Untitled Texas Attorney General Opinion ( 1940 )

TEEATBXB-Y GENERAL
OFTEXAS
AUSTIN H;TEXAR
GERALD C. MANN
Honorable Walter C. Woodward
Life Insurance Commlsslon
Board of Insurance Commission
Austin, Texas
Dear Sir: Opinion No. O-2390
Re: Union Burial Club of Free-
stone County.
Your request for an opinion of this department has
been received and considered. We quote from your letter as
follows:
"I am enclosing a letter received by this De-
partment from the Honorable Bowlen Bond of Fairfield,
Texas, and our reply together with constitution and
by-laws of the Union Burial Club of Fairfield, Texas.
"The reason I am referring the matter to you
Is that Mr. Bond asked that we submit the matter
to the Attorney General to determine if your De-
partment takes the same view of having the Union
Burial Club secure a permit and operate as an in-
surance organization as Is taken by this Department.
'In this connection may I call your attention
to Chapter 8A, mutual assessment life insurance com-
panies, Article 4859f, Section 6B. This particular
law compels all organizations issuing Insurance con-
tracts to secure a permit from the Board of Insurance
Commissioners. I also direct your attention to
Senate Bill 135, passed by the Forty-Sixth Legislature,
which Is now Article 5068-1, section 1 of which tells
the type and kinds of concerns to which this particular
act Is applicable. In the opinion of the Department,
the Union Burial Club would come under the law as an
insurance organisatlon and should be required to
secure a permit and operate thereunder.
"Please study the enclosed constitution and
by-laws of the Union Burial Club and advise the
Department If our position is correct Fn requiring
the said Union Burial Club to secure a permit from
this Department."
Hon. Walter C. Woodward, page 2 O-2390
The adopted Constitution and By-Laws of the IJnios
Burial Club reveal that:
"Article 2. The object of this Club shall
be to promote Benevolence, Charity, Fellowship
and Brotherhood among the membership; to help
sick members and to 'bury the deceased members.
"Article 4. The officers of this Club shall
be President, Vice-President, Secretary, Assistant
Secretary, Treasurer, and other officers as a
majority of the Club may from time to time desire.
"Section 3. It shall be the duty of the
Secretary to keep a fair, full and accurate re-
cord of the proceedings of each meeting, and
maintain and keep a permanent record of the same;
keep a record of all monies received by the
Treasurer and the amount and purpose and to whom
each amount paid out is made; report the financial
condition of the Club when requested by the body;
and to turn over all minutes and records to his or
her successor when duly elected.
"Section 5. The Treasurer shall keep and
hold all money received by the Club, and shall
deposit the same in some'bank deslgnated by the
Club to the credit of Union Burial Club of Free-
stone County, Texas; to keep a record of the
money received, by whom donated and the date there-
of, and a complete record of all money paid out
and to whom paid and the date and purpose there-
of; make his or her report when requested by the
Club; and turn over to his or her successor all
records, reports, etc., when the same has been
duly elected by the Club.
"Article 7. All applications of members
for sick relief benefits, funeral benefits, and
any and all requests from members of the Club
for financial aid or assistance shall be addressed
to the benevolance of this Club.
"Article 11. The Club shall donate to dls-
tressed and sick members upon the recommendation
of the Sick Commlttee, which Committee shall be
appointed by the Club. Any member who has not
donated to the Club in the past three consecutive
months shall not be entitled to a donation from
the Club.
, -
Hon. Walter C. Woodward, page 3 O-2390
"Article 12. The President shall appoint
a Committee which shall be known as the Relief
Committee whose duty it shall be to visit the
sick members of the Club, investigate their
condition, and to report to the Club. It shall
be the duty of a member when he or she gets
sick to communicate with the Chairman of the
Relief Committee, or any member thereof, and
make application for relief if desired.
