Case Information
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THEAYTOHNEY GENERAL OF-
AUSTIN aa. -s
N
Febrnary 3, 1939 Ron. R. L. Dsnlel, Chairman'
Board of Insureme Ccmmlesionem
IandOfflceBuilding
Austin, !l!exaa opinion PO. o-222 Dear sir: Rei Uhethar the Board of Inmnance~~ jolnt camdae1onera BhoddhaYe oontml over mm8 of mcmey In exoeae of $60,000.00 a LloyaE Ineurauoe co. ‘, Tour latter January 24W,
1939 to t&la bepartamt,~w+emin you aeka queetlonwlth reepeotto the jolntoontrolof theBoard of IumrameCumLtaelcmem anU the Attomey-IlwFaotof aL&oyds Inmrenoe Canpuny, hae been referred lwthe writer for attention. _..
In order t&at the~baeis your queatian~amd lib6 ~mer herein givenmightbebettermderstoob byallaffectedby'thia oplnlon,We set of pnn'letter, wblch areas foUom3r " out UlepertlwntpaFLe ~( ~"Art%dls 5017 prodA& that before 'un atterney4n-faot L aclpl be~~~li&emd'for lmdelwrit6re .at 8 T&d.@; 6iXepotilt
of at~least $60,000 in otih, or owwertlble, dt&eable eemrlt~eles~aIial1 be pat,up on contributed, and %hat no attotie>-in-faot &all be llc&med to transact more than one kid of baelneee tder tbie Chapter, unleee t&e net aeseta, M defined, belmging to such undemritere at Iibyde, shall be ae much aa $10,000 additional for each additional kind of lnsman~e designated in the application Hoed. Article 5017e provides for the joint control by the~+Wnrneydn-faot for the:~derurlte~ and the Board lamrame Caumisslmars of tbe,aasete the organlzatiq.
Thel3UGIZSEAHERICAU L.LDtDS of8anAntoniehas here- toforeplaoed$6O,OOOrmder joirrtoontro&of theBoard of Inmranae Ccmmiesimerfi ana the aWorney-in-fact for 8aia cmpany. saia orgmization nuu aewe to contribute $lO,OOOmore to its aaseta and wishee to be licensed to write an addItIona line of iriearanoe. However, they are taldng the position that this eddltiona1$10,000, over aa above the.$60,000 previouely plaoea under joint
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Ron. R.-L. Daniel, Febntary 1939, Pege 2 (O-222)
cc&ml, 16 not reqidred to be umber the joint
oontrolof theBoard of IuaurauoeCamnIsaIonere and the attorney-In-fact.
Slnoe the statute la not qulte clear as to what ltmeana tie queetIm vhloh arleee ia: why ehould the oon- trlbntlon tie a&lltional$1O,OCObe 00naldereb atall If the Board hae no oontrol over it2 We will ask yvu to pleaee give ue your opinion ee to whether ornottbe ad<lcmal $lO,OCG, over and above the $6O,OOOn0wumier joint control, which the oaupanynou deeirea to place in ite aeaete for a pennit to mite one additional liae should aleo be placed under the jolntcontrolof theBoard of heurauce Caumleaionera and the attorney-in-faot for the orgsnlzsticn, or ti It euffioIent the tm&rwritera to chow that they have this. I~ addItIonal$lO,COO in the handa of the attorney-in-faot'l"
Be qpeetlon euhdttedinvolvea not only a conetruotion of Artlola 5017~5017e'of our etatutea, but requires that we aeaertain the legislative Intent18 the pseaage of all the ertloles ino0rp0r8tea inChapter 19, Revisad.ClvilStatutee of Texae of 1925. , j '~ */ .'. ~. .,. ,;:: ,,~ ..~,i, ; j
Article 5017 rea&e ae iollmler :t,:.,~ ~. 2 ;J,<; .,~ go attorney ehall bi I.&&&i for .ths ur&wriGre ;,. i.1: '~ 'I..~., ataLl.oyd'e under this ohapteruuleee tbenetsseete, iaclndhg tie wt.y fend 0ontributd to tie attorney,.;; !~::~: aecmdttee ofundexwrltere, tnzeteee orotheroffloere e prOr-~ for h ag &McJ& of @&b+,t, &&J be, ,.b:, -1 ,::,, ,..
at lee& sixty tJmae.snd aoliara inoaeh, or convertible, edmdssble seoidtlee; nor shall auy attorney be lAomead : .:" for enyuuderwritere ataLloyd'e to trmeaotmcm then one kiPdofbueinese aa defined in the thirdarticle of thIe chapter, uulese the netaeeete, ae they are herein definedbelonging to auoh underwriters atUoyd'6, ehall ': be (LB mmch as ten thouf~ena dollars sdditi0nai each additional kin& of insurauoe aeeiguated in the application for lioenee.'
