OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN 4-G- -- Honorable CharleyLockhart

State Treasurer Austin, Texas _ Dear'Sir: t eo

opinion HO. O-2956

Your recent requ on the above stated questi ion of tl*o depaptsl=nt

0tter addr8sS8d ter C. Wooclward, Comissionors, n regard to deposits under provisions of orty-sixthLegislature. ou note carefullythe condvise us a3 to whether : the State Traasurervould be ittod under Senate Bill 135 to ac-~, dei7ycorlng

ours) ter of Jlonorab%

Ifalter C. Woodrrard,

chair;acm n3urenc8 C~mdssionors attached to your letter read3 as follow31

"In prormlgatln~rule3 and reEul.ntlous for tho purpone of carrying out t!le purpooc3 of Scnate Bill 155, the E3oa.rcl

of Iilvurance

Comisoloners, by authority delegated to it ti&?i- Sectiozi

25, i3sued en 0ffPcla1 order T?hich read3 in part a3 follows~,

/“-

- Honorable Charley Lockhart, Pago 2
@'The first annualpremium paid 'by a new member, or assessments paid in the first year by such new member, msy be consideredas a membershIp fee, but in such case the associationis required to pay out of the Expense -Fundall claims occurringon policies Sn their first year,' 'It now becomes necessary for the purpose of safeguardinsthe interest of first year policyholders to require such associationsto make a deposit to be held as a guaranty fund to insure payment of claims arising in the first policy y8ar. (It should be rememberedthat a small per cent of mutual associationselected to adopt the annual membershipplan,) "The laws prohibit the payment of claims arising in one group or class from funds belonging to another'groupor class, The deposits now held by the State Treasurer in accordance with Section 6 of Senate Bill 135, vere made vith funds belonging to other thsn first year policyholdersand could, therefore,be used for their benefit only. 'In reqdiring such associationsto make deposits to be held in trust for the purpose of guaranteeing the payment of claims that may not be paid from Mortuary Funds in which first year

. policyholdershave no Interest,the Board is confrontedwith the necessity of providing an authorized depository. "Inasmuch as first year pol.lcyholders of s&h associationshave no lawful interest in the deposit now maintained,and in the light of the lav which requires that a deposit for the protcction of policyholders1 benefitsbe made with the State'Treaourer,

you are respectfully requested to give considerationto the acceptanceof such deposits for the benefit of policyholder: whose interests are not otherwise safeguarded.

FOP the purposes of this opinionwe do not think it necessany to pass upon the conclusionsas stated in the letter.

. . .:

._

i
,0Y
. HonorableCharley Lockhart, Page 3

last quoted above;

Article 4374, Vernon'sAnnotated Civil Statutes SpeCiiiCally

provides: "

....The treasurer shall not keep or receive Into the buildings, safes or vaults of the Treasury any money, or the representation of money, belonging to any individualexcept In cases expressly provided for by law..., After carefully consideringSen*t&:Bill No. 135, Acts of the 46th Legislature, lgjg, ve find no provisions thereinauthorizingthe Board of InsuranceComnmiss.'.oners to require the deposit mentioned above. Neither do we find any providionin said Act authorizingthe State Treasurer to acC8pt and hold as custodian ths additionaldeposit~abovcreferred to. /-- Therefore,your question is respectfully ansuorcd In the negative. .

Trusting that the foregolng fully answers your ln-

. . quiry,ue are

. Very trulyyours ATTORNEY GEIE3RAL

OF !LTXAS BY a14.h-cu&

Ardell Wlllams : Assistant
All :Ali :

-APPROVEDDX 14, 1940 U%d c ATTORNEYGEBRRAI,

OR TEAS