        OFFICE   OF THE    ATTORNEYGENERAL     OF TEXAS
                              AUSTIN




Honorable D. B. Barrow'
Chief Eramiwr and Chlef Clerk
mrd   0r 1n8uran4e aolnal88ion4r8
Austin, Texas


Dear Sir:




                                     ph appears in Seotion 9
                                     by the 46th X~gidatare,
                                4 oQexat~one OS mutual *allem-
                          s~clatlo~   tn Texee.

                       4 of the osrtlfioate mu4t be statea
                        in& mob portioner of the by-l.W6
                        ion a4 umy aifeat the iaauranoe
                        artierr in any mstsrlel way1 and
        4m4ndment4 to the by-lawn whloh tight atfeat 8ua)h
        right4 of n~~mbers must forthwith ba mailed by
        first-olaes mail to eaoh oertlfiaslte holder 4f-
        fected. In 4480 of acsntroresay theburden of
        proof shall be oa th4 aonpany to prOYe the aaand-
        merit was mailed to th4 membrr. Peaah oertlfioate
        mat provide that ft eh4ll ba inoontsrthble. atte3!
                    /
 XOU. D. ‘i;.
            Earrow, page I!



        havlnfi iieen in for04 during the llletlme of
        the ineured for a period of two years from date
        of Issue. except for non-payment of eseesmwnte~
        provided, however. any araoaletlon may iseue a
        certificate providing 4 benefit leea then the
        mxlmum benefit asmee in the iecb of the oertl-
        fiocte in o&se of death of the member by his
        own h-a while ehne or insane. It shall imio
        ~roribe that in 06184 the 4.~4 of the insured. la
        &esstated, the amount of fkranoe     ehall be that
        which the premium aotually paid would puroharle
        at the oorreot age, baaed on rate@ in for04 at
        the time of the death of the lnrured. No aerti-
        fiohte issuea by such association, nor any appli-
        cation for the certlr5,ohte shall contain language
        or be in suoh tone 48 to mislead the appliocmt
        or the polioyholaee as to the type of Insuranoe
        afforded.                                       ,-
      We have',underllned the portion oft t&4 paragraph with
      whlah we are partioularlp oonoarn4d.

      “~111 you plnaes ailrise if, under this provision of
      the lau, a mutual aassaament
                               _.             __._ lat1on
                                    ineuranoe almoo
      may 14eue a polioy provlQing ior a bemrlt 1088 thpn
      the nmxhwi benerit in 0484 of death rrom n&litary
      or naval service in time of war, or in aa8e 0r death
      while ri‘diog in an airplane, euuh dsath ooourring
      after two gsars rrom date OS issue.*

       Yi;u have eorrsatly quoted the pertinent provisions of Seo-
 tion 9 of Senato Bill 135, 45th Leglelature of Texas, and
 cod.iried ee Section Y of Article 5058-1, %ernon*8 hotat
Texas Civil Stetutee. Such provlelone are applicable to
..zutualaseesement'lnsur~~cs arsoolatlone.

        iire laauraiica aompenle4 organ$zed and operating under
. chapter 3, Titie 78, Reviee& Civil StetuZee, mey plaos’exoep-
  tlone ir.their poliolee ror ViOlctiOEs  or conditions or th4
 polioy relating  to naval end mliltarp services In time of war.
  see Seotlbn 3 of JWiicle 4732, Vsknon'a tLrsiotate6Texas Clvll
  Statutes, which raaL9 8.6follower

            .?Thet the policy, or pollay an8 appllcatloa,
       shall constitute t$e entire oontraot between the
       partlee snE ekal.1 be lrcontestable not later tfxm
    Ban. D. B. Barror;, page 5



    i.    two years iron Its data, except for nonpaymnt
          of predinia; snd v&lch provision my or may not,


I         at the option of the company, contain
          ror    tiolations
          relating to nmal
          war.'
                                   of   the
                                                ac exception
                                               conditions    of
                                        szib nillltary servicm


           Iiowever, Texas court4 have repeatedly held that mutual
                                                                  the   policy
                                                                        Id tlze of



    aesesstmnt life lneurance oorponations are governed only by
    the statutes pirtloularly applioabls to them as such and that
    the ~4n4ral~insuranar laws rrlatfre to life insurance oomp4nl44
    0rganha    under Chapter 3, Tltle 76, Revised Ciril Statutes,
    4x-4 inepplloable to mtual   a44484xent iii4 inauranoe aompani40.
    Se4  the follo~lng oases:

          Banker8* it;: & Loan Asa'n Y. Bond, 112s S,W.(g$]

          Bankers' Life k Loon &ia'n v. Chase, ll4 8. if.
                    (aI) 974
          General Li&I~JlNl~44   co. v. Potter, l.24f. 'x.


          The oourts of' Texas havs.slso bsld that tutual a88e44mnt
    life .In4urano4 companies may plaoa reaeonebl4 Umltatlonr   on
    their liabilitle4 in their po1i.ci421 Jworided mulw are not prg-
    hlblted by otatute anpliaablr to them. 3ee the tollming 44844:

          Imperinl Life 1~4uro~c4 Corapany Y. Thornton, 1SS
                    a. E. (2d) 298
          Emkera* iire   k Loan Asstn v. Chase, 114 3. 3.
                  - (24) 374
          Benkern' Llte SC Loan ABB'~ Y. Don&, 11s S. u.
                    (Zd) 1001

           Clearly section 3 of -4rtiale 4792, V?rnon'a Annotated
    Civil Stctutes;  mpra,  applicable to life lnsur4nc4 oorppmi44
    generally, has no application to mutual ae4essment liie,in4Ur-
    41144 eonipanlas. $4 must, therefore, look to the provialons
    of Section 9 of Senate Bill 135, supra, for our,adswer to
    thi8 qU44tiOA, 44 we hnve been unable t@ find any othqr pro-
    vieion of law appllaabls to mutiial asee44,mnt life insuranOe
    companies and applicable to th4 question baiore ~4, other
    than Seation 8, supre.

          It    i8   CUT      OpiAiOA   that    S4OtiOA     0 Of s6IlRt4 Bill    Ii%,
    supra, 14' al44r and unembiguouo.
                                                                       2%&


    BOA. D. B. Barrow, peg4 4



           It IS our opilllon that raid section olserly provldee
    that the oertlfioato or polloy of insurance muat provide that
         Skall be iAOOAt4fJtabl4, after having been iA for04 for
    seII;d
    two years, eroept for nonpayment of asassamente~ thie 1s
I   limited oniy by the providon relative to suicides while
    sane or iA44A4,  4Ad by the provIa   relative to m.l.8-8tatem4At
    of ag4, eta. hi6 84OtiOA daee not OOAtaiA 4ny prOYiS0     re-
    lative to the death of the insured duriAg war, military or
    naval eervico or a* a result of airplane hazard e404s to
    4xoept &d    ri8ks from the lAooAtret4bility feature of the
    poliay after the polioy has been.iA for04 for two yearr.
    The statute ia plain, and vr,fJaA not read ouoh pro~ision8
    into it.

          You are, ~tbsrcforr, rsspeotfully advi-44tl that it 18
    the opinion of thl8 Department th4t your pu4sti4n rhould.
    b4.4Aawered in the mgative, and it Is ao enswkred.

                                     Yours very   truly

                                 ATTORNEY.GElW3AL OF TEXAS.



      ATTO-     GENERAL    .

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