Case Information
*1 THJCAIT~RNEY GENERAL OFTEXAS
Honorable George B. Butler, Chainnan
Bond of Innunmoe Camniasloners
Au&in, Texae Dear Sirr oplnlon Ilo. O-7002
Rer May the Bankers Standard Life Innuranoe Canpany, a ntatewide mutual Mneonment ocmpsny op- erating under Oh. &, Art. 5068-1, T.A.C.S., and amendmenti, which wan or&lnally lmoorporehed an a Fraternal Benefit Soolety, emend its purponb olaune in order to lnalude the lasuanoe of health and aooldent poliolem in addition .to thevritlng of life insurailoe polioier?
The subject of your lnqulry is the Bankers Standa Life Ineuranoe Cclapany of Dallae, Texae, ae pointed out in your letter of December 15, ' 1945, originally ipoorpomted ae a Braternnl Benefit Society, Chapter 115, General Iawn of the 26th Legislature, Acts of 1899.
We quota the following portione your letters <A “Baikern ~Staidird Life Inmranoe Ctipm@, Dallas, Texam, la a statewide mutual amsesament oampany opsrating under Chapter 88 and Artiole 5068-l and amndmento. It w&a originally inoorporated am a Braterm Bemeflt Soolety under Chapter ~5, General ~awrr of the 26tbbgistiture, Seotlon 15 of the then Revieed Statutes. The pertinent part of Its pnrpoes clause was M followa: “‘The objeot and purpose for which thie aosoalatian ie formed is to provide for the pagPent of death benefits to its membera in good e-ding who have paid all maem- nmmta due by them, and to lqeue death benefit oertlfioatee to sach of its members, male and female, between the ages of 18 and 50 yeam of age...’
“The charter also provided8
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Honorable beorge Be Bu’tler, Page ” (9-7002)
I “Thfa corpo~atfm shell have all of the powers conferred upon eueh eorporatfon by the laws of thla State provfdinS for the 5ncorporatfon of fraternal benefit asso~frptfone.~
“The association qualified for a lloenee from this De@.rtanent under Bouee Bill 303# Aote of the 43rd LegzfcLature.
‘Pleaee advlee me whether the aesocfatfon may now emend the purpose olauee ofita charter to fnclude le- mt.reno.e of health end aeeident polfefes in addition to the writ& of life imumnce polfcies,
“Letter Opinion fmm hour Department dated July 16, ngjy# oopy of whi& ia enolaaea touches upon this iJlqulryo*
The foregoing purpose eLauae of the charter stating the obleot and purpose for whfoh the assoofation wee orgfna1l.y formed appeara to ,?e withln the provisions of the 1899 Aot. Seotion 1 of thle Act provided that such association may make privision for the pweut of benefits 1~ 0BBe of el&ne8e, temporary permanent phyeloaldfeabllity, either & the result of d%iieaee, mce9Qent or CM age.
The foregoing Aot of 1899 wee repealed in 1909 with ltsl prori- ione eubatantisla$ Pe-emoted :in Chapter 36, Flret Called Semion, 3let tiglehtnre, with SeotPcm 5 substmMally worded tie came 88 Seotlon 1 of the Act of l.899.
Again the law was revfeed by the Act of lgl3 with the fPregolr@ provisions subetrmtiaU.y tnn&e.ngeb. We note that in the original Apt, as well ae each subsequent emendment or reviefon, one of the primal-y ohme- terfstloa of Pratexmal Bepefit Scaietg is the requirement that aaoh eooiety have a lo&ge sywtein or repreaelntatfve fom of goveI’L?ment with the ear4 Act requiring a E~dge aystenn w1t.h rftualiatio form work.
Eaoh the foregob@ Acts of 16% cad 1909 above referred to, oontaln eubetantially the eeme provision ae found in oar preeent Artfcle 4823, Be 0. S. (Acts IgU), whioh wade3
“Except ae herein provided, such societies shall be gpvenned by this l&w, aand shall be exempt frcpn all provisions of the fnsurarnce~%we of t&Is S,tate, not or& ln govemental relstfone with the SWte, ‘bat for every other purpose. X0 law herafter enacted ehaPl app?$ to therm, unless they be expreseP$ deemated t.her~eiz~:,*
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EQnoMble bxge B. Butle$, Page 3 (O-7002)
Section 14, Subdiviefona 3 and 6 of the Act of 1899, oontalpe the following provielon required fn the application of such aseoolatione in obtaining a charter, to wit.8
"3. The obgeot and purpose for whiah the aeaoolati&u is formed, end shall not inelude more liberal powers than are granted by this Act.
"6. The term for which such corporation shall exists,
not to exceed 50 years o D **
This section further pR)vfded that euoh chartere may be muended by filing with the Secretary of State the desired emendmentg properly aoknowledged aa required ln obtaining e charter.
!!!hle ri&t to amend wae expreealy preserved in the Act of 1909, Sec. 15 and brought fomard in the 1913 Act (Art. 4839,.R. 0. S.)
