Case Information
*1 OFFICE OF THE ATTORNEY ,GENERAL OF TEXAS AUS7lN
Honorable. 0. P. Loakbart, Chrlrmn
Ijoua or lMuranoe Co8u.m.1onar. Texa.
Au8tln, Dmr Slrl oprnlon no. o-yxio R er An l rirtioq @mUa ruor u.a In ln-
&drutrla;1 uul gvk3up’~llSo
iq .ap 8‘xogul~ly 8aheduled aLr rdvk daflnlte1.J Jsatueon 1. void UtablU4d alrporta: lIksof8.r m.8 it pfm ort8tolmt the lnsuror'r 11a llity after Ii of th. amte8t- axpllutlon puloa 8.t out In ~LrtlOl~8 uid 4764b, Vernon’. An- not8td Civil Statute8.
8eotloa of Artlolo 4764b, Vernon’8 Annotated Civil doallng rlth indu8trlal llfo Ln8uranao~ read8 In Statutea, p.rt a. follov8: *2 "Ro lnciustrlnl life lnsurnnca policy do- or 18sUed for dellVery 111 tba StSte 01 llvored Tex&8 @hall OOntain any prOvlsiOn Vhlnhl
(I . . . . *(b) axeapt a8 OthUIIl88 provided herein, proVlde8 l-Or My mod8 Of 8ettlWOtlt OZ value th&n the WOUnts 1118~md on th8 at WtlWity
faoe of the polity, p1U. dividend 6ddltlOn. if &ny, le.8 My iCidebtedne.8 t0 thereto, 011 the pO1lOy, aod 1.88 any prOtiU84 thrt in.,Wer may, by the tormr of the policy, be bduotad, Uid prorlded al.0 thi. F@OVi.iOlI th@t -11 not raved an addltlonal ooldental death bow-
r1t L lng llmltrd 80 a8 IlOt to b. pay8ble in want of doath frw OWt8l.n aause8 Of 8OOldent8."
There i8 a 8lnllar proVl8lon la htlo1e 4733, Vernon's Anaot8ted Civil Matutor, Vhlch read8 ln put 88 fO11OU8C
"POliOie8 8hau UOt oont8ln Whati Tori- 81OtlS fOl' h-fit &88 Thn Ptil &IWJfit iX3 hX'- taln Cue8 Penltted. BO poli0y 0f iir0 iru~r- mae 8hll be i88Wd or dellrerod ln thi8 Stata, or be 188wd by life in8ur8noe oolpany hOOr- por8t.d UndU th. l8llO Of th18 If St&e, it OOCI- taln8 any of the foll~vlng prool.lOn8:
I . . . .
"3. A &WOVi.iOLi for UJ mode Of 8OttltiOIlt 8t meturltr of 1.~8 thm the 8mOUnt8 in- Vtiw 8ur.d On the f8Oe of the polloy, plus dividend ddltlon., if My, 10s. w lIldebt.dIm.8 to the ooupuzy on the pollay, and le.8 any promlum ut nuy by the torma of the polloy bo deduotmd; pro- vided, however, th8t any ~ooapn~ IUJ 188~ a benefit le.8 than tha fU11 POliOy ~ollli.145 benefit ln oem of the death of the ln8ured by hI.8 own hand uhlls 8+a or lnranne, or by follou- haxudow iq 8tAt.d OOOUp~tiOLl., or event the de8th of the lluured 8hould result
from avl&tlon otlvltle8 under the oonditlonr: in the polloy, to be approved by the *pelfled *3 iitin~rt-tbl; 0. P. Lockhart, paw 3
Board of lnswe.uc6 Com.mlsaion*rs, a8 provided in Chapter 3, Title 7d, of ths Revl8ed Clvll Stat- Ut.8 Of 4.X438 Of 1925. This proVl81on ahell not apply to purely 8ooldtnt and health pollofe8.
No forsgolng provl8lon retit- to polloy form6 apply t0 pO11Oi.8 188Utd ill l1.U Of, Oc 8h.11 any other pO1101.8 188Wd be- in exohmge for, AOt8 fore July 10, 1909. 3l.t bag., p. i 1.92, 360. 23; Aot. 19 1, 47th h&3., K.S., 8.8.
