Board of Inmlranoe CQPaissioaer8 

AImtan, Texas 

&teaticmryn. J. J. T&i& 

&tlemear Opinion Ho. O-2780 

Be: Whether the proposed oontraof 

of Barvesoa and Cole, Fbrt lkmth, 

Texa6, is ome of iamrsmoe. 

Relative to the subjeot matter of your oerrespondenoo under date of 

September 24th, there ir sulaxltted a proposed "burial serviae contract" desired to be issued by Earvwon and Cole, a Funeral Home, ooaoerniag whiab 

you request an opinion of *in department ar to whether moh proposed eontraut my issue ia Texas. From other eorretpondeme addreas*$ to yam and 

attaahed to the request, me may safely amtae that the “iheral home* OT 

ooatraotor has not oomplied'with the provisioa~~ of Senate Bill 136, 4Sth 

Legislatswe, Se&ion 23 thereof. The question '10 are sonfronted with, 

therefore, ia whether or not the issuan00 of a 0wtifioate mob as'the proposed oontrmt, whereby the "funeral hors" agrees to f'nmirh as provided ia 

the oontrqat, a "mtmtdard funeral renioe.acbordiag to orirrent lirts of 

prioes thorefor oa file in the ofiloe of Earresoa and Cele at the time of 

death," i8 within the prtiaiom of Seoticm 23 of S-ate Bill 136, 46th 

Legirlaturo, as being a aoatraot of issurmae. 

In view of the stated purpoete of the propored Imrial somioe owtraot 

presented, m deem 5% Wmepw~sary to oopy or rootate herciq fts varims previsioas. Tke do& @m forth suMtaxrtlally an und~img wb1-6~ tka 

funeral home, in 0oaeidsratioar of being desfgmhd tv wf8b (L %taaUa~ 

Amoral sorvioe" and whiah it agree6 to do so omtiageat upon the daath of 

the payer or members of the fauclly smed thereia, the payor agrees to assign 

over the prooeeds of the life iamranoe peliay ia mob amount as designated 

im *o fa0e of the oertifioate. It is to be noted that the funeral home 

who isaues the artifiaate is designated trustee benefioiary. The funeral 

hame olainm 00 insura%le~ interest until death oo0ura, and the effeot of 

this eertifloate aa an assignment is dependent spq sot only the effwtuatlag of the pollmy of inmmanoe wherein the f'ua*yU hemm is nude fke truetee 

beaefioiary, lmt alrro the ooatbuatioa ef aaoh policy in ions. Iu this 

ooaaeotiom, the prapomed oolltixot prmides that the lapse of the polioy of 

iasuraaoe for mm-pegnent of the premiumta the inmraaoe mm@, wids the 

contraat and reinstatement of the poliay reixtmtatea the ooatraate It i6 

further stated therein that in the wmzt death oomre under oireumstaaoes 

or ooaditioaa expre6sed in the policy, wah aa euioido, reliscring the iaeuranoe cxmpmy fro01 liability for paymSnt,~w funeral semi- is $0 be 

rendered. Se0tion 23 of Senate Bill 136, nupra, iaoorporated in Vernon's 
Board of Iasurauoe Cormnissioasrs, pago 2 (O-2780) 

Civil Statutes, uudsr Artiolo 5068-1, provides: 

'Sec. 23. w individual, individuals, firms, eo-partasrehips, oorporatious or assooiatioae doing the ksiuese of providing burial 0r funeral 

benefits, uhioh under any oirGlmatsncss may bs payable partly er uholly 

in morohaudiss or wrvieos, sot in exosss of One aadrsd snd Fifty #150&O) 

I)ollaks, or the value thereof, am hereby deolared to bs lmrial oonpanies, 

assooiatioas or sooisties, and shall organlao under pro@.sioas of Chapter 

274, Aote of the Forty-First Legislature, 1929, and snsadnsnts thereto) 

and shall opsrats under and bs governed by Chapter 274, aate of the For+ 

fir8t Lsjciatlatme, 1829, and amendmanta thereto, and this A&. It shall 

bs unlanful for any individual, individuals, firms, co-partnerships, oorporatione, or associatiolie, other than those defined abops, to mgags in 

the ?au?iaees of providiag burial or funeral benefits, which under lrny airsumstsnoee map bs paid wholly or partly in merchandise or servioos.0 

Santioa 1 of said law, provides in part: 

"This A& &ml1 apply to and arbraoe all insuranae oaspanies and associations, 

whether ia0Qyporatsd or not, which issus polioies or oertifioates 0f insuranos on the lives of persons, or provide health and aeoidsmt mef$tp, upon 

the s0-oallod mutual assessment plan, or whose funds are derlwd fran ths 

aeeesssmnte upoa its polisyholdsre or membcre, and shall, in faat, apply to 

all life, health md aooideat o0s1psnios or aseoolati0ns uhish do not oome 

within the prmisions of Chapter 3, Chapter 5, Chapter 7, Chapter 8, Chap 

tor 9, Chapter 18, Chapter 19, or Chapter 20, Title 78 of the Revised 

Civil Statutes of Tsxas. This Aot shall include local matual aid aseooiatioae; state-nids life; or life, hsalth and aooident assooiatioas; mutual 

aeeeesm~t life, health and aooident aseooiatione; burial assooiatioas9 

and similar oonoof~~s, by uhatsoewr H(LBO or class desigaatsd, nhethsr 

speoifical4 aamsd herein or not.* 

The,nord soertifioatss a8 used ia the abov% esotion is defined in 

Seotion 2 as *shall inolude any insuranoo policy or contract of ineurmoe, 

oertifioate of membership or other document through which insuranoe is 

effsoted or svideaoed." 

