Bmrdoi Zmuxnce Coml44ioner4

Auetln, Toxw

oeatlsmen: Attentionr Mr. D. B. B4rroir



### open 210.

O-3015

: CWWmaction

of Articlrr 4725 

### wd 4706,concrraingrli&iblo InYertmefltr for life in4~cr companies and Sira or caogalty inrumnce companies in Texap, rmpectively, iuvolving puticiFattingce*l?lcatcr or mutIJa1 invertwnt cowern..

Wo4ckaowledg4 rmdlpt of your letter of J4nu4ry 2, 1941, repuertiag 4n opl&n from t&l4 &partment upon quertionr propounded, your’lattbr belng 4, follows:

“I amenclosing for your conelderation, in connectIon with the question.4 asked in thin letter, the following paperr:

“‘Proapectm of the HamIltonInve4tmentPlan, Cowolidation of Trust Indenture ~,ithe HamiltonDeposltore~Corporation audThe International Truet Company as to EamlltonTrust Sham4 and%m.llton Trurt Shares Certificate.!

“I amalso enclosing 4 Prorpectus of the Ma4sachuaetts Investors Trust and4 Proepectua of the Boeton Fund, Inc. The legality of investment of inlrurance companiesf funds in the Hamilton Trust, the Maseachueetta.Inve4tors Tru4t andthe Bo4ton Fund, ha4been queati-d andwe, therefore reepec~iWJy reque4t

an opinion from you cihoutthe matter.

“In connection with the HamiltonTrust, your attentlon’is directed to the statement madeon Page 4 of the Proapectumuh4rein there Is stated ‘Thle is not an lnveetment in the stock of the Eam11ton.corporst ion, ’ andto the statements nmdeon Pags 

### 6under the heading ‘Brief Sumwary of the HamiltonPlan.’ In a letter received bythia Departwnt and signed by the President of the Hamilton Corporation, there is itated: ‘There la no essential difference, 48 far as vc can eee, between investing in our iuna and investing ip the individual stocks.’Board of Ine-ce Cwncismiwerr, Page 2 (o-3015)

“Your attention is alro directed to the fact that & the Maseachusetto InveBtorr Trust andthe Boston Fund, Incorporztod, the imeeting companyor individual doer 10by purchsoa oharer of the trwt. 

### Youropl!Um ir respectfully requested in connection with this matter ae to the following quertionr:

“1. Maythe fun& of a TezaBLife Inrurance Company be invested with fho Hamilton Depositora Corporot.1~ 

### for Eamlltm& Trust Sharer Certificatea and if no, martthe variour rtoc&r purchased by the Hamilton Doporltorr Corporation be rtockr of cornpnniemwhich me eligible iammtmntr for the iundr of aTexw Life Iwuranc e Company in rccordence with the provi#ionn of Settioq 3 of Artlcle 4725 of our insurance ntatuten?

“2. Maythe fuuda 

### of a TexanFire or Cmuzlty Inmuroncs Company

be inveated with the Eemi~tonDeporitorr Corporation for Hamilton Tnmt Shares Certlficatee md 

### if 10, mumt the various stocka purchased by the Hamilton Depoaitorr Corporation be rtocko of companies eligible for investmontmby Texan Fire andCarualty Inmamnce Compenieain accordance with the pr&rlonn of Article 4706, Section D

### of oux ino-ce etatutes? In thir counection, it should be noted that the above referred to Article provide8 in effect that the tide 

### of aTexas Fire sqd Casualty Innurence Company may be @vented inthe etock of a solvent dividend pkying corporation Incorporated under the lawn of a state in which the lnaursnce compzny1~ duly authprized to conduct an inouremce bu8Meso.

“3. Maythe fund4 of a Texas Life Inourance Company be inveoted in the Worachuoettr Invemtorr Tnmt Sharer or Booton Fund, Inc., and if 10, ie it neces&wy that all of the mtocl&n ownedby the Trurt be hocka eligible for inrertint .by a Teur Life Insurance Company in accdrdssce with Article 4725 of our insurance rtatuter?

“4. Maythe fur&Uof 6Texar Fire or Canulty Inoursnce Company

be l+vorted ln Marrachurettr Involtorr Truot Sbareo or Booton !Und, Inc. Truot Sharer and if 10, muntthe rtocka owned by the Truot be eligible inventtmantr

### for the i~umace compnny in accordance with the provisiona of Article 4706 of oy ins.w- ~4 atrtuttss, and eat the Texan Fire or CamaaltyIneuranc& Company

be authorized to tranoact buoinern Fnthe State .of

_ Maaeachueettsl”

. gone of the certificates or &ares mentioned by you arc e.jiglble for lnveetzkentby the respective insurance compauieemention&

..,

Life inmrance compaqies incorpore,ted under the lavs Ff,t-i$q State

are authorized to invest their surplus, or znypart thereof, over.apd sboVeBoard of Inaurauce Comimioners, Page 3 (o-3015)

the aaount of their reaervel and capital stock, in the “capital stock, bonda, debenturea, b1U.r of exchange, or other 

### comercial notes or bill, and mecurltiem of any aolveat dividend-paying corporation which hannot defaulted in the paynmntof any of itr obligationr for a period of five (5) year,, + * it". (Vernon’8 Civ. Stat. Anno. Art. k725(3).

. .

Corporationa other than life, health andaccident lnauraace compaaier organized under the law.wr of Texar are authorized to invert their fundn over and above their paid-up capital ntock in: **“******* ***** ***** **(d) the**  ntockr or boadm or other rvidencer of iadabteduass of any aolvrnt dividend-payiq 

### corporation, incorporated under the lawa of thin State, or of the United Statea, or of my atate, country, or province lh which ruch compaaymaybe duly licenned to conduct an iaaurancs bunlaeaa.”

It w1l.l thur be reea 

### a security to be eligible for either clam of theas Texamcorporatlone muot be the direct obligation of the isruing corporation. The statutory definition of eligible rccurltier excludem, therefore, etock or rharee 

### evldenclng merely participating lntcrente by the holdem in the net profit0 if any of the imrulug concern. Sucha plea 11 in the nature of a mutual invectaent compaay.

Auexamlaation of the Ilterature of the renpective illruing cwpaniem in the present .case dlsclorea that their share8 or certificatetv ‘donot represent direct pecuniary obligations of the lsmlng companies, an contemplated by the statutes, but on the contrary, represent aerely psrticlpatiag interest6 in the net eamlnga (if any) of the issuing concera. For thin reason, such stock, shares, or cerbiflcates, by whatsoever namecalled, donot constitute ell.gible iuveatmeute for our inmraoce companies.

Moreover, with respect to the Massachuretta Investors’ Truot shares

or Boston Fund, Inc., lt la not clear that such concern is a corporation, within the meaningof that word, a8 it la ueed in our etatutee, or understood generally. Onthe contrary, there la evidence in the literature of that company lxdlcating it la a merevoluntary aseociation of ludividualn governed by trueteee and not by the board of directors contelnplated by the laws governing corporatione generally. If thin be true, its securitier are not eligible, because It is not a corporation, e.8required by the statutea above quoted. However that question maybe, its certificatea or &ares fall within the condemoation first above diecussed.

Wetmat thin will be a sufficient aumer to your lnquiriea.

AFTROVED

JAIi22, I.941 /s/ Grover Sellera Very truly yours Al7!ORNEf

G- OFTEihS FIRSIASSISTART By /s/ Ocie Speer ATl!oRi4RYoERERAG Ocie Spser Aaalatant OS-m-w APPROVRR OPIRIOR

Cm RY /s/ B.W.B. CRAIRMAN