264, t 1.)"
Th. quot.d 8v1etiOn OtiU.6 tt.mpt. to .X0.&% md txoldt from the of th. polloy the r1.k of de.th frm oortrege the 8ptOlfitd 08UI.8. It dot8 not eontbaplrte eg fi8blllty on polloy .8 auoh, but, In efftot, provide. th8t the d.8th of' ln8ur.d 8.t OUt Win n6v.r Mt’W. fl'0.i th. 0.U8.8 policy. It [18] not 8 01.U.t rt3O@iZi~ a lleblllty On polloy end reducing under 8ptCifitd alroum8tmot8 the amount ~rcml8.d to b. p8ld. For the.6 X'688on. it 18 not l 'prOv181on for any mods of .ttl6ment et maturity of leea value thm th. amount. tneur.d on th. feoe of the p011ay~ 8Ed the 8bOve QU0t.d 8t8tUtOry ~rOVl.iOM er. not eppl.iC8bl6. &uht v.
Ftdtrrl Llfo Inmuwnct Company, 248 3. 3251 Amwlae Uet- lone1 Inaur~ot Capany v. Idweon, 127> 3. Y. (Bd) Great Southern Lift %+4. Cappanr v. Ulna, In.urenoe (24) 902; Owrdl8n Idf. In8urenc6 Company T. tiloo8tlen, 155 3. Y. (2d) 396. t%t l~lM8. Of CT.rt8iB O.... illdiO~tt8 the oontruy vim. Athnt8 lBllWMO6 Ltoe Cm-y V. COP- mltr, 85 9. W. (24) 1045; Cook Q. cOntlMnt81 C88wlty Con- pe.ny, 160 3. Y. (Pd) 576; Unlvor8el Lift 1n8UF.nO. Co-y v. Grent, 117 S. Y. (26) 813.
The Court In the 08100.tl.n 08.6, 8UJW8, Vhllt dle- Cuulng the oplnlon of th.lAV.~n CU., SUpF8, h.ld: It 18 81.0 irpliOit in the ~lllion
th8t .i& i...rtlon of non-lleblllty I. not pro- hlb1t.d by uid Art. 4 3, 8Ubd. 3. l'ha pmhlbl- by Art. P ubd. 3, ol.arly oon- tlon dtelerod ttRpl8tt. lhbility Upon e policy 88 .UOh, urd the prohlb1t.d ~OV181OU on. ooduolng th.
eaount prcalotd to b. paid upon ooadition8 end With OUttin .XO.ptlOn.. In our oplnlon, it can h&r. PO l p pliO8tiOB to l p r oVl8lw rhloh Optr~tt8 vtild th who16 promlst; provided, of OOUTI~, 8uch prOVl8lOn 18 not 8UbjtCt t0 8OIt oth6r pro- Nbltory rtetute."
I.uncrebla 0. P. Lockhart, p&a 4
The exoeptlon In subeectlon (b) of Aectlor~ 5 of Artlola (1764b uhleh l eeme to authorire l uah a olau~e In con- with 'an 8dditlonal death baefit" oarrim the UP ne4ticm plio8tlon t&t l uob olau8a 00108 vlthin the rtattimy prohi- bition dnoe, otharvls~, the exception vould be unneceeeary. hn lmplio8tlon, hovover, should not be ooxutrued 80 as to rary cr broulen tba l xpr888 laII@Aage Of the 8tatUte.
