            THEAITORNEY              GENERAL
                          OFTEXAS




Honorable George B. Butler, Chairman
Board of Insurance Commissioners
Austin, Texas
Dear Sir:                  Opinion NO. o-6642
                           R0: Construing Article 4764a,  V.A.C.S.,
                                as to whether a group insurance
                                policy issued to a flnanclal~ln-
                                stltution is permitted to cover
                                the lives of any number of borrow-
                                ers from a flnancl~alinstitution
                                less than all of them and more
                                than 100 entrants annually.
       We have carefully considered your letter of June 5, 1945,
requesting this department to render an opinion answerln cer-
tain questions presented by~gou relative to.~Subdivislon7 3)
Section 1 of Article 4764a,  Vernon's Annotated Civil Statuies
of Texas. Your questions substantially restated are as fol-
lows:
       1.   May a group oplicg be issued covering the
            lives of any number of borrowers from a
            financial Institution, less than all of
            them and more than fifty, and if so, what
            are the restrictions or regulations as to
            classification of such groups?
       2.   Should the premiums on such group policy
            be paid by the financial Institution out
            of its own funds, or may It collect pre-
            miums from the debtors for the purpose of
            paying such premiums?
       Your first question necessarily calls for an interpre-
tation or construction of Subdivision (3) of Section 1 of the
foregoing statute, particularly the underscored portion of
said subdivision worded as follows:
      "Sec. 1. The following forms of life insur-
   ance are hereby declared to be group ll,felnsur-
   ante within the meaning of this Act:
Honorable George B. Butler, page   2       0 -6642


      “(3) Life Insurance covering only the lives of
   all members of a group of persons numbering not less
   than fifty (50) at all times, who become borrowers
   from one financial institution, or who become~pur-
   chasers of securities, merchandise, or other property
   from one vendor under agreement to repay the sum bor-
   rowed, or to pay the balance of the price of the
   securities, merchandise, or other property purchased,
   to the extent of their indebtedness to said financial
   institution or vendor, but not to-exceed Ten Thousand
   Dollars ($10,000) on any one life, written under a
   policy which may be issued upon the application of
   and made payable to the financial institution or
   vendor or other creditor to whom such vendor may
   have~transferred title to the indebtedness as bene-
   ficiary, the premium on such policy to be payable by
   the financial institution, vendor, OP other creditor.
   Provided, that group life insurance Issued under
   this classification shall not include annuities or
   endowment insurance, The requirements set out in
   Subsection 4 of Section 2 of this Act shall not
   apply to this Subsection."
       It Is noted that the foregoing Subdivision (3).of Sec-
tion 1 of the statute ls,taken from House Bill No. 326;Chapter
349; of the General Laws, 48th Legislature, Act of 1943, p.
604, the caption of which amendatory act provides:
       "AN ACT amending Section 1 of Chapter 101,
    Senate Bill No. 41, Acts of the Regualr Session
    of the Forty-second Legislature, as amended by
    Section 1 of Chapter 610, Acts of the Regular
    Session of the Forty-seventh Legislature, so as
    to make available group life Insurance to employ-
    ees of school districts in the State of Texas;
    and declaring an emergency."
      Article 3, Section 35 of the Constitution, provides:
       "No bill, (except general appropriation bills,
    *.......) shall contain more than one subject, which
    shall be expressed in its title. But if any subject
    shall be embraced in an act, which shall not be ex-
    pressed in the title, such act shall be void only
    as to so much thereof, as shall not be so expressed."
       It will be seen from the caption of the foregoing.~House
Bill No. 326 that same amended Section 1 of Article 4764a;
V.A.C.S., but in doing so expressed the sole purpose of mak-
ing available group life insurance to employees of school dis-
Honorable George B. Butler, page 3         o-6642


tricts in the State of Texas, A paragraph authorizing such in-
surance is found added to Subdivision 1 of Section 1. Section
2 of the Act, being the emergency clause, expresses the fact
that there Is no provision under the present law for school
teachers and employees of the public school system to obtain
group insurance, and the fact that the enactment of this act
would make possible such group Insurance, and the fact that
such insurance would be for the Interest of the public school
system and the teaching profession of this State creates an
emergency, etc.
       The authorities are numerous to the effect that a cap-
tion of an act is deceptive and misleading which expresses a
purpose to amend the statute in a certain partlcuiar when the
body of the act goes beyond and purports to amend the prior
law In other particulars. New substantive matter contalned
In an amendment which Is not germane or pertinent to that
contained in the provision amended, is invalid as legislation
upon a matter not expressed In the title of the amendatory act.
39 Tex. Jur. para. 48, pp. 102-4, and cases cited therein.
       Where a statute operates as an amendment of an earlier
law, the effect of holding it to be unconstitutional is to
leave the original enactment in full force'and effect. 'Culber-
son vs. Ashford, 118 Tex. 491, 18 S.W. 585; 16 C.J,S. para,
101, pq 102, N. 61.
       Prior to the foregoing1943 amendment, Subdivision (3),
Section 1 of said statue, as corkained InHouse Bill 1061, ".
Chap. 610, Genera1 Laws, 47th Legislature, Acts 1941, p. 1346,
provided:




