Case Information
*1 Hotiorable George 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'emlums Plan - 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'wtiether Wnot a limited capital stoCk life, health afia acclaent insu~anc~'company;~organlied andoperating rn this State and subj'i3ct tb.th'e provisltiiis of AtitibX 4752 of our statutes; is authorized to issue a single premium policy.
_ "I Bm-eficlosing 8 photostatic copy bf~such Kpolic~, ana we request your opinion about this matter. _, ,,~~
-'Article 4752, 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~iiisurance compaiiies generallg,/which shall have~~.powep ~onlg to ttian@.~~ ikit btislness withlil this'state, atid'to ~w?l'ce'iiitiar- tince onl?T On the'weekly'br'mbtithls oti‘emiutis rrlⅈ and to-t&titie ti6 pblicg'protiisfng to.pay^'mor& than one thou's&fid~ 13611%~~ iKth&-ev&t 'Of d&at% 6f"the insiii-&i friim ii~tui%l'c~us6s, nbp tioi+e'th&nW-t*o thotisana doll&rs ins the'- ev'ent of. a&atK'of f&y. .
tigFson Tr6m 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-fLve th6tisand'.dollars.
All stich~cbmpanies '$hall'b‘e's~bj~dt'to till the ~~ laws regulating life insurance companies in this
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Bonorable George Van Fleet, page 2
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 ‘"weekly premiums 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 rr means's planof insurance where premiums are contracted to be paid each month. ".
Article 4752, supra, is clear and unambiguous: It is the-.oplnion of this department that limited-capital stocky in- 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-of a-.~. policy of Texas-'State Life 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'.Slngle Premium 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-'monthly premium payments, and the payment in advance to'the Company of the first twelve months' interest thereon of
Dollars. ..(Said sum being-'interest under 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.d and~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 *3 Honorable Qeorge Van Fleet, page 3 0 -2652
(b) used In reduction of Walker Plan--Single Pre- mium Note, or (c) left with the Company--to aboumulate to'the-‘credit ol 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-'any annlversary'of the.pijllcy if 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^signated collector on-"or before 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-e of 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-'Premium Note 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,'this Poli cg 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'Texas State Life InsuranBe,,. Companyis writing insurance upon a"'plan other than'the %eek- l~. 6r, mijiithlg~.prem~ums planq ,I.L It is therefore the~'bpiniofi-'of this-a~epartment that Texas Stete'Life~ Insurance"~Company hii's-‘~- noauthority to write insuran'ce upon the "Walker Single Prem- turn Payment Plan," as outlined in said policy.
Ronorable George Van Fleet, page 4
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