Court Opinion

ID: 4143926
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:39:13.418637+00
Date Added: 2024-06-11T09:36:30.646612
License: Public Domain

Hon. hlter  C. Voodward CNlnmn
~wo8dofT~ance      Com&rlonerr
      *
Dear sirs                       Opinion Jio. 04460
                                Ret: Whether the deaarlbed type of lmur-
                                      arm transaatlon violates  the ineur-
                                      Mae laws of Texa8 and whether It is
                                     within the charter powers of the
                                     United Travelers Insurance Compmy,
                                     Houston Texaa, to deal with an ln-
                                      dlviduai or oorporation ln the
                                     Mnner outlined.
              As a basis for preaentlng the above questions  for an
opinion of this department, we quote from your letter of June 18, where-
in you Qaks the request, as follows:
                “In the cases referred to it Is proposed that
      certain individuals or oorporatlons will provide their
      customers with insurance    usually accident Insurance,
      without cost to such CUB &omer8 upon the purchase of re-
      tail cominodltles.  The cost of the insurance 1s paid to
      an Insurance company by the individual or corporation
      selling the aomodlty,   In accordance   with the terms of
      an insurance contract issued by the lnsurancr company
      to the individual or corporation insurlhg the customers
      of the indlvldual or corporation.
                “The individual or varloua representative8   of
      the corporation are to be licensed agents of the inmr-
      ance oompany, and It is our request that you advise us
      at your earliest  convenienae whether or not in your
      opinion this type of insurance transaction violates the
      Insurance Laws of this State ln any respect, and whether
      or not it 1s within the charter powers of the insurance
      coupany to deal with an Individual   or corporation  3x1
      the manner outlined.”
                 Accompanying your request Is a certificate  form proposed
to be issued by the United Travelers Insurance Company, Houston, Texas,
dcslgnated as a conbined customer’s receipt and insurance policy,     which
states that the conpany agrees to lnaure the customers of Eaton’s Gulf
Serviae ofSlUdmore, Texas, by a group poliay of insurance No. 0208 under
the subject to tho tern-m and conditlone    OS'said policy and the appllca-
t ion there for.   The group @lay  form  Is not submitted with your request.
                  The plan proposed M stated ln go* request In certain
respects,    Is a semblance of the plan upon which group lnaurancc is
generally    orovlded by an emlorer   for the benefit of lta employees. It
Hon. Walter C. Woodward, Chomn,        Pagee2                      3-2463

Is to be observed that the corporation owning and controlling         ~~‘10~s
wrvlw      etetlona, oontraote    with the insurance aostpury for a groug
POllOY under and by VirtUb       of whlah It gurOhaw8 oertlflcatee    in book
lots, with laah aertlflaate       to be leewd as a policy or lneurence and
given free at its aervloe stations to auetomere upon their purehaae
0r the acsmaodltlea 0r the oorporatlon on lt~le at such statlone.        mu3
corporation or owners or the conmmditlce or group @Icyholders,          ln
this ree ct are propoalng to assume the statue of an employer under
a dsenera p” Iy reeognlzed group polloy,    ln which It pays the premium ror
each oertffloate      ieeued.   It aan be assumed that tha aorporatlon or
group pollayholder       aleo pay8 all of the coetebr    hendliag the lneurme
ror Its auatolaere.       Not only the group polloyholder paye to the ln-
wed    the prenhm due for each Uertiflcate        lemmd by Its a&ent, but it
also transmits, through its agent or servioe station attendant, the
pG8d.i     ior My extended ooverage the cuetomer may desire and pCkye l’or
         .
                 Viewing the proposed certificate    form, we may assume that
It  contains the tesentlal   provisions of the master group policy
provides for payment In lieu of all other indemnity, the sum of r 500.33
lnssedlat@Iy upon reoeipt of due proof of the death of the insured as a
reeult of bodily Injuries which are the sole cause of loss of life
effected   solely and excluelvcly    by violent external causes and solely
thz%mgh accidental meant during the coverage period of the certlflcate
War      policy,
               Under Title 76 Chepte3, Vernon’s Civil Statutes     en-
titled “Life, Health and Accident Insurance”, under which t’he a&ove
rimed company is Incorporated,  your attention is directed to Article
&‘64a, Sections l-6.   Section 1 of this Statute deflnlng group life
insurance provldeet
                “Sec. 1. Oroup Life Insurance Is hereby dc-
     clared to be that form of Llfc Insurance covering not
     lees than twenty-rive employees written under a policy
     lwued to the employer, the premium tor wfilch is to be
     paid by the employer or by the employer and employees
     jointly and lnaurlng all of his employees, or all of
     any class or alasses thereof determined by conditions
     pertaining to the en~Iiym?nt, for a~ounta of lnrmrmce
     based upon some plan which will preclude Individual se-
     lection,   and Sor the benefit of persons other than the
     employer; provided, however, that when the premium Is
     to be paid by the employer end employee6 jointly and
     the beneflta of the policy sre offered to all eligible
     employees,   not less than seventy-five   per oentum of
     such employees may be so insured.      For the purposes
     or this Act the membersof any labor union who are
     actively   engaged In the same oucupatlon shall be con-
     sidered employees of such union.      The provislonn or
     this Section, howeve?, ahall not appl;- tc Croup,,Insur-
     ame now In effect,    or to any renewals thereof.
                It seems to be well settled by the authorities  that a
policy provldlng ror payment ln case of aocldental death is, to the ex-
tent or such provleion,   to be deemed a policy of life insurance within
the mean-    of a statute having relation to life lneurance.    Logan v.
Fidelity  and Casualty Company of Hew York, 146 MO. 114 47 S.V. 948;
zimser   v Central Aaoldent Ineurenoe Comparq 207 Pa. 472 56 A. 1003;
Paoifla ktual   Life Xmurance Cwny       of Calirornla v. P&ker  et ux.,
71 F. (24) 872, and other authorltlee alted therein.
                 In the Logan oaea, eupra, the Suprem     Court   of Hleeouri
etatest