Section 24 of the lar provides: 

spolisiee or oertifioatoe issued bg burial association8 shall provide for 

payment of the benefit in osrtain stipulated nsrohaudise and burial sersioo, 

rhish shall bs sohedubd in the poli0y or oortifioate and approwd by the 

Board of Insurance Comsissi0xmre aa being of the reasoaabls value as 8tatsd 

in the Paoo of the p0Iioy, unless the insured shall at the time said polisy 

it issued slest to haw smue paid in oash. Ths pslla~r shall shw in nitiag the eleotion made. If the aseooiation issuing said poli0y shall fail 

0r refuse to furnish ths merohsndiee and serui0ss provided for in the policrg, same shall bs p&d in Oashh. 
Board of Insuraaoe Comnissioaers, page 3 (o-2780) 

Section 31 of the law providesr 

"If axr~r director, offiaer, ageut, employee or attorney at law 

or attorney in fact of any aseeoiation under this'Aot,~or &y other 

person, shall violate q of the prtiisioms of this Aot not s$boifioally oet out in Seotioas 26, 27, 28 aud 29'of this *st, he shall he 

punished hy fine not to exoeed Fire Eundred (#500.00 

imprieomeat in the oousty jail net to exoeod six (6 1 

DollUs, or by 

months, or by 

both fine and imprisoztmont.s 

*%rial iasuraaoe is a oentraot ksod upon a legal ooasideration whereby the obliger undertakes te furnish the obligeo, or all of 

the latterts mere relativeo, at death, a burial rea8ouably worth a 

fixed sum. It is a valid ooatraot and oonstitutes life iasuranoe~s 

Joy00 on Imurauoe, Par. 701 Sissoa 61 rel. 3ardolillo V. Prata Uadert&lag Co., 49 B. I. 132, 131 At. 76. 

"3urial et funeral benefits iasuraaoe 16 valid, and being dekrmiuablo upon cessation of human lires. and dependent upoa their aontinw-Y* oonetitutes life 1asurauoe.s Couch on Imuraaoo, Vol. 1, See. 32, 

p. 47; Stats 7. Tillott, 171 Ind. 296, 23 L. Be A. (3.S.) 197, 86 2, B. 

68; State ex rol. Fiehbaok V. Globe C. & Undertaking Co.. 82 Wash. 124, 143 

pao. 878; Hkes V. State, 87 Hire. 261, 30 So. 783; State ox rol. Colenrn 

V. Wiohita Y. 3urialAssooiation, 79 Xan. 179, 84 Pao. 757. 

The oases generally hold that ooatraots by nhioh one par%, for a 

oon,sideration, promises to make a oertain payment of money upon the death 

of the other, whatever mey be the terms of payment of the ooneideration of 

the assured, er the mode of estlmtiag or seourin3 paymat of ths insuranoe money, it is still a ooatraot of iasurauoe, no matter by what name 

it may be oalled. Cemsonwalth V. Ilethsrbee, 106 l&es. 149; Stat. v. 

Benevolent Association, 18 Beb. 261, 26 Ii. 1. 813 Fvaer V. State, 69 Ten. 

276, 7 8.X 220. 

mether or not a oontraot is oae of insuranoe is to be determined 

by its purpose, effeat, eonteat and kpoz%s, and ziot nooowarily by tiha 

terminology used, and ewn though it contains deolarations to ths oontrary.s 

Fational Auto Servioe Corporation V. 8tete, 56 S.U. (2) 209. 

The lsnguage of ths provisions of Artiole 6068-1, abow quoted, is 

couohed in geaoral torms suffioiw&ly broad in scope to iaolude any ad all 

kinds of oautraots, oertifieatoe or ether dooumeata of similar nature w 

the oae presented here, whioh evidmoes, imports and is desi@ed to effeotuate insuranoe. There is a promise to perform a valuable ~orrioe oaatingent on the dsatk of the party or parties. The eoaeidoratioa is the 

assigned proceeds of the iasaruroe peliey nhieh ir sought te b effootuated 

by the oortifieate and kept alive by payments mad0 to the oompany. Tko 

faot that no weekly, monthly or anuual payment is paid direot to the 
.- ,- 

. - 

Board 04 Insurance Commissioners, page 4 (O-2780) 

funeral home is not material in oonsidering whoiiher or mot the 4ontraot 

in question is on4 of insuranoe within the provIsions of Artiole 5068-1, 

SUpr8. 

It is therefore the opinion of this departmmt that the oontraot 

pr484nt4dd, proposed to b8 issued by &rvoson and Cole, of Fortilorth, 

Texat, ia a oontraet of infIurUie0. We are not to be undemt4od a8 apprcrring the isruanos ai this type 4f propsscld'aontraat as m4 oomplyimg with 

the pr4vlsion8 of &tiole 6066-1, Vernon'8 Annotated Civil Btatutss. 

Yours very truly 

ATTORHEY GEEERAL OF TEKA6 

I)Jr /s/ Ilbp. J. I4. King 

APFWVKD DEC 4, 1940 

/S/ tirald C.Mann 

ATKIRIBYGEEERU OFTEUS 

BI. J.B.King 

Assistant