Subuotlau (0) of kotion 2 of Artlclo 476kb, Vor- o~n*a Annoted cwil stmte0, rating t0 iddrutrm iire irmur~oe and l ubuotioa (1) of 8oetlon 1 of &tlolo 47648, V8rnOn'B Armotakd civil StatUtU, relatirrg t0 &rOUp iire i~ur811oe, both roqulre 8 polloy provl8lon 8tatlng IA 8ub8t8me that tha polloy 8U bo lnooatoatablo not later t&n tvo yo8r8 The 8titUt.8 LLUI OWt8lI.i eXOeptlI3SI8 t0 tbs It8 date. fra lnoonto8t8b]lo reQulromnt quoted 8viatlO.U but alWISe dom8 not ftil V1tM.n 8UCh .xOeptlOM. iVQkiirOUllt8 QQJLttibla tie 8UOh tnOOnte8trb& The Oa8.8 OOSl8trUing inOOntr8t~b& Ohi 8UOh 818USO? 8Z?O In tha State of Ieu York (Betropollt~ Liio In- numerou8. convy, 3uperintwulent ~.XUU~MO, n52 8ll?8llOO c m.8. m.r. 4494 64~) and in other 8tater it i8 held that xaoptlng W fra xoludlng ure p ollry O&ILU l that l UI inoontortable O~NUO i8 “IIM68tO not & [8] l to OOVW~e’ tha urd &ah rra 8~Olflul OaUU8 IS not oontru~ rl8k U8U8d la rU8UMd that doruuo uncle themto. It l.nmlror’8 8Wh 018~80 18 ZIOt a OOntO8t Of ths pOllOr bUt Uh effort udoroe It8 tera8. %18 reUOllb& 18 UUd 8UU81 28X88 ouea . R?U&ilti81 -UP-e c-7 1. liil*r, 80 9.Y. r8XU (2d) m2k sOUthVO8tUII Life h8WII.08 cCUIIDMy V. aOU@tCUi, Ul S.Y. I 2d) 61gb
On the other hand it tn8 bowa hold th8t 8 eOate8t- able 018&U. l&UlIq O-trip UOaptlOllW intWld.d 18 t0 8llOU thku a 1W80, not l hhori~8d none not amod,,ud by th8 ax- oeptlons, but ttoa#tlng to llalt oovarag8 md uolude rirk8 to inaonte8tabh r8qulromnt. *rnler oontruy v. .tiOZl8 X&H. P8OlflO 8t YUtU81 uf0 XMLUMO~ ColpLlv, 8nd 88 A.L.R. 773. A.L.R. For 8 oo~eotlon Of 8uthorltl88 8.8 the WOta- hr. [88] and l log tin very The rO-8 8a8*8 sonatrulng alall8r ltmonta8t8bl8 rWJtireIWit Of title 732, V8rn0n'l *5 flonorable il. f. Lockhart, p4xc 5
¬ated Civil Statutes, u-e helpful in determlnl~ the l p- pllaablllty of the 8bOVe nrentloned prorl8lone to the aviation 018U8e. The SU&WeM COUl’t Of 2’0x88, N8tfOnd fIl AMrfOPn In- l r8110e C~qmny v. Tabor, 230 3. U. 397, 8aldr
*After the l xplratl0n of the period fixed, the 8UbdiViliOn WliUfMt~8 811 dden8cl8, OXOept tlloae mpeol8ll~ a8ntlonab."
In barfern Ymtlowl Iauur8noe Company v. UO1.h. 22 3. If. (2dj Ccrri8810~ of 49Oa18 nald;
Vh0 ra~iing md l rr00t or there prOVi8iOIA8 t0 pe80?1be t.UO mlr8 l tb lyli.EU@ p@r- VU8 i0d Of lfMit8tiotl, aftOr Vhlah I10 dWfOM0, OXO@pt of preaiuw or vlolatlom or oon4l- no-pant tlopl relative to naval or ullltu~ servloe dur- ibb3dt0 4.hatpapd i0.g the VU, 8houldb Or 8 iu8 pOilOy.. .’ In Atlanto We Iwursaoo Company v. CoCPIer,
3. w. (la) lo45, tb8 Camri8810n 0r &Jp818 (opinion adopted by the Suprm Court) ha4 far oonsl4errtlon a ola~u provldlng thlt n0 b&h bWMrit ~88 pay8b& if duth ?88tdtWd ira 0 dL8ea80 OOXktr&OtWd &Z’iOt &hd that dAt8 Or the POllOy, - Qeeth Zror 8uoh aW18e Va8 not 8 risk -rumed. On OePtllled l.n vier the qllO8tlOM lnqalrlrl& vhetber , incantestable re- quirement, the ln8urer could, 8.fter two year8, dete&koh that ground, the OOUPt 88id:
" Life fll8IWUWO 8-88 %88uing pOxOii8’Oi uf0 inrtWUiO8 in thi8 8%,8 ~0 LWt rru te dOtOm rht u0eptioru idt thy rix.l vrite into thlor pOuO1.8. %8 8titUtO8 Duy th e PWr rittd l XOO~tiW, ud 8 5JrOV28100 d&i- other xoeptlonr ~014. Any other oondruo- of tatutoa uould thwart the evident tlon ptWpO80 Of their WBUtMIIt. If the t¶X9eptlO3 ttO4ItWd thi8 8hOkd4 be Up- t0 be h -80 held a8 valid, there would be no 1-t to number of uoeptlonr that oo~ld be vrltten ln- to a alloy or life IPmmaaoe, and, by mltlply- ino tg-, an iluuranoe oompuly could vhittls rf8k8 It 88eU808 UJ2til ft 8pO11OfeE doun would have but little, if any, re81 value. To prevent thl8 was the purpole far vhlch the Itat- utem were enacted.
