Board of Inmlranoe CQPaissioaer8

AImtan, Texas &teaticmryn. J. J. T&i&

&tlemear OpinionHo. 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 "burialserviaecontract"desired to be issued

by Earvwon and Cole, a Funeral Home, ooaoerniag

whiab you requestan opinionof *in department ar to whethermoh proposedeontraut my issue ia Texas. From other eorretpondemeaddreas*$ to yam and attaahedto the request, me may safelyamtae 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'theproposed oontrmt, wherebythe "funeral hors" agrees to f'nmirhas provided ia the oontrqat,

a "mtmtdard

funeralrenioe.acbordiag to orirrent lirts of prioes thoreforoa 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 statedpurpoete 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 beingdesfgmhd tv wf8b (L %taaUa~ Amoral sorvioe"

and whiah it agree6to do so omtiageat upon the daath of the payer or members of the fauclly smed thereia,

the payor agreesto assign over the prooeeds

of the life iamranoe peliay ia mob amountas designated im *o fa0e of the oertifioate. It is to be noted that the funeral home who isauesthe 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 whereinthe f'ua*yU hemm is nude fke truetee beaefioiary,

lmt alrro

the ooatbuatioa ef aaoh policy in ions. Iu this ooaaeotiom,

the prapomedoolltixot 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 furtherstated thereinthat in the wmzt death oomre under oireumstaaoes or ooaditioaa

expre6sed

in the policy, wah aa euioido, reliscring

the iaeuranoecxmpmy fro01 liability

for paymSnt,~w funeral semi- is $0 be rendered. Se0tion 23 of SenateBill 136, nupra,iaoorporated in Vernon'sBoard of Iasurauoe Cormnissioasrs,

pago 2 (O-2780)

Civil Statutes,

uudsrArtiolo 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

partlyer uholly in morohaudiss

or wrvieos, sot in exosssof One aadrsd snd Fifty #150&O) I)ollaks,

or the value thereof,am herebydeolared 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 Chapter274, aate of the For+ fir8t Lsjciatlatme, 1829, and amendmanta thereto,

and this A&. It shall bs unlanfulfor any individual, individuals,

firms, co-partnerships,oorporatione,

or associatiolie,

other than those definedabops, to mgags in the ?au?iaees

of providiag

burial or funeralbenefits, which under lrny

airsumstsnoee

map bs paid wholly or partly in merchandise or servioos.0
Santioa 1 of said law, providesin part:
"This A& &ml1 apply to and arbraoeall insuranae oaspanies

and associations, whether ia0Qyporatsd or not, which issuspolioies or oertifioates

0f insuranos on the lives of persons, or provide

health and aeoidsmt mef$tp, upon the s0-oallod

mutualassessment 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, Chapter5, Chapter 7, Chapter8, Chap tor 9, Chapter18, Chapter 19, or Chapter20, Title 78 of the Revised Civil Statutes

of Tsxas. This Aot shall includelocalmatual aid aseooiatioae; state-nids

life; or life, hsalth and aooident assooiatioas;

mutual aeeeesm~t life,healthand aooident aseooiatione;

burialassooiatioas9 and similar

oonoof~~s,

by uhatsoewr H(LBO or classdesigaatsd, nhethsr 

### speoifical4 aamsdherein or not.*
The,nordsoertifioatss a8 used ia the abov% esotionis defined in Seotion2 as *shall inolude any insuranoo policy or contract of ineurmoe, oertifioate

of membership

or other document

throughwhich insuranoe is effsoted

or svideaoed."
Section24 of the lar provides: spolisiee

or oertifioatoe

issuedbg burialassociation8 shall providefor paymentof the benefitin osrtainstipulated 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 insuredshall at the time said polisy it issuedslest to haw smue paid in oash. Ths pslla~r shall shw in nitiag the eleotion

made. If the aseooiation issuingsaid poli0y shallfail 0r refuseto furnishths 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 attorneyin fact of any aseeoiation under this'Aot,~or &y other person,shallviolate q of the prtiisioms of this Aot not s$boifioally oet out in Seotioas26, 27, 28 aud 29'of this *st, he shall he punished

hy fine not to exoeedFire 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 furnishthe obligeo, or all of the latterts

mere relativeo,

at death,a burialrea8ouably 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

benefitsiasuraaoe 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. WiohitaY. 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 matterby what name it may be oalled. CemsonwalthV. 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 ServioeCorporation V. 8tete, 56 S.U. (2) 209.

The lsnguage

of ths provisions

of Artiole 6068-1,abow quoted, is couohedin geaoral

torms suffioiw&ly broad in scope to iaoludeany ad all kinds of oautraots, oertifieatoe

or ether dooumeata of similar nature w the oae presented

here,whioh evidmoes, importsand is desi@ed to effeotuate insuranoe. There is a promise to performa valuable~orrioeoaatingent on the dsatk of the party or parties. The eoaeidoratioa is the assigned

proceeds

of the iasaruroe

pelieynhieh ir sought te b effootuated by the oortifieate and kept alive by payments mad0 to the oompany. Tko faot that no weekly,monthly or anuualpayment is paid direotto the.- ,-

. -

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

funeralhome is not materialin oonsidering whoiiher

or mot the 4ontraot in questionis on4 of insuranoe within the provIsions of Artiole 5068-1, SUpr8.

It is therefore the opinionof this departmmt that the oontraot pr484nt4dd,

proposed

to b8 issuedby &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.

Yoursvery truly

ATTORHEYGEEERAL

OF TEKA6
I)Jr /s/ Ilbp.

J. I4.

King

APFWVKD DEC 4, 1940 /S/ tiraldC.Mann ATKIRIBYGEEERU OFTEUS BI. J.B.King Assistant