Artlole5017e ie the only article of our etai&ae provI&lng for aud establieh~ joint oontrol over fide of Lloyd's and readsl "The aesets ofuuderwritere ata Llofi'e to the
extentoftheminlmt7m reqtm3a uoder the provisIons of this ohapter ehall be subdtte8 to * eubjected to the joint ooutrol of the attorney-in-fact for such urderwritere and theBoard of Ineurauoe Camleeiouere, iu 6Omemmuer satisfactory to theBoar&, 80 that the sememaynotbe vithdrawn or diverted, or expended, except with the approval of the Board au& the purpoeee provldecl for in this ohapter. 'Such uuderwritere, however, shall be
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Eon. R. L Dauiel, Febnmry 3, 1939, page 3 (O-222)
editled to the intereator lnoolne a~cn~ingfruris~h property or aecurltlee ae may be placed mder the joint controlof such attorney in fact ed theBoard (LB andwhen the same is payable. Provlfled, however, in lieu of aaah joint control auy attorney In faot at a Lloyd% now doing bueluees Iu tbls State may give baad Iu the sum of twenty- fTve thousfuui a0uara for the cafe lraepiug of aaseta, to be rdessed onlyonapprovalof theBoard of1usurauc.e in suah form ana with co-operate surety Camiseloners, aa aa ehallbe approvedby theBoard Insurance Cammiaslouera."
Itwillbeuoted that such joiatocM.rolia provide4 for "to the extentof them5nImnunder the provialona of th3.e ahapter." The '~ rinlmrrmeetablIehedbyArtIole 5017 la $6O,OOO,buttowhattype ob'oan- peny la themiuImmuof$6O,OCOapplIoable? "Iha very lenguas lnArtlola 5017 makes .It dear that euoh minimum of $60,000 is applloable to OQL- panyllmitad to writlug one kind or line of lnmranoe. Before itoenbe licensea to write an edAitlona1 line of tiurauoe, it mmet * 6hm that the &ttomey-id-faothsa InhIe poeeeaaionaaadditional~et~~oi$10,000 her rad ,above ‘the $60,000 mpuired to vrlte~~tii line of Tnsuranae.. llhae,
Ifaocdupaufld towrite two line8 of ¶nstammm,
a llaenee oan t)e Iseuea by the Board of &sunmoe%u%%%?$?&~ W three line6 are tObewrItten, the admiaslble aesets lucl&&the This increase ofaeeeta lufmouu@ of tyfund,mattotal.$80,000r 10,000 per lide cantimes until every kba or line lumuMce:~~teP In, au¬otierwIae prohibited ByArticle may be written. ,Ine+h of theme caeee the amomt of miaimnm m-ma ie hitea end cohtx0Uea ~~ solely by the dumber of lines of lumranoe to be written. ..~
l?+ terypurpose~of the Legislat&ei:lu proriabg joint&x&o1 Of the asseta of each compiuy,~waa nvitifeatly t0 create a safe&ml, bJ vhIEh the amete 80 contributed regmdleaa of the ehiuta UA%of,cod&be held seoure for the benefit the polIoyh6ldera. In oamylug out Ruoh pwpoae, they provlaed by Article 5017e, for joint control to the extent, of the minimum eetabli6hed.
It :ifd, merefore, fae 0pinim this a4pa.t-h3d, ahd yea eu-0 80 adrie6a that the $10,000.00 over 81~3 abem'ti+ $60,000.OO,,ntim&r jointoCmtrol,whioh theEIKW3E AMXICAR I3MDs of San Ant+0 proposes to oontrIbute for the purpoae of~eeourlng a liceme to write.~other 1Iue of lumranoe, muat be plaaed m&r the Joint coutrolof'th~--attorney- In-fact ami the Roard of In.9uzanc.e Camlseioner.9.
Trusting thatthla au8wem your inqulry,we are Youra very truly -0FTBxAs ATIQWBY -oFTExAs
Assit3tant U:ob-da