Honorable    Jesse James                        Opinion    No. C- 279
State Treasurer    of Texas
Capitol   Station                               Re:    Whether the State Treasurer
Austin,   Texas 78711                                  Is authorized     to accept
                                                       certain   unclaimed    funds
                                                       under the provis’ions      of
                                                       Article   4.08    Texas
Dear Mr. James:                                        Insurance    Code.

       In your recent        letter    requesting     the opinion   of this office
regarding      the above matter,        you informed us that a number of
reports    filed     by life    insurance     companies under Article       4.08
of the Texas Insurance            Code, known as the Unclaimed Funds
Statute   For Life Insurance           Companies,     have included    Items
designated      as “stock      dividends”       “agents  checks”    “return
premiums”,       “ordinary     advance”,    l’premiums deposi&“,       and
“outstanding        checks”.

       Your first    question    Inquires  as to whether your department
is authorized     to accept     the Items so designated   under the pro-
visions   of Article    4.08    of the Texas Insurance   Code.

      The authority     of the State Treasurer    to accept          funds must
necessarily   be predicated    upon a corresponding     duty         to tender
under the law.      This concept   is expressed   in Article          4374 in
the following   language :

           “All moneys received     by the Treasurer   shall   be
       kept In the safes and vaults       of the Treasury;   and
       the Treasurer    shall not keep or receive     Into the
       building,  safes   or vaults   of the Treasury   any money,
       or the representative     of money, belonging    to any
       individual   except in cases expressly     provided   for by
       law; . . . . ”
       Article      93 of Vernon’s  Penal Code further solemnizes            this
directive        by placing a penal sanction  upon the Treasurer           if
he:




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Honorable        Jesse   James,      page 2 (C-279)


            !!
                  shall        knowingly         keep or receive.  into the
      building;   safes        or vaults         of the Treasury,   any money ’
      or representative          thereof         belonging   to any individual,
      except in cases          expressly         provided  for by law,....”

       In consequence   of the foregoing   provision     of our statutes
we must approach your question      by ascertaining      If there is any
express   provision   authorizing  or requiring     that the funds in
question   be paid to the State Treasurer.

       Section    2 of Article           4.08.provides     that:   “This    Article
shall   apply to unclaimed             funds,    as defined    in Section    3
hereof, . . . . ”

       Section      3 of   Article      4.08     defines   unclaimed   funds   as
follows :

           “The term ‘unclaimed        funds 1 as used in this Article
      shall mean and Include         all monies held and owing
      by any life    insurance     company doing business              in this
      state which shall      have remained unclaimed             and unsaid
      for seven years or more after             it is established          from
      the records    of such company that such monies became
      due and payable under any life              or endowment insurance
      policy   or annuity     contract     which has matured or ter-
      minated      A life   insurance      poli          t    t      db
      actual   Aroof of the orior         deathc~fn~he?n~~~ed            ghall
      be deemed to be matured and the proceeds                  thereof      shall
      be deemed to be ‘due and payable’               within the meaning
      of this Article      only If such policy           Is in force       when
      the Insured shall       have attained        the limiting       age
      under the mortality       table     on which the reserve           is
      based.    Annuities    and other obligations,             the payment
      of which is conditioned          upon the continued          life    of
      any person,    shall   not   be    deemed    to  be   ‘
                                                            due    and   pay-
      able’ in the absence of actual              proof that such person
      was alive    at the time or times required              by the con-
      tract.    Monies otherwise         admittedly      due and payable
      under any such life        or endowment Insurance            policy
      or annuity contract        shall    be deemed to be ‘held and
      owing’ within the meaning of this Article                  although      the
      policy   or contract     shall     not have been surrendered
      as required.   ” (Emphasis added.)

     Since we have previously   held in Attorney General’s    Opinion
C-200 (December 20, 1963) that Section   13 of Article   4.08
exempts life  insurance companies from reporting   property   which



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Honorable   Jesse   James,   page 3 (C-279)



would have been reportable      under other escheat      or uncl_aimed
property    laws after  the effective    date of Article    4.08,,    your
authorization    to receive  the funds In question       must be predi-
dated upon the duty of the life       insurance  company to report
and tender such funds under the provisions        of Article       4.08.
       Following    this reasoning,     and. referring     to the’speclfic
limitations     of Section   3 of ‘Article     4.08 quoted above, we hold
that you are authorized        to accept    funds from life      Insurance
companies under the provisions          of Article     4.08 only if such
funds became due and payable under any life               or endowment
insurance    policy    or annuity   contract    which has matured or ter-
minated as provided       in Section 3 of said Article         4.08.
        With reference     to the named items referred        to in your
letter,    we.are of the opinion        that those designated,as:        “stock
dividends ” “agents        checks”    and “ordinary     advance”,   as we
understand’the       use of these’terms       cannot be considered     to be
within the scope’of        Section   3 of Article    4.08.    The items
designated     as, “return   permiums” and “premium deposits”         would,
as we understand        the use of these terms, be funds due under
terminated     policies    or contracts     and would come within the
scope of Section        3 of Article    4.08;
      Those items simply designated      as “outstanding         checks”
must be further   clarified  by additional    information         before  it
can be determined    whether your office    is authorized         to accept
them.

     Since we have answered a portion  of your first  question
in the affirmative we will pass to your second question    which
is as follows:

           “If your reply to question      number one is afflrma-
      tive,    please   advise whether the provisions    of
      Article     4.08 requires   that all unclaimed  funds held
      by life     insurance   companies for at least  seven years
      be reported      to this office.”

      We answer your second question    by reference     to our state-
ments above and, as a corollary    thereto,    we hold that some but
not all unclaimed   funds held by life    insurance    companies for at
least  seven years are required  to be reported      to your office.




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Honorable   Jesse    James,    Page 4 (C-25'9)



                                 SUMMARY

          The State Treasurer    is authorized  to accept    as
      unclaimed   funds from life   insurance  companies only
      those funds required    to be reported   b Article     4.08
      of the Texas Insurance     Code; Article  t .08 of the'
      Texas Insurance   Code does not require     life  insurance
      companies to report    to~the State Treasurer     all unclalfied
      funds held by such companies for at least        seven years.

                                         Very     truly     yours,

                                         WAGGONER CARR
                                         Attorney General




                                                Assistant

WOS:ml

APPROVED:
OPINION COMMITTEE

W. V. Geppert,      Chalrman
John Reeves
Ed Boldlng
George Black
Jack Goodman

APPROVEDFOR THE ATTORNEYGENERAL
By: Stanton Stone




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