Court Opinion

ID: 4134073
Source: CourtListenerOpinion
Date Created: 2017-02-18 01:45:41.720768+00
Date Added: 2024-06-11T12:35:12.876359
License: Public Domain

Hon. William G. Button            Opinion No. W-595
Chairman, Board of Regents
East Texas State University       Re: Whether the employees'
Commerce, Texas 75428                 contributions under the
                                      Optional Retirement Pro-
                                      gram  (Article 2922-li,
                                      V. C. S.) may also be used
                                      to purchase life insurance
                                      benefits.
Dear Sir:

     You have reauested the opinion of this office concerning
the above question.  In connection with your request you have
furnished us with the following information.

          "This request has come after a recognition
     on the part of the University Insurance Committee
     that most of the faculty who have exercised
     their option to go with the Optional Retirement
     Program (ORP) have not taken insurance to cover
     the death benefits they are surrendering when
     they leave the Teacher Retirement System of Texas.
     The Committee believes that part of this reluctance
     lies in the fact that currently a faculty member
     would have to pay for such coverage, in addition to
     the regular six percent contribution he makes to the
     ORP. The University believes that the law actually
     permits the various carriers to offer such life
     insurance death benefits within the program.   HOW-
     ever, it is felt that the Attorney General's opinion
     is needed to make this clear.

                         -2835-
                                                                  .

Ron. William G. Button, page 2 (M-595)

          "Our belief that this inclusion of life
     insurance death benefits within the ORP is based
     upon the following factors:

     "1 .    The title of the Act, as contained in the
             Session Laws 60th Legislature Laws 1967,
             page 1955 reads:
             'An Act concerning an optional retirement
             program for teachers and administrative
             personnel employed by state-supported
             institutions of higher education and annuity
             and insurance contracts issued for these and
             related purposes: and declaring an emergency.’

     "2 .    Section 1 of the Act uses the broad language
             'Retirement Program' as opposed to the more
             restrictive 'Annuity,' and speaks of an
             intention to provide 'full and complete
             retirement benefits.'

     “3.     The defined term, 'Optional Retirement Program'
             speaks only of 'annuities.' But, Section 4.
             which authorizes the purchase of 'annuity
             contracts,‘ ignores the defined term and refers
             to 'annuity and group insurance contracts made
             pursuant to a benefit proqram  authorized by the
             Governing Board,' as if to recognize a distinction
             between a strict annuity and an annuity contract
             containing special features adding up to a
              'benefit program' as opposed to the defined
              'Optional Retirement Program."'

     We quote the following pertinent provisions from Article
2922-li, Vernon's Civil Statutes, the Optional Retirement
Program:

          "Sec. 2.  As used in this Act,     unless the
     context otherwise reguires:

            . " .a..
              II. ...

                            -2836-
.   ’

        Hon. William G. Button, page 3 (M-595)

                  "(f) 'Optional Retirement Program' means the
             optional retirement program created by this Act 9
             provide fixed or variable retirement annuities.
             including retirement unit annuity certificates
             of participation for faculty members.
                   II
                        .   .   .   .

                  "Sec. 4. In administering the Optional
             Retirement Program a Governing Board may provide
             for the purchase of annuity contracts from any
             insurance or annuity company qualified and admitted
             to do business in this state. Any life insurance or
             annuity company aualified and admitted to do business
             in this State shall be exempt from the payment of all
             franchise or premium taxes as to all annuity or croup
             insurance contracts made pursuant to a benefit proqram
             authorized by the qoverninq board of an institution
             of higher education, or by any private non-profit
             educational institution of higher learning, which
             benefit program is paid for in whole or in part from
             the funds of such institution." (Emphasis added.)

             We first note that the definition of "Optional Retirement
        Program" contained in Section 2(f), supra, does not encompass
        a life insurance feature.   If the Act contains any authori-
        zation for the inclusion of life insurance as a part of the
        Optional Retirement Program, such can be found only in
        Section 4. A close analysis of the terms of Section 4 reveals
        only an authorization for annuity contracts, since the sentence
        that contains the phrase "group insurance contracts" relates
        only to the exemption of insurance companies from certain
        franchise or premium taxes.

             We are unable to infer an intent to alter the expressed
        definition of the term "Optional Retirement Program", so as to
        include the authority to purchase life insurance on any basis.

                                        -2a37-
                                                                 1   .

Hon. William G. Button, page 4(*595)

    As  further discussion of this problem, we note from your
letter of request that it was contemplated that the life
insurance protection would be written as an integral part of
the annuity contract purchased by each individual faculty
member.  Even assuming the most liberal construction possible,
Section 4, supra, could only be construed as authorizing group
life insurance, and not individual policies. Going even
further, we observe that State colleges and universities are
specifically authorized to enter into group life insurance
contracts on behalf of all their employees, by virtue of
Article 3.50, Texas Insurance code. See Attorney General's
Opinion M-502 (1970). Life insurance protection is thus
available without the necessity of involving the Optional
Retirement Program.

     You are accordingly advised that it is the opinion of
this office that the Optional Retirement Program authorized
by Article 2922-li, Vernon's Civil Statutes, is limited to
fixed or variable retirement annuities, and the statutory
program does not contemplate the life insurance feature.

                            SUMMARY

               The Optional Retirement Program authori-
          zed by Article 29227li, V.C.S., is limited:
          to fixed or variable retirement annuities, and
          the statutory program does not contemplate the
          life insurance feature.

                                         General of Texas

Prepared by Malcolm L. Quick
Assistant Attorney General

                        -2838-
Hon. William G. Button, page 5 (M-595)

APPROVED:
OPINION COMMITTEE

Kerns Taylor, Chairman
Bill Allen, Acting Co-Chairman

Jack Sparks
Fielding Early
Alan Minter
John Richards

MEADE F. GRIFFIN
Staff Legal Assistant

ALFRED WALKER
Executive Assistant

NOLA WHITE
First Assistant

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