"Article 13. The President shall appoint
a Committee of three members which shall be
known as the Funeral Committee. It shall be the
duty of the Funeral Committee when notified of the
death of a member of the Club to investigate the
books of the Secretary and determine therefrom
whether said deceased person is a member of the
Club in good standing. If the deceased member Is
In good standing and Is entitled to funeral
benefits, then the Funeral Committee shall make
its recommendation to the Club, and the Presl-
dent, Secretary and Treasurer shall draw on the
funds of the Club such amount as the Funeral
Committee has found the deceased member deserves.
"Article 14. When any member fails to
make a donation to the Club for three consecu-
tive months, his or her name shall be dropped
from the rolls of the Club by the Secretary at
the end of the third month, and such member
shall no longer be a member of this Club in good
standing. Such member may become reinstated by
complying with the Constitution and By-laws and
the rules and regulations of this Club.
"Article 18. Section 2. The Club may
adopt any rules or regulations not inconsistent
with the provisions of the Constitution and By-
laws l * * and any member who fails or refuses
to abide by such rules, regulations and orders
shall automatically be dropped from the member-
ship roll and shall not thereafter be entitled
to any of the benefits of this Club unless and
until he or she Is reinstated under the provi-
sions of this Constitution and By-laws and the
rules and regulations of this Club.
"Article 19. Section 1. Burial benefits
that may be paid on the funeral of the members
of this Club shall be as follows: Not more
.
- .
Hon. Walter C. Woo&ward, page 4 O-2390
than $150.00 when the membership of the Club
is 70 or more; not more than $75.00 when the
membership is 50 or above and~not more than
70; not more than $50.00 when the membership
is less than 50 in.number.
"Section 2. Sick benefits may be paid to
members of the Club when the same has been re-
commended to the Club by the Relief Committee
not to exceed $1.50 per week to any member."
Art. 5068-1, et sep, Vernon's AnnotateKCivll
Statutes governs so called Mutual Assessment Companies.
Section 1 of that article provides:
"This,-
Act shall apply to and embrace all
insurance companies and associations, whether
Incorporated or not, * * * * * whose funds are
derived from the assessments unon Its * * *
members, and shall, in fact, apply to all life,
health and accident companies or associations
which do not come within the provisions cf
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
Texas. This Act shall include local mutual aFd
associations; statewide 1Lfe; or life, health,
and accident associations; mutual assessment
life. health and accident associations: burial
associations; and similar concerns, by'whatso-
ever name or class designated. whether snecifically
named herein or not." (Underscoring ours)
Section 2 of Article 5068-l gives the following
definitions:
"'AssocLation' shall refer to and include
all types of organizations, corporations, firms,
associations, or grouts * * *' (Underscoring ours)
I'+* * + *
"Member' shall include policy holders or
any persons insured by an association, bv wh:t-
soever means the Insurance may be effective.
(Underscoring Ours)
We find that the Union Burial Club does not come
within any of the exceptions announced in section 1 of Art.
5068-1, supra. Consequently, it is our opinion, and you are
Hon. Walter C. Woodward, page 5 O-2390
advised that the constitution and by-laws, as quoted above,
places the Club and its contemplated activities within the
defined scope of that Act.
Art. 485gf (6b), Vernon's Annotated Civil Statutes
provides that it shall be the duty of the Life Insurance Corn:
mission to require "any corporation, person, firm, assocla-
tion, local mutual aid association, or any local association,
company, or organization to have a certificate of authority
before being authorized to carry on any insurance business
in this State."
Trusting that this fully answers your inquiry, we
remain
Yours very truly
ATTORNEY GENERAL OF TEXAS
By s,fWm. J. Fanning
Wm. J. Fanning
Assistant
By skGrundy Willlams
Grundy Williams
GW:RW:wc
APPROVES JUNE'll, 1940
s/Gerald C. Mann
ATTORNEYGEWERAL OF TEXAS
Approved Opinion Committee By s/BWB Chairman