Untitled Texas Attorney General Opinion ( 1945 )


Menu:
  •             THEAITORNEY              GENERAL
    OFTEXAS
    Honorable George B. Butler, Chairman
    Board of Insurance Commissioners
    Austin, Texas
    Dear Sir:                  Opinion NO. o-6642
    R0: Construing Article 4764a,  V.A.C.S.,
    as to whether a group insurance
    policy issued to a flnanclal~ln-
    stltution is permitted to cover
    the lives of any number of borrow-
    ers from a flnancl~alinstitution
    less than all of them and more
    than 100 entrants annually.
    We have carefully considered your letter of June 5, 1945,
    requesting this department to render an opinion answerln cer-
    tain questions presented by~gou relative to.~Subdivislon7 3)
    Section 1 of Article 4764a,  Vernon's Annotated Civil Statuies
    of Texas. Your questions substantially restated are as fol-
    lows:
    1.   May a group oplicg be issued covering the
    lives of any number of borrowers from a
    financial Institution, less than all of
    them and more than fifty, and if so, what
    are the restrictions or regulations as to
    classification of such groups?
    2.   Should the premiums on such group policy
    be paid by the financial Institution out
    of its own funds, or may It collect pre-
    miums from the debtors for the purpose of
    paying such premiums?
    Your first question necessarily calls for an interpre-
    tation or construction of Subdivision (3) of Section 1 of the
    foregoing statute, particularly the underscored portion of
    said subdivision worded as follows:
    "Sec. 1. The following forms of life insur-
    ance are hereby declared to be group ll,felnsur-
    ante within the meaning of this Act:
    Honorable George B. Butler, page   2       0 -6642
    “(3) Life Insurance covering only the lives of
    all members of a group of persons numbering not less
    than fifty (50) at all times, who become borrowers
    from one financial institution, or who become~pur-
    chasers of securities, merchandise, or other property
    from one vendor under agreement to repay the sum bor-
    rowed, or to pay the balance of the price of the
    securities, merchandise, or other property purchased,
    to the extent of their indebtedness to said financial
    institution or vendor, but not to-exceed Ten Thousand
    Dollars ($10,000) on any one life, written under a
    policy which may be issued upon the application of
    and made payable to the financial institution or
    vendor or other creditor to whom such vendor may
    have~transferred title to the indebtedness as bene-
    ficiary, the premium on such policy to be payable by
    the financial institution, vendor, OP other creditor.
    Provided, that group life insurance Issued under
    this classification shall not include annuities or
    endowment insurance, The requirements set out in
    Subsection 4 of Section 2 of this Act shall not
    apply to this Subsection."
    It Is noted that the foregoing Subdivision (3).of Sec-
    tion 1 of the statute ls,taken from House Bill No. 326;Chapter
    349; of the General Laws, 48th Legislature, Act of 1943, p.
    604, the caption of which amendatory act provides:
    "AN ACT amending Section 1 of Chapter 101,
    Senate Bill No. 41, Acts of the Regualr Session
    of the Forty-second Legislature, as amended by
    Section 1 of Chapter 610, Acts of the Regular
    Session of the Forty-seventh Legislature, so as
    to make available group life Insurance to employ-
    ees of school districts in the State of Texas;
    and declaring an emergency."
    Article 3, Section 35 of the Constitution, provides:
    "No bill, (except general appropriation bills,
    *.......) shall contain more than one subject, which
    shall be expressed in its title. But if any subject
    shall be embraced in an act, which shall not be ex-
    pressed in the title, such act shall be void only
    as to so much thereof, as shall not be so expressed."
    It will be seen from the caption of the foregoing.~House
    Bill No. 326 that same amended Section 1 of Article 4764a;
    V.A.C.S., but in doing so expressed the sole purpose of mak-
    ing available group life insurance to employees of school dis-
    Honorable George B. Butler, page 3         o-6642
    tricts in the State of Texas, A paragraph authorizing such in-
    surance is found added to Subdivision 1 of Section 1. Section
    2 of the Act, being the emergency clause, expresses the fact
    that there Is no provision under the present law for school
    teachers and employees of the public school system to obtain
    group insurance, and the fact that the enactment of this act
    would make possible such group Insurance, and the fact that
    such insurance would be for the Interest of the public school
    system and the teaching profession of this State creates an
    emergency, etc.
    The authorities are numerous to the effect that a cap-
    tion of an act is deceptive and misleading which expresses a
    purpose to amend the statute in a certain partlcuiar when the
    body of the act goes beyond and purports to amend the prior
    law In other particulars. New substantive matter contalned
    In an amendment which Is not germane or pertinent to that
    contained in the provision amended, is invalid as legislation
    upon a matter not expressed In the title of the amendatory act.
    39 Tex. Jur. para. 48, pp. 102-4, and cases cited therein.
    Where a statute operates as an amendment of an earlier
    law, the effect of holding it to be unconstitutional is to
    leave the original enactment in full force'and effect. 'Culber-
