Untitled Texas Attorney General Opinion ( 1945 )

‘738 ‘. : OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN QROVL” SLLLIII* -. Aly”“SV OCWlllL ,- . Xoaorable’ George B. Butler, Cheirman Dear Sirb ciotion, would said ons be operating In Of Art. 4875a-4, s.7 Ana related letter of reoent date under Chapter 9a, Title lroumatanoear ae is an officer or director. of” iation and.the other spouse an r direotor of another aasooiation? your answer be different if one of . the spouses owned all or a part Interest in the Funeral ~iome designated in the policies through which burial merchandise or service6 will be performed? aAn officer or direotor of each of two or more associations own an interest in the Funeral Eonie designated in the qolioies of the assooistions es the ones through whioh the burial. merohaudise and ssrviaes will be furnished? s ‘:i 739 soion:George B. Butler,’ page 2 - . “Two or more aesooiatione have designated the same Funeral Xoae as the one to furnish merchandise and servioes under the polioiee of the assooiation, but none of the offioere or direotors of the associations have any finanoial interest in the Funeral Home? . “1s it permissible for an agent to have an appoint- ment from two or more assoolations and to write a , policy in both aseooiationa on one individual? . “In. it permissible for two ~asaooiations to oooupy the fame quarters and share the maintenance expeneee of rent, utilities and so forth; may they Jointly employ 3. the came personnel to work for both associations and to pay them proportionately from each asaociation?n A&Sole 5068-1, Vernon*e.Annotated Civil Statutes, provide8 . .T. in part as follows: We&ion 1. Thie Act shall apply to and embraoe all insurance companies and associations, whether incorporated or not, which Issue polioles or certificates of insurance on. the live6 Of persona, or provide health and accident benefits, upon the ao-called mutual aaaesament plan, or whose funds are derived from the aaeeaamenta upon its polioy holders or members, and shall, in fact, apply to all life, health and aocident companieo or associations which do not come within the provisions of Chapter 3, Chapter 5, Chapter 7, Chapter 8, Chapter 9, Chapter 18, :Chapter 19, or. Chapter 20, Title 78 of the Revised Civil Statutes of Texae, This Act shall include local mutual aid associational state-wide life; or life, health and aooident associations; mutual aseessnent life; health and aooident a oiationa; burial associationsi and similar oono ne, by whatsoever name or olaas aeeignated, whether,/ a oifioally named herein or not,n(Undera.coring ours) .,’ .,. II* * * “SBO, 2. The follo&g. terma when used in this Aot ehall be defined: II* * * “~Assessment’ ehall include premiuma and mean any and,all money or valuable thing paid in oonslderetlon of &oh insuranoe as is afforded by the certifiCate. “‘Uemberahlp fee’ shall be the amount of the first assessment or assessments permitted by the Board to be placed in. the expense fund of aesooiations, represent- ing cost of soliciting or proourlne the member. II* * * ;. 740 , George D. Butler, page 3 *Sec. 12. Assessments when collected shall be divided. into at least. two (2) funds. One (1) of these .&all be the mortuary or relief fund, by whatever name it may be called in the different associations, from which-claim8 under oertificatea shall be paid, and to a limited extent the cost of defending oontested alains, and nothing else ; and the other funds ehell be the ex- pense funds from which expenses nay be Daid. At least sixty (6~;;) per cent of assessclonts collected, exoept the membership fee, must be plaoed in the mortuary or relief fund. The mortuary or relief funds may be invested only in such securities as are a legal invest- ment for the reser.ve funds of stock life inauranoe com- panies. II*.* * ‘. @Sed. 23. Any individual, inaieiauaLa, firms, co-partnershipa, corporations or asaooietions doing the business of providing burial or funeral benefits, which uwler any circumtances may be payable partly or’ wholly. in nerohandise or services, not in excess of One Wndred and Fifty (4150.00) Dollars, or the value thereof, are hereby declared to be burial companies, associations or societies, and shall organize under provisions of Chapter 274, Acts of the Forty-first Legislature, 1929, and a@n&ents thereto; and shall operate under and be ~;governed by Chapter 274, Aots of the Forty-first Legislature, 1929, and amen&vents thereto, and this Act. It shall be unlawful for any individual, individuals, firms, co-partnerships, corporations, or aaaooiationa, other than those defined above, to engage in the busi- ness of providing burial or funeral benefits, which under any oiroumatances may be paid wholly or partly in merohandise or servioes. %eo. 2J+. Polioies or oertifioatea issued by burial associations shall provide for payment of the benefit in certain stipulated nerctiandise snd burial service, which shall be acne&Led in thQ PllCY Or ztific*te and aDproved by the i30ard Of insurance comm:--wrs as being of tha re asonable value as stated in the faoe of the polioy, unless the i,insured shall at the time said policy is ie,eued elect to have 8aae paid in cash. The-policy shall show in writing the election made. If the assooiation issuing said policy shall fail or refuse to furnish the merchan- dise and services provided for in the polioy, aame 6hal3 be paid in cash.“~ (Underscoring ours) Art. 4875a4, V. k. C. a., providea: f: wTh+% ahall be no oonreotion between any two i aesoolationa operating under thle la%? eml no one I~ asaooiation ahall ooatribute anythlnc by way of i ; T salary or conpccaation to any exooutive offiosr for the purposes of ouoh other aesooiatlon.n r$ . Your first question wna answered in this departmnt~e ``1nlou lie. O-2879. Dy that opfniou, in affeot, we mid that t because there was 8 fanily relatioushlp between the offlcere ; 0s two burial asaopistiona, Art. 4875a4 waB not viclated. In andlwer to your eeoond queetion, it ia our opinion that in the sbsecoe of any statutory prohibition where on% ~pouee oxns an fntcroot ic or ouna all of 4 r’unsral ikw~ deal& Lstod in the polioy OS a burial assoalation through which burial sm9mndise ox eeruicsoare to be furnished, he, or the other B;OUBB,my serve as an offioer or direotor of such asoxietlon. In view of w&t WJ hove eald above, your third guctrtion Is anawcrgd in the negative. In view of our Opinion lie. O-2fV9, a copy of which was heretofore Sumiohud you, orid becciuse of what w have bald in mower to your aaoond e&d third quettlons, WC enawer y0u.r fourth qucstlon ln the negative. It ia our opinion that your fifth question should bo tnewerod in the a’ffirnative and It ia 80 ornxered. In answer to your sixth c;uestion, it itr our opinion that the sot of faots as stated doe6 not violate Art. kS7544,ae a Utter of law. Wa trust that the aboYe.nnd’fore&oing setlsfaotoril$ Wnera your inquiries. Pours very truly,