      "(3) Life insurance covering only the lives of
   all members of a group of persons for not more than
   Ten Thousand Dollars ($10,000) on any one life, num-
   bering not less than one hundred (100) new entrants
   to the group yearly, who become borrowers from one
   financial Institution, OP who become purchasers of
   securities, merchandise, or other property from one
   vendor under agreement to repay the sum borrowed, or
   to pay the balance of the price of the securities,
   merchandise, or other property purchased in Install-
   ments over a period of not more than ten (10) years
   to the extent of their Indebtedness to said financial
   institution or vendor, but not to exceed Ten Thousand
   Dollars ($10,000) on any one life, written under a
Honorable George B. Butler, page 4         O-6642


    policy which may be Issued upon the application of
    and made payable to the financial Institution or
    vendor OP other creditor to whom such vendor may
    have transferred title to the indebtedness as bene-
    ficiary, the premium on such policy to be payable
    by the financial Institution, vendor, or other
    creditor. Provided, that group life Insurance
    Issued under this classification shall not include
    annuities or endowment insurance. The requirements
    set out in Subsection 4 of Section 2 of this Act
    shall not apply to this subsection."
       It is apparent from the foregoing authorltles and we so
hold that Subdivision (3) of Section lof the statute as lncor-
porated In the foregoing 1943 act and appearing in Vernon's
Annotated Civil Statutes, Supplemental Pocket Parts, 1944, is
invalid, thereby relegating us in this opinion to consider your
questions solely with reference to the original enactment of'
Subdivision (3) as found in the earlier amendatory Act of 1941,
H. B. 1061, 47th Legislature, last above quoted.
       By Section 1, Subdivision (3) of the 1941 Act applicable
to borrowers of a financial institution, permissible group in-
surance is defined as life insurance covering only the lives
of all borrowing members of a roup of persons . D . numbering
not less than one hundred (1007 new entrants to the group early.
The only restriction OP limitation found in Subdivision (37 is
that such insurance shall not be issued for more than $lO,OOO.OO
on any one life; there must be 100 new entrants to the group
yearly; the insured indebtedness of a member, If payable In
installments, shall not exceed $lO,OOO.OO over a period not
to exceed ten years and such group policy be issued upon ap-
plication of and made payable to the financial institution
or other creditor, transferee of the debt by the institution,
as beneficiary. It is further provided that the premi~umon
such group policy shall be payable by the financial institu-
tion or creditor transferee as beneficiary and that such
group life insurance shall not include annuities or endowment
insurance.
       We find no language in Art. 4764a as enacted by the
42nd Legislature, Acts 1931, and as amended by Acts of 1941, or
any valid provisions of the 1943 Act, requiring or restricting
a group life Insurance policy issued under Subdivision (3) to
cover all of the borrowers of a particular financial institu-
tion. Tither   do we find In the Act any regulatory power
given the Life Insurance Commissioner expressly doc7'rn with
such contractual relationships between the borrover oafa
financial institution and the institution itself with refer-
ence to the applicant for a loan paying to such institution
Honorable George B. Butler, page 5        o-6642


a portion or all of the cost of such group policy Insurance
as applied to applicant's loan.
       In view of our holding invalid Subdivision (3) of Sec-
tion 1 of Article 4764a, V.A.C.S., as Incorporated In Chap-
ter 349, Acts 1943, 48t.bLegislature, and answering your ques-
tion with reference to the prior law unrepealed by said amend-
ment, Chap. 610, Acts 1941, 47th Legislature, General Laws,
p. 1346, It is our opinion that a group policy issued under
said Act 1s not required to cover the lives of all borrowers
of a financial Institution exceeding 100 new entrants yearly,
More than one group policy ma-7be issued upon separate appll-
cation by a financial Institution,setting forth a class bear-
ing reasonable relation to and distinguishable from other
policy groups, inclusive to members of such class or group of
not less than 100 new entrants yearly. The premium on any
such group policy is payable by the financial Institution
OP beneficiary. Such financial institution 1s not prohibited
from collecting from an applicant for a loan cost of such in-
surance as applied to and charged in making the particular loan
to the borrower.
                                Yours very truly,
                             ATTORNEY GENERAL OF TEXAS
                                By s/Wm. J. R. King
                                     Wm. J.-R. King
                                     Assistant

wmK:LJ:wc

APPROVED AUG 9, 1945
s/Carlos C. Ashley
FIRST ASSISTANT
ATTORNEY GENERAL
This Opinion Considered And Approved In Limited Conference
