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        OFFICE    OF THE     ATTORNEY    GENERAL      OF TEXAS
                                AUSTIN
QROVL” SLLLIII*
-.
Aly”“SV OCWlllL
                        ,-      .

  Xoaorable’ George B. Butler,      Cheirman


  Dear Sirb




                                                   ciotion,  would said
                                                   ons be operating   In
                                                     Of Art. 4875a-4,
                                                   s.7      Ana        related


                                                   letter         of    reoent   date



                                         under Chapter 9a, Title

                         lroumatanoear
                         ae is an officer   or director. of”
                         iation and.the other spouse an
                         r direotor  of another aasooiation?
                     your answer be different    if one of                          .
              the spouses owned all or a part Interest      in
              the Funeral ~iome designated  in the policies
              through which burial   merchandise or service6
              will be performed?
              aAn officer    or direotor  of each of two or
              more associations     own an interest  in the
              Funeral Eonie designated    in the qolioies    of
              the assooistions     es the ones through whioh
              the burial. merohaudise and ssrviaes      will   be
              furnished?                   s
                                                                           ‘:i     739

soion:George B. Butler,’        page 2
                                                                           -
    .       “Two or more aesooiatione     have designated the same
            Funeral Xoae as the one to furnish merchandise and
            servioes under the polioiee     of the assooiation,    but
            none of the offioere    or direotors   of the associations
            have any finanoial   interest   in the Funeral Home?

        . “1s it permissible  for an agent to have an appoint-
          ment from two or more assoolations  and to write a
        , policy in both aseooiationa  on one individual?

.           “In. it permissible   for two ~asaooiations to oooupy the
            fame quarters and share the maintenance expeneee of
            rent, utilities    and so forth; may they Jointly employ                     3.
            the came personnel to work for both associations        and
            to pay them proportionately     from each asaociation?n

   A&Sole 5068-1,         Vernon*e.Annotated     Civil   Statutes,   provide8
                                                                                              . .T.



in part as follows:
         We&ion 1.       Thie Act shall apply to and embraoe all
     insurance companies and associations,           whether incorporated
     or not, which Issue polioles         or certificates     of insurance
     on. the live6 Of persona, or provide health and accident
     benefits,     upon the ao-called     mutual aaaesament plan, or
     whose funds are derived from the aaeeaamenta upon its
     polioy holders or members, and shall,            in fact, apply to
     all life,     health and aocident companieo or associations
     which do not come within the provisions            of Chapter 3,
     Chapter 5, Chapter 7, Chapter 8, Chapter 9, Chapter 18,
    :Chapter 19, or. Chapter 20, Title 78 of the Revised Civil
     Statutes     of Texae,     This Act shall include local mutual
     aid associational       state-wide   life;  or life,    health and
     aooident associations;        mutual aseessnent life;      health
     and aooident a         oiationa;   burial associationsi      and
     similar oono ne, by whatsoever name or olaas aeeignated,
     whether,/ a oifioally       named herein or not,n(Undera.coring       ours)
               .,’                                                     .,.
         II* * *

           “SBO, 2. The follo&g.         terma when used in this     Aot
        ehall be defined:
            II* * *

           “~Assessment’ ehall include premiuma and mean any
        and,all money or valuable thing paid in oonslderetlon
        of &oh insuranoe as is afforded   by the certifiCate.

            “‘Uemberahlp fee’ shall be the amount of the first
        assessment or assessments permitted by the Board to be
        placed in. the expense fund of aesooiations, represent-
        ing cost of soliciting  or proourlne the member.
            II* * *
                                                            ;.
                                                                   740



, George D. Butler,    page 3

       *Sec. 12. Assessments when collected        shall be
  divided. into at least. two (2) funds.      One (1) of these
 .&all be the mortuary or relief     fund, by whatever name
 it may be called in the different      associations,     from
 which-claim8 under oertificatea     shall be paid, and to
 a limited extent the cost of defending oontested alains,
 and nothing else ; and the other funds ehell be the ex-
 pense funds from which expenses nay be Daid.           At least
  sixty (6~;;) per cent of assessclonts    collected,    exoept
 the membership fee, must be plaoed in the mortuary or
 relief   fund.  The mortuary or relief     funds may be
  invested only in such securities    as are a legal invest-
 ment for the reser.ve funds of stock life        inauranoe com-
 panies.
      II*.* *                ‘.

