued by the United Travelers Insurance Company,Houston, Texas, dcslgnated as a conbined customer’s receipt and insurance policy, which states that the conpany agrees to lnaure the customers of Eaton’s Gulf Serviae ofSlUdmore, Texas, by a group poliay of insurance No. 0208under the subject to tho tern-mand conditlone OS' said policy and the appllcation therefor. Thegroup @lay form Is not submitted with your request.

Theplan proposed M stated ln go* request In **certain** respects, Is a semblance of the plan uponwhich group lnaurancc is generally orovlded by an emlorer for the benefit of lta 

### employees.ItHon. Walter C. Woodward, Chomn, Pagee 2 3-2463

Is to be observed that the corporation owning andcontrolling

~~‘10~s wrvlw etetlona, oontraote with the insurance aostpuryfor a groug POllOYunder andby **VirtUb** of whlah It gurOhaw8 oertlflcatee in book lots, with l

aah aertlflaate to be leewd as a policy or lneurence and given free at its aervloe stations **to** auetomere upon their purehaae 

### 0r the acsmaodltlea 

### 0rthe oorporatlon on lt~le at such statlone. mu3 corporation **or** owners or the conmmditlce **or** group @Icyholders, ln this reep”ct are propoalng to assumethe statue of an employer under a dsenera Iy reeognlzed group polloy, ln which It **pays** the **premium**ror each oertffloate ieeued. It aan be assumedthat tha aorporatlon or group pollayholder aleo **pay8**all of the coetebr hendliag the lneurme **ror** Its auatolaere. Not only the **group** polloyholder **paye** to the lnwed the prenhm due for each Uertiflcate lemmd by Its a&ent, but it also transmits, through its agent or servioe station attendant, the pG8d.i ior My extended ooverage the cuetomer maydesire and pCkyel’or

. Viewing the proposed certificate form, wemayassumethat It contains the tesentlal provisions of the master group policy provides for payment In lieu of all other indemnity, the sumof 500.33 r lnssedlat@Iy uponreoeipt of due proof of the death of **the** insured as a reeult of bodily Injuries which are the sole cause of loss of life effected solely andexcluelvcly by violent external causes and solely thz%mghaccidental meant **during** the coverage period of the certlflcate War policy, UnderTitle 76 Chepte3, Vernon’s Civil Statutes entitled “Life, Health andAccident Insurance”
, under which t’he a&ove rimed companyis Incorporated, your attention is directed to Article &‘64a, Sections l-6. Section 1 of this Statute deflnlng group life insurance provldeet

“Sec. 1. OroupLife Insurance Is hereby dcclared to be that form of Llfc Insurance covering **not** lees than twenty-rive employees written under a policy lwued to the employer, the premiumtor wfilch is to be paid by the employer or by the employer and employees jointly and lnaurlng all of his employees, or all of any class or alasses thereof determined by conditions pertaining to the en~Iiym?nt, for a~ounta of lnrmrmce based upon someplan which will preclude Individual selection, andSor the benefit of persons other than the employer; provided, however, that whenthe premiumIs to be paid by the employer end employee6jointly and the beneflta of the policy sre offered to all eligible employees, not less than seventy-five per oentum of such employees maybe so insured. **For** the purposes or this Act the **members**of any labor union whoare actively engaged In the sameoucupatlon shall be considered employees of such union. Theprovislonn or this Section, howeve?, ahall not appl;- tc Croup,,Insurame nowIn effect, or to any renewals thereof.

It seems to be well settled by the authorities that a policy provldlng ror payment ln case of aocldental death is, to the extent or such provleion, to be deemeda policy of life insurance withinthe mean- of a statute having relation to life lneurance. Logan v.

Fidelity and Casualty Company of HewYork, 146MO.114 47 S.V. 948; zimser v Central Aaoldent Ineurenoe Comparq 207Pa. 472 56 A. 1003; Paoifla ktual Life Xmurance Cwny of Calirornla v. P&ker et ux., 71 F. (24) 872, andother authorltlee alted therein.

In the Logan oaea, **eupra,** the Suprem Court of Hleeouri **etatest**

“Thepromise to pay aweekly indemnity by an lneuranoe aompany ln the event the Insured reoelvee 8n injury fmm an aacldent not resulting In death does **not** change the aharaoter **of the**  agreement of the policy to pay a certaia other sumwhenthe accldent results fatally, whioh 18life Insurance from accidental causes, as the promise to pay a certain etlpulated sumto the insured (nowcontained in mtu’ q of the pollclee leeued b what 1s knm es 'old line1 life lneurance oompeniee whentho Insured attains f a given age or 5.na definite specified time, and If berore the insured arrives at the age designated, or before the time fixed ior Its certain payment, he shall die from any came, accidental or otherwise, to pay his legal representatives **or** eomsone named In the polioy as bcneflolary the amount etlpulated, Is nona the less life insurance became coupled Yith an investment or bond feature, not found In what 18commonlyknownas a ‘8traIght life insurance POllCY. Yhe calling of a contract of insurance sn
‘accident, ltontlne,v or lrerpler' life policy, or for that matter, by any other appellation that maybe adopted **for** business or conventional uses or claesif1cation, cannot makea pCrllcy contalnlng an agreement to pay to another a sumof money designated upon the hsppening of an unknownor contlngent event, depending upon the existence 

### 0rlife, lees a policy of lneurence on llfe. Ineurancc on life includes all pollclee of Insurance in which the payment of the InsUranCemoneyISContIngent upon the lees of life.” Theparticular group policy under consideration, with payment 

### 0rthe principal sumcontingent, depending uponthe existence or life, insuring a collection of lndlvlduals limited to the customers of the grou policyholder, is clearly not within the ecope of Section 1 of Article 764a above referred to.

E Section 6 OSthis lawprovldesr

“Except ae maybe provided In this Act, Itshall be unlawful to makea contract of life insurance coverlng a group In this State,”

We think it clear that the propooed plan or transaction, involving the contract of ineuranca described, is prohIbIted by the above quoted provision of the law.Hon. Walter C. C;oodwa.rd, ?a.ge4 Q-24&

Youare **thererore** respectfully advlsed that group policy aontraots gush aa that of the United Travelers Inmranae Company,Xourton Texas, under and rubject **to** which aertlflaatee are lsrrued insuring the cutstoner of the Insured, are prohibited by Seation 6, Artlale 4764a, Vemon~a Civil Statutes, andin the opinion of thlr Department, the writing 

### orouahtppe 

### 0r lnarururae 18without the charter powers of ruah aorporatlon. Youra very truly ATTORNEYOENBRALOFTXXAS

APPROVED AU012, 1949 I/ Orover Sellers FIRSTASSISTAXT AlToRNxYOENXRAL Approved opinion Comlttee Bysm ChaIrman This Opinion Considered andApproved In llmlted Cmferencc