"The queetlon certlfled la 8nsWered 'NO.'" The Cornusr 0680 has been questioned by JuQo Funder- burk in tha Oalooetl4n oare, 8rlpra, in 80 fU ar It doe18 Vith Article 4733, but vc cannot agree thet it h88 been di8oredlted as to it8 lnterpret~tlon of the lncontestablo atiuSe of &tlcle 4732 + A8 to the letter interpretation it ha8 been folloued in Platlooal Inauranoa CmLpany V. Clay, i% 3. u. (2d) Ua8hlngton 834, Yhlah ca8c rch.wd, by virtue of &Section 3 of Artlole allow the insurer to Cafe&, after two yeer8, OKA a ~18~80 thet cuurot be dlatlng;uLahed in prlnclple from the cl8ura now in question. provialon that the aontr8ot 8h8ll never
A llre pollo~ beoom effeotlve unlere it 18 delivered vbl2e ineuro 18 tiiUa find in 8oun4 he8ltb la V81id. Qre8t PIetlonal Lit8 Iluuramce &~Lc, (corai88im Or Appeal8 hai8iOA) 1% 3. u. CO But the lneurer may not rely upon 8uch olauee 88 l (23X2. defame after the expiration of the two-year oonte8t8ble r- 1Od. Reuablr Ufc In8urraoe Coopeny v. Wyatt, 154 S.Y. 26) r 24% ?ies4rve Loan ure Insurlace Capany v. Brown, 159 S.Y. 179.
(24
In our oplnlon the aVi8tiOA olau8e violate8 the, tin- conte8table requirelaent8 of Artlola 4764r and 4764b, Vernon18 Annot8tea Civil St8tUtW8, iololer 88 it purportr to provide a dsfenu 8fter the expir8tlon of the eonte8t~ble perlo there- in wt out, and suoh cbu8s 8hotid not be 8pproved by Board for that ronson.
Us do not attempt to anover broad que8tlon u to uhother Artiole8 and k733 l pply to industrial lire and group US4 pollcle8, but vu ~111, in thl8 oomeotlon, be glad to give our apinIon on any 44finlte f8Ot 8lturtlon sow berore your department. Iiowvor, ue oil1 to your 8ttentlOn the fol- 1OUlng pX’OV181Oll of hticle 476'Jbr
"Sad. 7. A88OUiatiOA8 &ZCWptOd. ThL8 AOt IlOt 8p& 8hd1 UUtLld ai4 888OOilbtiOM or etate-vlde mtrtu81 life, health, uul eeoldent OapMlW8 and burial ~88Oclation8 Operating un- der Senate Bill Ao. 135, Act8 of the Regulu S48- 8iOn of the Forty-8lxt.h kgl818tuF8, but thi8 Act 8nd ao other rhell apply to uxd govern the form 8nd oontent lndustrlal lir4 insuranae pollol48, *7 Eonorabl8 0. P. lAwhut, p8go
u they ua bf&md buda, lm8ud by al1 otbu la8ur~O txmpMl88.’
YOtu# ruy truly