              THJCAIT~RNEY                  GENERAL
                           OFTEXAS




HonorableGeorgeB. Butler,Chainnan
Bond of Innunmoe Camniasloners
Au&in, Texae

Dear Sirr                            oplnlonIlo.O-7002
                                     Rer   May the Bankers StandardLife
                                            InnuranoeCanpany,a ntatewide
                                            mutual Mneonment ocmpsnyop-
                                            eratingunder Oh. &, Art. 5068-1,
                                            T.A.C.S.,and amendmenti,which
                                            wan or&lnally lmoorporehed  an a
                                            FraternalBenefitSoolety,emend
                                            its purponbolaune in order to
                                            lnalude the lasuanoe of health
                                            and aooldentpoliolemin addition
                                           .to thevritlng of life insurailoe
                                            polioier?

          The subjectof your lnqulryis the BankersStanda Life Ineuranoe
Cclapanyof Dallae, Texae, ae pointed out in your letterof December 15, '
1945, originallyipoorpomted ae a BraternnlBenefitSociety,Chapter 115,
General Iawn of the 26th Legislature,Acts of 1899.

            We quota the followingportioneof your letters
                                                                               <A
         “Baikern~Staidird Life Inmranoe Ctipm@, Dallas,
    Texam, la a statewidemutual amsesamentoampanyopsrating
    under Chapter88 and Artiole 5068-land amndmento. It
    w&a originallyinoorporatedam a Braterm BemefltSoolety
    under Chapter ~5, General~awrrof the 26tbbgistiture,
    Seotlon 15 of the then Revieed Statutes. The pertinent
    part of Its pnrpoesclausewas M followa:

         “‘The objeot and purpose for which thie aosoalatian
    ie formed is to providefor the pagPentof 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 charteralso provided8
                                                        __   ~.




HonorablebeorgeBe Bu’tler,
                         Page ” (9-7002)
                                                        I




         “Thfa corpo~atfm shell have all of the powers
     conferredupon eueh eorporatfonby the laws of thla
     State provfdinSfor the 5ncorporatfonof fraternal
     benefitasso~frptfone.~



          “The associationqualifiedfor a lloeneefrom this
     De@.rtanentunder Bouee Bill 303# Aote of the 43rd
     LegzfcLature.

          ‘Pleaeeadvleeme whether the aesocfatfonmay now
     emend the purposeolauee ofita charterto fncludele-
     mt.reno.e
             of health end aeeidentpolfefesin additionto
     the writ& of life imumnce polfcies,

          “LetterOpinionfmm hour DepartmentdatedJuly
     16, ngjy# oopy of whi& ia enolaaeatouchesupon this
     iJlqulryo*

          The foregoingpurposeeLauae of the charterstatingthe obleot
and purposefor whfoh the assoofationwee orgfna1l.yformed appearato ,?e
withln the provisionsof the 1899 Aot. Seotion 1 of thle Act provided
that such associationmay make privisionfor the pweut of benefits1~
0BBe of el&ne8e, temporaryor permanentphyeloaldfeabllity,either &
the result of d%iieaee,
                      mce9Qentor CM age.

          The foregoingAot of 1899 wee repealedin 1909 with ltslprori-
q ione eubatantisla$
                   Pe-emoted  :inChapter36, 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 revfeedby the Act of lgl3 with the fPregolr@
provisions subetrmtiaU.ytnn&e.ngeb.We note that in the originalApt,
as well ae each subsequentemendmentor reviefon,one of the primal-y ohme-
terfstloaof a PratexmalBepefitScaietg is the requirementthat aaoh
eooietyhave a lo&ge sywteinor repreaelntatfve
                                            fom of goveI’L?mentwith the
ear4  Act requiringa E~dge aystenn
                                 w1t.hrftualiatioform of work.
          Eaoh of the foregob@ Acts of 16% cad 1909 above referred
to, oontalneubetantiallythe eeme provisionae found in oar preeent
Artfcle 4823, Be 0. S. (Acts IgU), whioh wade3
           “Exceptae herein provided,such societiesshall be
      gpvennedby this l&w, aandshall be exempt frcpnall provisions
      of the fnsurarnce~%weof t&Is S,tate,not or& ln govemental
      relstfonewith the SWte, ‘batfor every other purpose. X0
      law herafterenactedehaPl app?$ to therm, unless they be
      expreseP$deemated t.her~eiz~:,*
     r    .




EQnoMble bxge   B. Butle$,Page 3   (O-7002)



         Section 14, Subdiviefona3 and 6 of the Act of 1899, oontalpe
the followingprovielonrequiredfn the applicationof such aseoolatione
in obtaininga charter,to wit.8

          "3. The obgeotand purpose for whiah the aeaoolati&u
     is formed,end shall not ineludemore liberalpowers
     than are grantedby this Act.

          "6. The term for which such corporationshall exists,
     not to exceed 50 years o D **

         This sectionfurtherpR)vfdedthat euoh charteremay be muended
by filingwith the Secretaryof State the desiredemendmentgproperly
aoknowledgedaa requiredln obtaininge charter.

          !!!hle
               ri&t to amend wae expreealypreservedin the Act of 1909,
 Sec. 15 and broughtfomard in the 1913 Act (Art.4839,.R.0. S.)