                “The promise to pay a weekly indemnity by an
     lneuranoe     aompany ln the event the Insured reoelvee
     8n injury     fmm an aacldent    not resulting     In death
     does not change the aharaoter of the agreement of
     the policy to pay a certaia other sum when the accl-
     dent results fatally,      whioh 18 life Insurance from
     accidental     causes, as the promise to pay a certain
     etlpulated sum to the insured (now contained in mtu’q
     of the pollclee      leeued b what 1s knm        es 'old line1
     life lneurance oompeniee f when tho Insured attains
     a given age or 5.n a definite        specified   time, and If
     berore the insured arrives at the age designated, or
     before the time fixed ior Its certain payment, he
     shall die from any came, accidental or otherwise,
     to pay his legal representatives         or eoms one named
     In the polioy     as bcneflolary    the amount etlpulated,
     Is nona the less life insurance became coupled
     Yith an investment or bond feature,          not found In what
     18 commonly known as a ‘8traIght          life insurance
     POllCY.
               Yhe calling of a contract of insurance sn
      ‘accident,    ltontlne,v  or lrerpler' life policy,  or for       that
      matter, by any other appellation that may be adopted
      for business or conventional uses or claesif1cation,
      cannot make a pCrllcy contalnlng an agreement to pay
      to another a sum of money designated upon the hsppening
      of an unknown or contlngent event, depending upon the
      existence 0r life,   lees a policy of lneurence on llfe.
      Ineurancc on life includes all pollclee    of Insurance
      in which the payment of the InsUranCe money ISContIn-
      gent upon the lees of life.”
              The particular group policy under consideration,     with
payment 0r the principal    sum contingent, depending uponthe existence
or life,  insuring a collection    of lndlvlduals  limited to the customers
of the grou policyholder,    is clearly not within the ecope of Section 1
of Article E764a above referred to.       Section 6 OS this law provldesr
                 “Except ae may be provided In this Act, Itshall
          be unlawful to make a contract of life insurance cover-
          lng a group In this State,”
                       it clear
                 We think         that the propooed plan or transaction,
involving the contract of ineuranca described,    is prohIbIted by the
above quoted provision   of the law.
Hon. Walter C. C;oodwa.rd, ?a.ge 4                              Q-24&

You are thererore respectfully advlsed   that group policy aontraots
gush aa that of the United Travelers Inmranae Company, Xourton
Texas, under and rubject to which aertlflaatee    are lsrrued insuring
the cutstoner of the Insured, are prohibited by Seation 6, Artlale
4764a, Vemon~a Civil Statutes, and in the opinion of thlr Depart-
ment, the writing or ouah tppe 0r lnarururae   18 without the charter
powers of ruah aorporatlon.
                                     Youra very truly
                                     ATTORNEYOENBRALOFTXXAS

APPROVED  AU0 12, 1949
I/ Orover Sellers
FIRST ASSISTAXT
AlToRNxYOENXRAL
Approved opinion   Comlttee   By sm      ChaIrman
This Opinion Considered and Approved In llmlted         Cmferencc