It 16 noted that Artfole 4859e, Seotione 1 through 10, were ensated in 199, Aete of the~klet Legislature, Fdret Called Se8mlon, Chap- ter 75, making provielon for any FraternalBenefit Soslaty with lodge eyetem end repreeentatlve form of gove-nt doing business ln the State Texan to convert ltaelf into a mutual benefit ocaageny or into an lnoorporated etock oangany by canforming to it8 provleione.
Article 4959fp R. C. Se9 provide6 ln Section 1 that "any oorp- oration organieed end lnoorporated under a pre-axieting law in thle State ilthout aapltal stobk and not for profit, whfah law hae,been emended or repdalsd re-enaoted, and whloh was operating and aotually carrying on in thle State immediately prior to January l9 1933, the state-wide buelneee of mutually protecting or ineurln the lives of it6 member8 by aesbsanente made upon its members may oomp with the terme of this Act, fY subject to the aubaequent provielons hereof."
This Act, House Bill Bo. 303> watt originally enaoted by the 43rd Isglelature, Aate of 19339 Ch. 245, with a&ealuent emendments to Section 6,: notmaterialherein to aorneider.
In Section 14 of Article 4859f, it Is ,expreeely provided that "the ohsrtere of all oorporatlone oomplylng with thle Aot are expreaely oontlnued ln during the ternw of eaid ohartere eubjeot to the pro~lslo~ hereof." In Section 19 the artiole provldee that thle Aot hall In no wiee affeot or apply to oompanles operating ae looal~utual aide, a.8 fraternal benefit eooietlee, reoiprooalezohangee, and etc., and except ae expreeely provided, no lneuranoe law of thle State shall apply to oorporatlons operating mder the Aot, and no law.herafter enacted ehall apply to them unleae they be expressly designated therein.
Ae to the repeal of the Act 1899, the rule in Texae 1~ to the sffeot that where a general statute providing for a oorporation lo *4 Honorable porge B. Butler, page 4 (o-7002)
repealed, the charter granted under the statute is not revoked unless there la a peolal provlelon ln the repealing etatute to that effect. State ~8. Texas Mutual Reserve Life Insurance Ccrmpany, 51s. W. (26) 405, rev. on other @xmds, 58 9. W. (26) 37.
We fall to find any pro~lelon under Artlole 4859f, Chapter 8A, Title 76 of the statute8 authorlr;lng an amendment to a oharter of any oanpany operating under the provlelona of that chapter. The purpose olauee of the Aot ~88 to bring all of thoee omnpanlee or aesoolatlons to which the Aot le applicable under its provlelone or have their chartera forfeited. The ohsrtera of all oorporatlonm oanplylng with the Aot and doing buelnesa thereunder are expreaely oontlnued in during the terms eet forth ln maid oharter, but tvubjeot to the provlslone of the Aot. In this oonneotion we find no prohibition in Art. 4859f to sash mutual assesement life lneuranoe oompanlee writing aooldent and health lneuranoe provided their ohsrtera authorlee them to do 60.
The ohtsrteror any amendmenta thereto of tbeBex$kera Standard Life Inauranoe Ccmpany are not before ~8, and we are informed that euob ocmpany has been issued e license by your deparlment and operating under Chapter 8A and Article 5068-1, end amendments thereto for many years by owip4lng with lta provlalons.
In view of the foregoing provlalona, we may aaaume that such as ocmpauy W(LB legally qualified and licensed to operate under Chapter 6A a mutual assessment life insurance ocmpany, and in the absence of any evidence that such operation le Illegal or detrimental to the public interests such ocmpany may exercise the rlgbtto emend its charter ln keeping with the provisiona of Art. 4838, whioh provides that euoh .~ aorporatlon shall have such other powers (LB are neoeesary and Idoldental
to carrying into effect lta object and purposes and Article 4839.
It is not believed that the Legielature, in the treatment of such aasooiatlons slnoe the Act of 1899 end preaervlng the oharter righta of those qualified under Chapter 84 of theRevised Statutes, intended ln anywise to limit eny original charter powers and the rlght to emend the same 80 long a the amendment did not seek to enlarge av give more liberal powers to the aeaocietlon than 18 granted under the orlgieal act of incorporation.
It la therefore the opinion of this department that the Bankers Standard Life Insurance Ccmpeny, Dallas, Texas, operating and licensed under Chapter 8A, Title 78, V.A.C.S. es a state-wide mutuelaeaessment ocmpany is authorized to emend the purpose clause of Its charter to Include health and accident benefits in connection with the Issuance of its life insurance policies. '1833 OPIRIOR Yours very tn14 AlTORUEY GERERAL OF T5As CaaSIDERBD APPROVEDJAR 25, 1946 NVDAPPROVRD /a/ Carloa C. Ashley BY /a/Vim. J. R. King Wm.J.R. King n?Imm!ED FIRST ASSISTNiT Asalstent cmCB ATTORlVEIGl!WERAL UJRK/JCP/de