          It 16 noted that Artfole 4859e,Seotione 1 through10, were
ensated in 199, Aete of the~kletLegislature,Fdret Called Se8mlon,Chap-
ter 75, making provielonfor any FraternalBenefitSoslatywith a lodge
eyetem end repreeentatlveform of gove-nt      doing businessln the State
of Texan to convert ltaelf into a mutual benefit ocaagenyor into an
lnoorporatedetock oanganyby canformingto it8 provleione.

         Article 4959fpR. C. Se9 provide6ln Section 1 that "any oorp-
orationorganieed end lnoorporatedunder a pre-axietinglaw in thle State
ilthoutaapltalstobk and not for profit,whfah law hae,beenemendedor
repdalsdor re-enaoted,and whloh was operating and aotually carrying
on in thle State immediatelyprior to January l9 1933, the state-wide
buelneeeof mutuallyprotectingor ineurln the lives of it6 member8 by
aesbsanentemade upon its membersmay oompfY with the terme of this Act,
subjectto the aubaequentprovielonshereof."

         This Act, House Bill Bo. 303> wattoriginallyenaotedby the
43rd Isglelature,Aate of 19339 Ch. 245, with a&ealuentemendmentsto
Section 6,:notmaterialherein to aorneider.

          In Section 14 of Article 4859f, it Is ,expreeely providedthat
"the ohsrtereof all oorporatloneoomplylngwith thle Aot are expreaely
oontlnuedln force during the ternw of eaid ohartereeubjeotto the
pro~lslo~ hereof." In Section 19 the artioleprovldeethat thle Aot qhall
In no wiee affeotor apply to oompanlesoperatingae looal~utual aide,
a.8fraternalbenefiteooietlee,reoiprooalezohangee,and etc., and except
ae expreeelyprovided,no lneuranoelaw of thle State shall apply to
oorporatlonsoperatingmder the Aot, and no law.herafter     enactedehall
apply to them unleae they be expresslydesignated  therein.

         Ae to the repeal of the Act of 1899, the rule in Texae 1~ to
the sffeot that where a generalstatuteprovidingfor a oorporationlo
Honorableporge B. Butler,page 4 (o-7002)

repealed,the chartergrantedunder the statuteis not revokedunless
there la a qpeolal provlelonln the repealingetatuteto that effect.
State ~8. Texas Mutual Reserve Life InsuranceCcrmpany,
                                                     51s. W. (26)
405, rev. on other @xmds, 58 9. W. (26) 37.

          We fall to find any pro~lelonunder Artlole 4859f, Chapter
8A, Title 76 of the statute8authorlr;lng an amendmentto a oharterof any
oanpanyoperatingunder the provlelonaof that chapter. The purpose
olauee of the Aot ~88 to bring all of thoee omnpanleeor aesoolatlonsto
which the Aot le applicableunder its provleloneor have their chartera
forfeited. The ohsrteraof all oorporatlonmoanplylngwith the Aot and
doing buelnesathereunderare expreaelyoontlnuedin force during the
terms eet forth ln maid oharter,but tvubjeot to the provlsloneof the Aot.
In this oonneotionwe find no prohibitionin Art. 4859f to sash mutual
assesementlife lneuranoeoompanleewriting aooldentand health lneuranoe
providedtheir ohsrteraauthorleethem to do 60.

         The ohtsrterorany amendmentatheretoof tbeBex$keraStandard
Life InauranoeCcmpanyare not before ~8, and we are informedthat euob
ocmpanyhas been issuede licenseby your deparlmentand operatingunder
Chapter8A and Article 5068-1,end amendmentstheretofor many years by
owip4lng with lta provlalons.

          In view of the foregoingprovlalona,we may aaaume that such
ocmpauyW(LBlegallyqualifiedand licensedto operateunder Chapter 6A as
a mutual assessmentlife insuranceocmpany,and in the absenceof any
evidencethat such operationle Illegalor detrimentalto the public
interestssuch ocmpanymay exercisethe rlgbtto emend its charter ln
keepingwith the provisionaof.~Art. 4838,whioh providesthat euoh
aorporatlonshall have such other powers (LBare neoeesaryand Idoldental
to carryinginto effect lta object and purposesand Article4839.

          It is not believedthat the Legielature,in the treatmentof
such aasooiatlonsslnoe the Act of 1899 end preaervlngthe oharter righta
of those qualifiedunder Chapter 84 of theRevised Statutes,intendedln
anywiseto limit eny originalcharterpowers and the rlght to emend the
same 80 long a the amendmentdid not seek to enlargeav give more liberal
powers to the aeaocietlonthan 18 grantedunder the orlgiealact of
incorporation.

          It la thereforethe opinionof this departmentthat the Bankers
StandardLife InsuranceCcmpeny,Dallas,Texas, operatingand licensedunder
Chapter8A, Title 78, V.A.C.S.es a state-widemutuelaeaessmentocmpanyis
authorizedto emend the purposeclauseof Its charterto Includehealth and
accidentbenefits in connectionwith the Issuanceof its life insurance
policies.
                                   Yours very tn14         '1833OPIRIOR
APPROVEDJAR 25, 1946            AlTORUEYGERERALOF T5As    CaaSIDERBD
/a/ CarloaC. Ashley            BY /a/Vim.J. R. King       NVDAPPROVRD
FIRST ASSISTNiT                       Wm.J.R. King         n?Imm!ED
ATTORlVEIGl!WERAL                          Asalstent       cmCB

UJRK/JCP/de