    son vs. Ashford, 
    118 Tex. 491
    , 
    18 S.W. 585
    ; 16 C.J,S. para,
    101, pq 102, N. 61.
    Prior to the foregoing1943 amendment, Subdivision (3),
    Section 1 of said statue, as corkained InHouse Bill 1061, ".
    Chap. 610, Genera1 Laws, 47th Legislature, Acts 1941, p. 1346,
    provided:
    "(3) Life insurance covering only the lives of
    all members of a group of persons for not more than
    Ten Thousand Dollars ($10,000) on any one life, num-
    bering not less than one hundred (100) new entrants
    to the group yearly, who become borrowers from one
    financial Institution, OP who become purchasers of
    securities, merchandise, or other property from one
    vendor under agreement to repay the sum borrowed, or
    to pay the balance of the price of the securities,
    merchandise, or other property purchased in Install-
    ments over a period of not more than ten (10) years
    to the extent of their Indebtedness to said financial
    institution or vendor, but not to exceed Ten Thousand
    Dollars ($10,000) on any one life, written under a
    Honorable George B. Butler, page 4         O-6642
    policy which may be Issued upon the application of
    and made payable to the financial Institution or
    vendor OP other creditor to whom such vendor may
    have transferred title to the indebtedness as bene-
    ficiary, the premium on such policy to be payable
    by the financial Institution, vendor, or other
    creditor. Provided, that group life Insurance
    Issued under this classification shall not include
    annuities or endowment insurance. The requirements
    set out in Subsection 4 of Section 2 of this Act
    shall not apply to this subsection."
    It is apparent from the foregoing authorltles and we so
    hold that Subdivision (3) of Section lof the statute as lncor-
    porated In the foregoing 1943 act and appearing in Vernon's
    Annotated Civil Statutes, Supplemental Pocket Parts, 1944, is
    invalid, thereby relegating us in this opinion to consider your
    questions solely with reference to the original enactment of'
    Subdivision (3) as found in the earlier amendatory Act of 1941,
    H. B. 1061, 47th Legislature, last above quoted.
    By Section 1, Subdivision (3) of the 1941 Act applicable
    to borrowers of a financial institution, permissible group in-
    surance is defined as life insurance covering only the lives
    of all borrowing members of a roup of persons . D . numbering
    not less than one hundred (1007 new entrants to the group early.
    The only restriction OP limitation found in Subdivision (37 is
    that such insurance shall not be issued for more than $lO,OOO.OO
    on any one life; there must be 100 new entrants to the group
    yearly; the insured indebtedness of a member, If payable In
    installments, shall not exceed $lO,OOO.OO over a period not
    to exceed ten years and such group policy be issued upon ap-
    plication of and made payable to the financial institution
    or other creditor, transferee of the debt by the institution,
    as beneficiary. It is further provided that the premi~umon
    such group policy shall be payable by the financial institu-
    tion or creditor transferee as beneficiary and that such
    group life insurance shall not include annuities or endowment
    insurance.
    We find no language in Art. 4764a as enacted by the
    42nd Legislature, Acts 1931, and as amended by Acts of 1941, or
    any valid provisions of the 1943 Act, requiring or restricting
    a group life Insurance policy issued under Subdivision (3) to
    cover all of the borrowers of a particular financial institu-
    tion. Tither   do we find In the Act any regulatory power
    given the Life Insurance Commissioner expressly doc7'rn with
    such contractual relationships between the borrover oafa
    financial institution and the institution itself with refer-
    ence to the applicant for a loan paying to such institution
    Honorable George B. Butler, page 5        o-6642
    a portion or all of the cost of such group policy Insurance
    as applied to applicant's loan.
    In view of our holding invalid Subdivision (3) of Sec-
    tion 1 of Article 4764a, V.A.C.S., as Incorporated In Chap-
    ter 349, Acts 1943, 48t.bLegislature, and answering your ques-
    tion with reference to the prior law unrepealed by said amend-
    ment, Chap. 610, Acts 1941, 47th Legislature, General Laws,
    p. 1346, It is our opinion that a group policy issued under
    said Act 1s not required to cover the lives of all borrowers
    of a financial Institution exceeding 100 new entrants yearly,
    More than one group policy ma-7be issued upon separate appll-
    cation by a financial Institution,setting forth a class bear-
    ing reasonable relation to and distinguishable from other
    policy groups, inclusive to members of such class or group of
    not less than 100 new entrants yearly. The premium on any
    such group policy is payable by the financial Institution
    OP beneficiary. Such financial institution 1s not prohibited
    from collecting from an applicant for a loan cost of such in-
    surance as applied to and charged in making the particular loan
    to the borrower.
    Yours very truly,
    ATTORNEY GENERAL OF TEXAS
    By s/Wm. J. R. King
    Wm. J.-R. King
    Assistant
    wmK:LJ:wc
    APPROVED AUG 9, 1945
    s/Carlos C. Ashley
    FIRST ASSISTANT
    ATTORNEY GENERAL
    This Opinion Considered And Approved In Limited Conference
    

Document Info

Docket Number: O-6642

Judges: Grover Sellers

Filed Date: 7/2/1945

Precedential Status: Precedential

Modified Date: 2/18/2017