Court Opinion

ID: 4143725
Source: CourtListenerOpinion
Date Created: 2017-02-18 03:36:57.183069+00
Date Added: 2024-06-11T14:34:25.685561
License: Public Domain

HotiorableGeorge Van Fleet, Actuary
Board of Insurance Commissioners
Austin, Texas
Dear Sir:            Opinion No. O-2652
                     Re: Article 4752, Ve6ndh% Aniibtated‘~ ~'
                         Texas CidiI'Stdtutel '-~LImited
                                                    . . .,~Capital
                         Stock Compahies --tiriE:hljr
                                                    or weekly
                         Pr'emlumsPlan - Single Premlum Plen.
       Your request for opinion has beeti~i%~I~~~~Md carefizl-
lg considered by this department. We quote from your request
as follows:
      uYour opinion iS respectfUlly &quested as
   to'wtietherWnot    a limited capital stoCk life,
   health afia acclaent insu~anc~'company;~organlied
   andoperating rn this State and subj'i3ct tb.th'e
   provisltiiisof AtitibX 4752 of our statutes; is
   authorized to issue a single premium policy.
   _
      "I Bm-eficlosing8 photostatic copy bf~such
   Kpolic~, ana we request your opinion about this
   matter.                                           _,     ,,~~
      -'Article4752, Vernon's Annotated Texas Civil Statutes
reads as follows:
            ^                                 _.
      "Companies may b6 incorporatd. in'the maiiner'
   prescribea by this-.chapt& for the-'lticotiporbtloti
   of life, accid&nt and health~iiisurancecompaiiies
   generallg,/which shall have~~.powep ~onlgto ttian@.~~
   ikitbtislnesswithlilthis'state, atid'to~w?l'ce'iiitiar-
   tinceonl?TOn the'weekly'br'mbtithlsoti‘emiutis    rrl&ii;
   and to-t&titieti6 pblicg'protiisfngto.pay^'mor&than
   one thou's&fid~
                 13611%~~iKth&-ev&t 'Of d&at% 6f"the
           friim ii~tui%l'c~us6s,nbp tioi+e'th&nW-t*o
   insiii-&i
   thotisanadoll&rs insthe'- ev'entof.a&atK'of f&y. .
   tigFsonTr6m acc'ragfital.CaU'8es,~
                                    which majr'issiie,'
   cdmb'iiiea'or'separ~tiily,Lffe, 'accia'ent“or-.health
   ltisi%rafic&~~poLZcl~s
                        wfth not less ~th&i anon  actii81.
   pald'up capU%l of twetity-fLveth6tisand'.dollars.
   All stich~cbmpanies'$hall'b‘e's~bj~dt'to    tillthe ~~
   laws regulating life insurance companies in this
                                                                   -   .

Bonorable George Van Fleet, page 2         o-2652

    State not Inconsistent wlth'the provisions of this
    article. Such companies shall not"be permitted
    to invest their assets in other than Texas Securl-
    ties as defined bg'the laws of thIs~State~regulat-
    ing the Investments of life Insurance companies.'
    (Underscorlng ours)
         We thlnk'that the term ‘"weeklypremiums plan" as used
in Article 4752; siipra,means a-~planof insurance where
prhmlilms are contracted  to be paig eaEh week and that like- ~"
wise a "monthly premlums plan rrmeans's planof insurance where
premiums are contracted to be paid each month.
                            ".
         Article 4752, supra, is clear and unambiguous: It is
the-.oplnionof this department that limited-capital stockyin-
surance companies sunder Article 4752, supra, may write insur-
ance only on the weekly ormonthly prem‘iums'plan. 'Insiirance~.
written by a Iimited capital stock~compahg on an "annual prem-
ium plan" or a "single premium plan" or any plan otherthain'.
the "weekly or monthly premiums plan", would-be Ln clear vi-
olation of Article 4752, supra. Your question is therefore
answered in the negatlve.                                   -.
       We have carefully examined the photostatic--copy-ofa-.~.
policy of Texas-'StateLife Insurance Company of Dalles, Texas,
a~limited capital stock company subject to the provLsions'of
Article 4752, supra, which you enclosed in-‘your letter, upon
which pollcy'you desire our opinion. We call your attention
to the following provisions of said policy:
      "This 'Walker Plan'.SlnglePremium Divifiend-'
   Policy' is issued at age-.    vears in considera-
   tion of the application therefor, the execution
   and delivery of a Walker Plan Single Premium Note
   bearing six per cent per annum“lnthe amoiint~ of
                              Dollars, calsulated
   on multiple-'monthlypremium payments, and the
   payment in advance to'the Company of the first
   twelve months' interest thereon of
   Dollars. ..(Said sum being-'interestunder this
   Walker Plan is not refundable,)
       "After this Policy has been in force.~one
    full year and the interestdue on the Walker
    Plan Single PremTum Note for the subsequently
    twelve months shall have been pa1.dand~on each
    anniversary'thereafter sudh~'.divldends
                                          and/or
    credits as shall have been apportioned by the
    Board of Directors to thlsPol'icy shall at the
    option of the Insured by (a) paid in cash, or
Honorable Qeorge Van Fleet, page 3           0 -2652

