                .            I




                                        THE                   ATTBECNEY    GENERAL
                                                                 CDPT~C~AS
cxz*wFORD             c.    .XARTIN
                                                                 AUSTIN,TEXAR                                78711
  A-l-rORNEY GENERaI.

                                                                                 July        13,       1972



       Honorable                  Robert             S.     Calvert                                        Opinion                No.        M- 1170
       Comptroller                      of Public             Accounts
       State        Finance               Building                                                         Re:              Authority            of Comptroller
       Austin,             Texas              78711                                                                         to issue           warrant          for       state’s
                                                                                                                            matching             funds        for     em-
                                                                                                                            ployees’           life     insurance               under
       Dear         Mr.           Calvert:                                                                                  circumstances                  pres~ented.


                       Your             recent            opinion          request               involving                the    above         captioned            matter,
       asks         whether              you         now     have         “authority                to issue               a warrant             to pay         the    State’s
       matching                  for    life         insurance             for       employees               prior              to the       issuance           of a group
       policy         to the            Water             Quality         Board?            ‘I


                       You             have      stated          that       on or       about             May         1,        1972,      the    Texas         Water
       Quality             Board          submitted                 accounts            which             appeared                to you         from      your        ex-
       amination                  were          issued        for       life     insurance                 to employees                      of the Board               by
       the     Tennessee                      Life        Insurance              Company               and       such            did    not    involve          a “group
       policy        ‘I in contemplation                            of Articles                  3. 50 and                3. 51 of the           Texas          Insurance
       Code.           Your             basis         for     this      objection                was       apparently                   that     on the        face       of the
       policy         it was             not     shown           to have             been         issued         to the           department              and there-
       fore         could         not have                satisfied            the    provisions                 of Article                3. 51,       wherein            only
       the     department                      head        has      the     authority               to procure                   the     contracts            of insurance.
       Attorney              General                 Opinion          No.        M- 1109 ( 1972.                      )


                       You             also      advise          that       since       the        date      of your               objection            and     refusal          to
       pay      the        State’s            matching              part,        your            objection                has     been        corrected             to your
       satisfaction                    and      you       now       find       that     the Board                has            the proper            policy        for      the
       payment              of the            insurance               premiums                   involved.                  You        now     desire         to know
       whether              you         can      legally         pay        the State’s              matching                    part    for     the account               to
       cover         the period                  for       which          submitted,                that        is,        for     that, time           prior         to the
       correction                  of the policy.


                       We          have         before           us    Tennessee                   Life      Insurance                  Company            Policy          No.
       2357,          dated            December                22,        1971,         signed            by Hugh                Yantis,         Executive             Director




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Honorable            Robert            S.      Calvert,                page       2                (M-1170)




of the      Texas          Water            Quality            Board,             effective           January             1,     1972,         which      was
the policy           under           which         the permanent                       life     insurance               was       issued         to the
employees              and      supported                 the        accounts           which            were      found         by you         to be         ob-
jectionable            as above              recited.                   The      employees                had been              issued         separate
certificates              which           constituted                 a part          of the        group        policy.


               A close           examination                     of the policy                 and        certificates                reveal      that     they
are     subject           to no legal              objection                and were               and     are     at all        times          in order,
and     you      had      and have             authority                to pay         the      state’s          portion          of the        same       for
the period           in question.


               The      other          account             submitted               to you           for     payment             involved          the     group
health        and    term         life       insurance                  policy         of the        Tennessee                 Life      Insurance             Com-
pany,      being          Policy           No.       2358,             issued          and to become                    effective             simultaneously
with     the      other        policy.             It was            also        signed        by the           Executive              Director           of the
Department                and     no legal               objection               is found           to such           policy,          and you          have        had
authority           to make            payments                  for       the    employees                 at all       relevant             times.


               The        so-called              corrective                 action           taken        by the        insurance               company             was
to amend            the       Policy         Certificate                   No.     2358         so as to eliminate                       two     numerical
designations               of the policy;                  and for               accounting               purposes              Certificate             No.         2358
is also        identified            as No.              2357,          thereby              eliminating              the      dual      numerical             desig-
nations        to which              we     understand                   you      had        an objection.                  Such        corrections                 re-
late    back        to the        inception               of the policies.


               The      amount              due      under             such      policies            from        the      employees              was       in fact
deducted           from         their        pay         checks,            and        the    insurance               company             has     at all       times
recognized              its     liability            and paid              its    claims,            and has            at all         times      requested
payment           of the        amount             due         it.      The      company             has        at all      times         recognized                that
the policies              are      in full         force             and      effect         and    in any         event         is    estopped           in law
to deny        liability          under            its    policies               on the        ground            of alleged             non-compliance
with       the      statute.              Great          American                 Indemnity                Co.     v.     Blakey,              107 S. W. 2d
1002      (Tex.        Civ.     App.           1937,           error          dism.          ); Dillard          v.     Nueces           County          Naviga-
tion     Dist.       No.        1,     etc.,         214 Fed.                 Supp.          868 (S. D. Dist.                  1963.      )


               It is our           opinion           that        you        have       authority             to issue            your         warrant         to pay
the     state’s        matching              for         the     life      insurance               for     the     employees                  of the     Texas
Water         Quality          Board           for       the period               of time           in question,                 there         being      a legally
enforceable               group           policy          covering               the    insurance                at all        relevant          times,          and
such     purpose              being         specified                by law.



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Honorable           Robert          S.    Calvert,           page   3        (M-1170)




                                                        SUMMARY


                            The      Comptroller               of Public     Accounts                has    authority
            to issue          his        warrant       for    payment       of the          accounts         in question
            for      the    period         involved,          as    submitted          by    the     Texas      Water
            Quality          Board,          being      the     state’s    matching            part        on the     two
            insurance             policies          issued      by the     Tennessee               Life     Insurance
            company,                since     the policies           in question            were       at all       rele-
            vant       times        group         policies      within     the    contemplation                 of Ar-
            ticles         3. 50 and         3. 51,      Texas       Insurance          Code,         and     for     a
            proper          purpose           specified         by law.


                                                                    Y”YY        very        truly,




Prepared          by    Kerns            Taylor
Assistant         Attorney           General


APPROVED:
OPINION           COMMITTEE


W. E.      Allen,          Acting         Chairman


James       Hackney
Jack    Goodman
James       Quick
Jim     Swearingen
John    Banks


SAMUEL            D.     MCDANIEL
Staff    Legal         Assistant


ALFRED            WALKER
Executive           Assistant


NOLA        WHITE
First     Assistant


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