State Board of Insurance v. Sam Houston Life Insurance Co.

344 S.W.2d 709, 1961 Tex. App. LEXIS 2162
CourtCourt of Appeals of Texas
DecidedFebruary 22, 1961
DocketNo. 10826
StatusPublished
Cited by3 cases

This text of 344 S.W.2d 709 (State Board of Insurance v. Sam Houston Life Insurance Co.) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
State Board of Insurance v. Sam Houston Life Insurance Co., 344 S.W.2d 709, 1961 Tex. App. LEXIS 2162 (Tex. Ct. App. 1961).

Opinion

ARCHER, Chief Justice.

This suit was instituted in the 98th District Court of Travis County, Texas, by Sam Houston Life Insurance Company against the State Board of Insurance and the Commissioner of Insurance seeking to have set aside and adjudged invalid certain orders entered by said Board and Commissioner affecting two of Sam Houston’s life insurance policy forms. The trial court held that the orders in question withdrawing an exemption from the terms of Article 3.42 previously accorded the forms in question were null and void as the policy forms had been approved by operation of law.

The questions in this case involve the proper construction of Article 3.42 of the Insurance Code, V.A.T.S. The merits of the policy forms themselves are not involved.

Appellant contends that the effect of the judgment is to hold that “the thousands of policy forms on file with the Board under the ‘old’ Article 3.42 have become automatically approved under the more complex and stringent requirements of the 1957 amendment to such article, despite the exemption orders entered by the Board and the Commissioner pursuant to paragraph (e) of Article 3.42, and despite the legislative direction that each policy form be subject to scrutiny under the new law.”

Article 3.42 formerly provided:

“Life insurance companies shall, within five (5) days after the issuance of, and the placing upon the market, any form of policies, of life insurance, file a copy of such form of policy with the Board of Insurance Commissioners.”

Under this statute the Board would check policy forms tendered for filing to determine if such complied with the law. Any obj ections were communicated to the company so that required changes could be made, [711]*711and when changes were made the forms were marked "filed,” thus connoting final acceptance of the particular form. This procedure was under the general duty and responsibility of the Department to see that the laws relating to insurance companies were obeyed.

Senate Bill 438, effective August 22, 1957, amended Article 3.42 in several particulars, which read in part as follows:

“(a) No policy, contract or certificate of life, term or endowment insurance, group life or term insurance, industrial life insurance, accident or health insurance, * * * hospitalization insurance, group hospitalization insurance, medical or surgical insurance, group medical or surgical insurance, or fraternal benefit insurance, and no annuity or pure endowment contract or group annuity contract, shall be delivered, issued or used in this state by a life, accident, health or casualty insurance company, a mutual life insurance company, mutual insurance company other than life, mutual or natural premium life insurance company, general casualty company, Lloyds, reciprocal or inter-insurance exchange, fraternal benefit society, group hospitalization service or any other insurer, unless the form of said policy, contract or certificate has been filed with the Board of Insurance Commissioners and approved by said Board as provided in Paragraph (c) of this Article.”

Paragraph (c) reads:

“(c) Every such filing hereby required shall be made not less than thirty days in advance of any such issuance, delivery or use. At the expiration of thirty days the form so filed shall be deemed approved by the Board of Insurance Commissioners unless prior thereto it has been affirmatively approved or disapproved by the written order of said Board. The Board of Insurance Commissioners may extend by not more than an additional thirty days the period within which it may so affirmatively approve or disapprove any such form, by giving notice of such extension before expiration of the initial fifteen day period and at the expiration of any such extended period, and in the absence of such prior affirmative approval or disapproval, any such form shall be deemed approved.”

Paragraph (d) provides that the grounds of subsequent disapproval shall be stated.

Paragraph (e) reads:

“(e) The Board of Insurance Commissioners may, by written order, exempt from the requirements of this Article for so long as it deems proper, any insurance document or form specified in such order, to which in its opinion this Article may not practicably be applied, or the filing and approval of which are, in its opinion, not desirable or necessary for the protection of the public.”

Paragraph (f) reads as follows:

"(f) The Board of Insurance Commissioners shall forthwith disapprove any such form, or withdraw any previous approval thereto if, and only if
“(1) It is in any respect in violation of or does not comply with this Code.
“(2) It contains provisions which encourage misrepresentation or are unjust, unfair, inequitable, misleading, deceptive or contrary to law or to the public policy of this state.
“(3) .It has any title, heading or other indication of its provisions which is misleading.”

On the effective date of S.B. 438, there were over 32,000 policy forms on file with the Board.

On July 10, 1957 the Board issued its order No. 453, as follows:

“ * * * It is shown to the Board that many thousands of insurance poli[712]*712cy forms have been filed with the Commissioner of Insurance or the Board of Insurance Commissioners under various laws dating back to approximately 1909, and that the approval of such of said forms as are currently in use will become an immediate burden of the Commissioner of Insurance unless an exemption is granted under authority of Article 3.42, Texas Insurance Code.
“Premises considered, the Board, deeming such action proper for the systematic approval of policy forms currently being filed and recognizing that it is impossible for the Commissioner of Insurance to make immediate review of all forms heretofore filed, hereby declares a policy of exempting from Article 3.42 the following forms, pending such time as the Commissioner is able to review, and approve or disapprove, currently-submitted forms:
“1. All those forms whose approval is required by Article 3.42, as amended, provided such forms shall have been approved or filed with the Board of Insurance Commissioners, the State Board of Insurance, or the Commissioner of Insurance prior to August 22, 1957. As herein used, ‘filed’ refers only to those forms which have been accepted for filing, and does not include those forms which have merely been submitted for filing and whose formal acceptance for filing is pending.
“2. All those forms whose approval is required by Article 3.42, as amended, provided such forms are issued by any society, company, or other insurer whose activities are by statute exempt from the control of the State Board of Insurance and the Commissioner of Insurance and which is not entitled by statute to an exemption certificate from the State Board of Insurance or the Commissioner of Insurance.”

Pursuant to Board Order No. 453, the Commissioner on July 10, 1957 issued his order No. 55. This order provided for the same class of exemptions and directing each insurer to prepare a list of all of its forms exempt thereunder which it intended to continue using in Texas.

Comissioner’s Order No.

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344 S.W.2d 709, 1961 Tex. App. LEXIS 2162, Counsel Stack Legal Research, https://law.counselstack.com/opinion/state-board-of-insurance-v-sam-houston-life-insurance-co-texapp-1961.