    (b) used In reduction of Walker Plan--SinglePre-
    mium Note, or (c) left with the Company--to
    aboumulate to'the-‘creditol the policy atsuEh
    rate of interestas the Board of Directorsmay
    determine." WhLle this Policy Is In~for&e'an&,.~
                                                   .~,
                                                     ~.
    before ~efeiiltifi'the~paJrment'of.any~~interest
    due‘siMh.ahdui&latea diviaends~may be~wlthdrawn
    in cash upon-'anyannlversary'of the.pijllcyif
    nbtpald or applied beforehand, or-shall be
    payable~upon ldaturlty.of'this~PoliCy'to the.
    person entitled to receive'the proceeds. If
    iio option Is selected the dividends will be
    applLed under option (b).

        "All interest payments onthe' Walker Plari'~
     Single Premium Note-'afterthe flrstare atwand
     payable monthly in advance at the Home Office
     of the"Company in theCIty df~DalIas, Texas, or.
     to's de^signatedcollector on-"orbefore aate'due;
     but ~ln any~case only‘% exchange for the Company's
     reheipt therefor,'"signeti  by the Presldent;Vlce-
     Pre5ldent,Jecretary,'Ass'Lstant~   Secretary or'
     Treasurerand countersIgned bysuch collec'tor;
     The"mod-eof interest payment may be ~changed'tb'~
     tbree~months, six months or twelve months ih ad-
     vance, but except as herein provlaea, the payment
     of any interest on the Walker Plan Single'PPemium
     Note'or installment thereof shall not maintain the
     PollCy in force beyond the date when the neistin-'
     terest payment or installment there of is payable.
    Any unpaid portion or installment of such interest
     payment on a Walker Plan Single-'PremiumNote for
     the policy year during whLch death of the Insured
     occurs will be deducted   from the sum payable under
     this policy. Upon default in payment of any inter-
     est on any indebtedness secured by this Policy due
     subsequent to the first'twelve months' interest
     hereuiider,'thisPolicg shall be~null and-void-'and
     all"payiatints forfeited to the Company except as
     herein provided."
 _-..,- It is clearly apparent from a reading of the abode
quot.s&portions of the policy~'that'TexasState Life InsuranBe,,.
Companyis    writing insurance
l~.6r,mijiithlg~.prem~ums        upon a"'planother than'the %eek-
                          planq ,I.L
                                   It is therefore the~'bpiniofi-'of
this-a~epartmentthat Texas Stete'Life~Insurance"~Companyhii's-‘~-
noauthority to write insuran'ceupon the "Walker Single Prem-
turnPayment Plan," as outlined in said policy.
Ronorable George Van Fleet, page 4        o-2652

                              Very truly yours
                          ATTORNEY GENERAL OF TEXAS

                              By s/W% J. Famiirig
                                   Wni.J :'Fannlng
                                   Assistant
WJF:AW:wc
                   ,.
APPROVED AUG 28,,1g40
s/Grover Sellers
FIRST ASSISTANT
ATTORNEYGENERAL
Approved Opinion Committee By s/BWB Chairman