Hotiorable George Van Fleet, Actuary Board of Insurance Commissioners Austin, Texas

Dear Sir: OpinionNo. O-2652 Re: Article 4752,Ve6ndh% Aniibtated‘~ ~' Texas CidiI'Stdtutel'-~ LImited Capital Stock Compahies --tiriE:hljr or weekly ...,~ Pr'emlums

Plan - Single Premlum Plen.

Your request for opinion has beeti~i%~I~~~~Md carefizllg considered by this department. We quote from your request
as follows:

uYour opinion iS respectfUlly &quested as to'wtiether

Wnot a limited capital stoCk life, health afia acclaent insu~anc~'company;~organlied andoperating rn this State and subj'i3ct tb.th'e provisltiiis

of AtitibX 4752 of our statutes; is authorized to issue a single premium policy.

_ "I Bm-eficlosing 8 photostatic copy bf~such Kpolic~, ana we request your opinion about this matter.

_, ,,~~ -'Article

4752,Vernon's Annotated Texas Civil Statutes reads as follows:

^ _. "Companiesmay b6 incorporatd. in'themaiiner' prescribea by this-.chapt& for the-'lticotiporbtloti of life, accid&nt and health~iiisurance compaiiies generallg,/which shall have~~.powep ~onlgto ttian@.~~ ikit btislness

withlilthis'state, atid'to~w?l'ce'iiitiartinceonl?T

On the'weekly'br'mbtithls oti‘emiutis rrlⅈ and to-t&titie

ti6pblicg'protiisfng to.pay^'mor&

than
one thou's&fid~

13611%~~iKth&-ev&t 'Ofd&at% 6f"the insiii-&i

friim ii~tui%l'c~us6s, nbp tioi+e'th&nW-t*o thotisana

doll&rs insthe'-

ev'ent of. a&atK'of f&y.

. tigFson Tr6m acc'ragfital.

CaU'8es,~

which majr'issiie,' cdmb'iiiea'or'separ~tiily, Lffe, 'accia'ent“or-.health ltisi%rafic&~~poLZcl~s wfth not less~th&ianon actii81. pald'up capU%l of twetity-fLve th6tisand'.dollars. All stich~cbmpanies'$hall'b‘e's~bj~dt'to tillthe ~~ laws regulating life insurance companies in this- .

Bonorable George Van Fleet, page 2 o-2652

State not Inconsistentwlth'the provisions of this article. Such companies shall not"be permitted to invest their assets in other than Texas Securlties as defined bg'the laws of thIs~State~regulating the Investments of life Insurance companies.' (Underscorlngours)

We thlnk'that the term ‘"weekly premiums plan" as used in Article 4752; siipra, means a-~planof insurancewhere prhmlilms are contracted to be paig eaEh week and that like-~" wise a "monthlypremlums planrr means's planof insurancewhere premiums are contracted to be paid each month. ". Article 4752, supra, is clear and unambiguous: It is the-.oplnion

of this department that limited-capital stockyinsurance companiessunderArticle 4752, supra,may write insurance only on the weekly ormonthly prem‘iums'plan. 'Insiirance~. written by a Iimited capital stock~compahg on an "annualpremium plan" or a "singlepremium plan" or any plan otherthain'. the "weekly or monthly premiums plan", would-be Ln clear violation of Article 4752, supra. Your question is therefore answered in the negatlve. -. We have carefully examined the photostatic--copy-of a-.~. policy of Texas-'State Life Insurance Company ofDalles, Texas,
a~limited capital stock company subject to the provLsions'of Article 4752, supra,which you enclosed in-‘ your letter,upon which pollcy'you desire our opinion. We call your attention to the followingprovisions of said policy:

"This 'WalkerPlan'.Slngle PremiumDivifiend-' Policy' is issued at age-. vears in consideration of the application therefor, the execution and delivery of a Walker Plan Single PremiumNote bearing six per cent per annum“lnthe amoiint~ of Dollars, calsulated
on multiple-'monthly premium payments, and the payment in advance to'the Company of the first twelve months' interest thereon of Dollars. ..(Said sum being-'interest under this Walker Plan is not refundable,)

"After this Policy has been in force.~one full year and the interestdue on the Walker Plan Single PremTumNote for the subsequently twelve months shall have been pa1.d and~on each anniversary'thereaftersudh~'.divldends and/or credits as shall have been apportioned by the Board of Directors to thlsPol'icy shall at the option of the Insured by (a) paid in cash, orHonorable Qeorge Van Fleet, page 3 0-2652

(b)used In reduction of Walker Plan--SinglePremium Note, or (c) left with the Company--to aboumulate to'the-‘credit ol the policy atsuEh rate of interestas the Board of Directorsmay determine."WhLle this Policy Is In~for&e'an& ,.~ .~, ~. before ~efeiiltifi'the~ paJrment'of.any~~interest due‘siMh.ahdui&lateadiviaends~ may be~wlthdrawn in cash upon-'any

annlversary'of the.pijllcy if nbtpald or applied beforehand, or-shallbe payable~upon ldaturlty.of'this ~PoliCy'tothe. person entitled to receive'the proceeds. If iiooption Is selected the dividendswill be applLed under option (b).

"All interestpayments onthe' Walker Plari'~ Single PremiumNote-'afterthe flrstare atwand payable monthly in advance at the Home Office of the"Company in theCIty df~DalIas,Texas, or. to's de^signated

collector on-"or

before aate'due; but ~lnany~case only‘% exchange for the Company's reheipt therefor,'"signeti by the Presldent;VlcePre5ldent,Jecretary,'Ass'Lstant~ Secretary or' Treasurerand countersIgnedbysuch collec'tor; The"mod-e

of interestpayment may be ~changed'tb'~ tbree~months, six months or twelve months ih advance, but except as herein provlaea, the payment of any interest on the Walker Plan Single'PPemium Note'or installment thereof shall not maintain the PollCy in force beyond the date when the neistin-' terest payment or installment there of is payable. Any unpaid portion or installment of such interest payment on a Walker Plan Single-'Premium Note for the policy year during whLch death of the Insured
occurswill be deducted from the sum payable under this policy. Upon default in payment of any interest on any indebtedness securedby this Policy due subsequent to the first' twelve months' interest hereuiider,'this

Poli cg shall be~null and-void-'and all" payiatints forfeited to the Company except as herein provided."

_-..,- It is clearly apparent from a reading of the abode quot.s&portions of the policy~'that'Texas State Life InsuranBe,,. Companyis writing insuranceupon a"'planother than'the %eek- l~.6r, mijiithlg~.prem~ums

planq,I.L

It is therefore the~'bpiniofi-'of this-a~epartment

that Texas Stete'Life~Insurance"~Company hii's-‘~- noauthority to write insuran'ce upon the "WalkerSingle Premturn Payment Plan," as outlined in said policy.Ronorable George Van Fleet, page 4 o-2652

Very truly yours

ATTORNEY GENERAL OF TEXAS

WJF:AW:wc

,. APPROVED AUG 28,,1g40 s/Grover Sellers FIRST ASSISTANT ATTORNEYGENERAL By s/W% J. Famiirig Wni.J :'Fannlng Assistant

Approved Opinion Committee By s/BWB Chairman