      @Sed. 23.   Any individual,     inaieiauaLa,    firms,
 co-partnershipa,    corporations    or asaooietions      doing
 the business of providing burial or funeral benefits,
 which uwler any circumtances        may be payable partly
 or’ wholly. in nerohandise or services,      not in excess
 of One Wndred and Fifty (4150.00) Dollars,           or the
 value thereof,   are hereby declared to be burial
 companies, associations     or societies,     and shall
 organize under provisions      of Chapter 274, Acts of
 the Forty-first   Legislature,     1929, and a@n&ents
 thereto;   and shall operate under and be ~;governed by
 Chapter 274, Aots of the Forty-first        Legislature,
 1929, and amen&vents thereto,       and this Act.      It
 shall be unlawful for any individual,         individuals,
 firms, co-partnerships,      corporations,    or aaaooiationa,
 other than those defined above, to engage in the busi-
 ness of providing burial or funeral benefits,           which
 under any oiroumatances may be paid wholly or partly
 in merohandise or servioes.
       %eo. 2J+. Polioies      or oertifioatea     issued by
 burial associations      shall provide for payment of the
 benefit in certain stipulated        nerctiandise snd burial
 service,    which shall be acne&Led in thQ PllCY Or
 ztific*te      and aDproved by the i30ard Of insurance
 comm:--wrs        as being of tha re asonable value as
 stated in the faoe of the polioy,          unless the i,insured
 shall at the time said policy is ie,eued elect to have
 8aae paid in cash.       The-policy    shall show in writing
  the election    made. If the assooiation        issuing said
 policy shall fail or refuse to furnish the merchan-
 dise and services     provided for in the polioy,        aame
  6hal3 be paid in cash.“~ (Underscoring          ours)
               Art. 4875a4,   V. k. C. a.,   providea:
    f:
                   wTh+% ahall be no oonreotion   between any two
    i          aesoolationa  operating under thle la%? eml no one
    I~         asaooiation  ahall ooatribute  anythlnc by way of
i
    ;
    T          salary or conpccaation   to any exooutive offiosr
               for the purposes of ouoh other aesooiatlon.n
    r$    .    Your first  question wna answered in this departmnt~e
         ~~1nlou lie. O-2879.   Dy that opfniou, in affeot, we mid that
    t    because there was 8 fanily relatioushlp   between the offlcere
    ;    0s two burial asaopistiona,   Art. 4875a4 waB not viclated.
               In andlwer to your eeoond queetion,   it ia our opinion
         that in the sbsecoe of any statutory   prohibition    where on%
         ~pouee oxns an fntcroot  ic or ouna all of 4 r’unsral ikw~ deal&
         Lstod in the polioy OS a burial assoalation     through which burial
         sm9mndise ox eeruicsoare to be furnished,        he, or the other
         B;OUBB,my serve as an offioer    or direotor of such asoxietlon.
               In view of w&t WJ hove eald above,        your third    guctrtion
         Is anawcrgd in the negative.

                In view of our Opinion lie. O-2fV9, a copy of which was
         heretofore   Sumiohud you, orid becciuse of what w have bald in
         mower to your aaoond e&d third quettlons,     WC enawer y0u.r fourth
         qucstlon ln the negative.
               It ia our opinion that your fifth question should bo
         tnewerod in the a’ffirnative and It ia 80 ornxered.

               In answer to your sixth c;uestion, it itr our opinion that
         the sot of faots as stated doe6 not violate Art. kS7544,ae    a
         Utter of law.

              Wa trust that the aboYe.nnd’fore&oing        setlsfaotoril$
         Wnera your inquiries.
                                                     Pours very truly,
