TBXEATILTORNEY GENEOF 7I3cKAs 

January 24~, 1961 

;: 

Honorable Henry Wade 

Dlst'lct Attorney 

Records Building 

Dallas 2, Texas 

DearMr. Wade: 

O$$ion No. W-986 

Ret Does the B6ard of Managers 

of the Dallas County Hospltal District have legal 

authnrlty, through an estabZlshed employee retirement 

program, to enter into a con- 

,tract with a mutual life lnsurance company to purchase 

life annuity ir+@ance policies 

on employees who have attained 

retirement age an? related ques- 

~'tlon. 

We have received your lett&'of December 21, 1960 en- ; 

t closing your opinion, No. 60-19, in which the Sollowlng questions 

are set forth: 

“1. Does the Board of Managens:'oS the Dallas ., 

County Hospital District have legal authorlty, 

through an established employee retirement 

program, to enter'lnto a contract with a mutual 

life insurance company to purchase life annuity 

lrisuriance policies .on employees who have attained retirement .age.". 

“2. IS your answer to Question, 1 1s In the afflrmatlve, and assuming that the Board has legal 

authority to purahase ,a group life Insurance 

policy for %ts employees, your opinion Is 

respectfully requested as.to whether this 

Board has, authority to pu&hase a group life 

lnsuranct policy Srom a muRpla1 life Insurance 

company. 

The answers to QuesHons 1 and 2 may be Sound ln.Attorney 

@neraJ'a Opinion No. O-924 wherein the Sollowlng language Is used? 

"We; therefore, feel-it Incumbent upon 

us to overrule conferenqe:aplnlon Noi 2880, 

Inasmuch as the express!language of our appellate courts In the cases quoted, written since 

the above numbered conference opinion, clearly 
Honorable Henry Wade, Page 2 (W-986) 

Indicate the opinion of the,learned Judge8 to 

be that polltlcal aubdfvfslone cannot legelly 

purchase ineurance from mutual companies because 

of Section 52 of Article III OS our Conatitutlon. 

We have been uiiable to perceive any possible dlstin&Ion In law between mutual tire Insurance 

and mutual employ&w 'llabfllty or Workmen's Compeneatlon Ineuranae Insofar 88 the Conetitutlonal 

~vlolon~ are agpllcable.:~ 

and, f'urthert . ,,.. 

"Mter care-1 and'&auat%ve Investigation 

o? a11 available authorltlc'a., we are of~opinfon 

and you are reepectfully advleed that DalUe .' 

Gounty cannot. legally purtire Inmaranae In mutual Sire or casualty eompanles; that suah purchase would Involve.taklng membershIp In or beaomlrig a Qtockholder In such corporation, aQQoaIatlon or company in dire&t violationof the 

provialona ot the Texas Constitution." 

!Phe above quotQd ianguage and the.result of this 

opinion was-fbuatalned in 1942 by the Supreme Co&t of T&U, 

which heldthat the Auf&In Ihdgpendent School DIrtrIot aould 

not purchase a poller from a mutual inauranae corpor8tIon and 

thi Court declared that the part oS Artiale 486Oa-8, Vernon’s 

01~11 Statutes, providing Sor purchatle OS muttaal~.I~~~ce by 

a polItI&il subdIvIsIon wao unconstltutlonal"In violatoon of 

dectioti 52 OS ArtPcld III oS the Texas Constitution'. 

then City of Austin. 

. 

In vliw of’ the roregolng, we agree with ycgr able opinion; 

evehold U&both Qaertloaa 1 and.2 should be ‘answered in the.nega- 

. 

The 80m-d 0r ha4pr 0r thQ Dali 

IbePftal DI&rIot, a polIt.ical eubdI%% 

b 

OS the State of Texas, may not enter Into 

a oontract to purchare iiri or retirement 

. . 

.;t 
^ . 

Honorable Henry Wade, Page 3 (w-986) 

insurance fr0m.a mutual dnsurance company. 

Seatlon 52, Article III, Texas .Con8tltutlOn. 

Your8 very truly, 

WILL WILSOW 

Attorney General of Texae 

Robert L. Armstrong 

Assistant 

RLA:hmc '.: 

APPROVED: 

OPINION coMMITTEFi 

W. V. Geppert, Chalrman 

John L, Estes 

Rll@y Eugene Fletcher 

Elmer McVey 

REVIEWXDFORTBBATTORNEYGBNHUL 

BY: Morgan Neabltt 

. 

i:.