             OFFICE   OF THE ATTORNEY        GENERAL   OF TEXAS
                                    AUSTIN
4-G-
--                                                            t   eo
       Honorable Charley Lockhart
       State Treasurer
       Austin, Texas       _

       Dear'Sir:
                           opinion HO. O-2956




                 Your recent requ                      ion   of tl*o depaptsl=nt
       on the above stated questi


                                                     0tter addr8sS8d
                                                     ter C. Wooclward,
                                                     Comissionors,
                                                   n regard to deposits
                                                under provisions of
                                               orty-sixthLegislature.
                                        ou note carefully the con-
                                        dvise us a3 to whether    :
                                     the State Traasurer vould be
                              ittod under Senate Bill 135 to ac-~,

                              dei7ycorlng
                                        ours)
                       ter of Jlonorab%IfalterC. Woodrrard,chair;acm
                       n3urenc8 C~mdssionors  attached to your letter
       read3 as follow31
                 "In prormlgatln~ rule3 and reEul.ntlousfor tho
            purpone of carrying out t!lepurpooc3 of Scnate Bill
            155, the E3oa.rcl
                           of IilvuranceComisoloners, by author-
            ity delegated to it ti&?i-Sectiozi25, i3sued en
            0ffPcla1 order T?hichread3 in part a3 follows~
,



          Honorable Charley Lockhart, Pago 2
    /“-



                          @'The first annual premium paid
                    'by a new member, or assessmentspaid
                     in the first year by such new member,
                     msy be consideredas a membershIp fee,
                     but in such case the association is
                     required to pay out of the Expense
                    -Fund all claims occurring on policies
                     Sn their first year,'
                    'It now becomes necessary for the purpose of
               safeguardins the interest of first year policy-
               holders to require such associationsto make a
               deposit to be held as a guaranty fund to insure
               payment of claims arising in the first policy
               y8ar. (It should be remembered that a small per
               cent of mutual associationselected to adopt the
               annual membership plan,)
                    "The laws prohibit the payment of claims
               arising in one group or class from funds belong-
               ing to another'group or class, The deposits
               now held by the State Treasurer in accordance
    -
               with Section 6 of Senate Bill 135, vere made
               vith funds belonging to other thsn first year
               policyholders and could, therefore, be used for
               their benefit only.
                    'In reqdiring such associationsto make
               deposits to be held in trust for the purpose of
               guaranteeing the payment of claims that may not
               be paid from Mortuary Funds in which first year
          .    policyholders have no Interest, the Board is
               confronted with the necessity of providing an
               authorized depository.
                    "Inasmuch as first year pol.lcyholdersof
               s&h associations have no lawful interest in the
               deposit now maintained, and in the light of the
               lav which requires that a deposit for the protcc-
               tion of policyholders1benefits be made with the
               State'Treaourer,you are respectfullyrequested
               to give considerationto the acceptance of such
               deposits for the benefit of policyholder:whose
               interests are not otherwise safeguarded.
                    FOP the purposes of this opinion we do not think it
          necessany to pass upon the conclusionsas stated in the letter
          .



.                                 . .:
                                     ._




                          i



    ,0Y       .




                  Honorable Charley Lockhart, Page 3


                  last quoted above;
                           Article 4374, Vernon's Annotated Civil Statutes
                  SpeCiiiCallyprovides:
                           "....The treasurer shall not keep or re-
                      ceive Into the buildings, safes or vaults of
                      the Treasury any money, or the representation
                      of money, belonging to any individual except
                      In cases expressly provided for by law...,
                            After carefully considering Sen*t&:BillNo. 135,
                  Acts of the 46th Legislature, lgjg, ve find no provisions
                  therein authorizing the Board of Insurance Comnmiss.'.oners
                                                                           to
                  require the deposit mentioned above. Neither do we find any
                  providion in said Act authorizing the State Treasurer to ac-
                  C8pt and hold as custodian ths additional deposit ~abovcre-
                  ferred to.
    /--
                            Therefore, your question is respectfullyansuorcd
                  In the negative. .
                           Trusting that the foregolng fully answers your ln-
              .. quiry, ue are

                              .
                                                                         Very truly yours
                                                                 ATTORNEY GEIE3RALOF !LTXAS

                                                                 BY a14.h-cu&

                                                                              Ardell Wlllams
                                                                          :         Assistant

                                                                     :
                  All : Ali
                                          -APPROVEDDX 14, 1940

                                           U%d              c
                                          ATTORNEY GEBRRAI,OR TEAS
