- -
THEAYTOHNEY GENERAL
OF-
AUSTIN aa.-s
N
Febrnary
3, 1939
Ron. R. L. Dsnlel,Chairman'
Board of Insureme Ccmmlesionem
IandOfflceBuilding
Austin,!l!exaa
Dear sir: opinion PO. o-222
Rei Uhethar the Board of Inmnance~~
camdae1onera BhoddhaYe jolnt
oontml over mm8 of mcmey In
exoeae of $60,000.00 of a
LloyaE Ineurauoe co. r
‘,
Tour latterof January 24W, 1939 to t&la bepartamt,~w+emin
you aeka queetlonwlth reepeotto the jolntoontrolof theBoard of
IumrameCumLtaelcmem anU the Attomey-IlwFaotofaL&oyds Inmrenoe
Canpuny,hae been referred lwthe writer for attention.
_..
In order t&at the~baeisfor your queatian~amdlib6~mer herein
givenmightbebettermderstoob byallaffectedby'thia oplnlon,We set
out UlepertlwntpaFLe of pnn'letter,wblchareas foUom3r "
~( ~"Art%dls5017 prodA& that before
L 'unatterney4n-faot
aclpl
be~~~li&emd'for lmdelwrit6re.at8 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 transactmore than
one kid of baelneeetder tbie Chapter,unleee t&e net
aeseta,M defined,belmging to such undemritere at
Iibyde,shall be ae much aa $10,000additionalfor each
additionalkind of lnsman~e designatedin the application
for Hoed. Article 5017e providesfor the joint control
by the~+Wnrneydn-faot for the:~derurlte~ and the
Board of lamrame Caumisslmars of tbe,aaseteof the
organlzatiq.
Thel3UGIZSEAHERICAUL.LDtDSof8anAntoniehas here-
toforeplaoed$6O,OOOrmder joirrtoontro&oftheBoard
of Inmranae Ccmmiesimerfiana the aWorney-in-factfor
8aia cmpany. saia orgmization nuu aewe to contribute
$lO,OOOmore to its aaseta and wishee to be licensedto
write an addItIona line of iriearanoe.However, they
are taldngthe positionthat this eddltiona1$10,000,
over aa above the.$60,000previouelyplaoea under joint
” .
.~
Ron. R.-L. Daniel,Febntary3, 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 statutela not qulte clear as to what
ltmeana tie queetIm vhloh arleee ia: why ehould the oon-
trlbntlonof tie a&lltional$1O,OCObe00nalderebatall
If the Board hae no oontrolover it2 We will ask yvu to
pleaee give ue your opinionee to whether ornottbe ad<lcmal
$lO,OCG,over and above the $6O,OOOn0wumier joint control,
which the oaupanynou deeireato place in ite aeaete for a
pennit to mite one additionalliae shouldaleo be placed
under the jolntcontrolof theBoard of heurauce Caumleaionera
and the attorney-in-faotfor the orgsnlzsticn,or ti It
euffioIentfor the tm&rwritera to chow that they have this. I~
addItIonal$lO,COOin the handa of the attorney-in-faot'l"
Be qpeetloneuhdttedinvolveanot only a conetruotion
of Artlola 5017~5017e'of our etatutea,but requires that we aeaertain
the legislativeIntent18 the pseaageof all the ertlolesino0rp0r8tea
inChapter 19, Revisad.ClvilStatutee of Texae of 1925. ,
.'. j'~*/
~..,.
Article 5017 rea&e ae iollmler ,;:: ,,~..~,i,; j
:t,:.,~ ~. 2;J,<;
.,~
go attorneyehall bi I.&&&i for .thsur&wriGre ;,.i.1: '~ 'I..~.,
ataLl.oyd'e under this ohapteruuleeetbenetsseete,
iaclndhg tie wt.y fend 0ontributd to tie attorney,.;; !~::~:
aecmdttee ofundexwrltere,tnzeteeeorotheroffloere
e prOr-~ for h ag &McJ& of @&b+,t, &&J be, ,.b:, -1,::,, ,..
at lee& sixty tJmae.snd aoliara inoaeh, or convertible,
edmdssbleseoidtlee; nor shall auy attorneybe lAomead : .:"
for enyuuderwritereataLloyd'e to trmeaotmcm then
one kiPdofbueinese aa defined in the thirdarticle of
thIe chapter,uulese the netaeeete, ae they are herein
definedbelongingto auoh underwritersatUoyd'6, ehall ':
be (LBmmchas ten thouf~ena dollars sdditi0nai for each
additionalkin& of insurauoeaeeiguatedin the application
for lioenee.'
Artlole5017e ie the only articleof our etai&ae provI&lng
for aud establieh~ joint oontrolover fide of a Lloyd'sand readsl
"The aesetsofuuderwritereata Llofi'eto the
extentoftheminlmt7mreqtm3a uoder the provisIonsof
this ohapterehall be subdtte8 to * eubjectedto the
joint ooutrolof the attorney-in-factfor such urderwritere
and theBoard of IneurauoeCamleeiouere, iu 6Omemmuer
satisfactoryto theBoar&, 80 that the sememaynotbe
vithdrawnor diverted,or expended,exceptwith the
approvalof the Board au& the purpoeeeprovldeclfor in
this ohapter.'Suchuuderwritere, however,shall be
~.
Eon. R. L Dauiel,Febnmry 3, 1939,page 3 (O-222)
editled to the intereator lnoolne a~cn~ingfruris~h
propertyor aecurltleeae may be placed mder the joint
controlof such attorneyin fact ed theBoard (LBandwhen
the same is payable. Provlfled,however, in lieu of aaah
joint controlauy attorneyIn faot at a Lloyd% now doing
bueluees Iu tblsState may give baad Iu the sum of twenty-
fTve thousfuuia0uara for the cafe lraepiugof aaseta,to
be rdessed onlyonapprovalof theBoard of1usurauc.e
Camiseloners, aa in suah form ana with co-operate surety
aa ehallbe approvedby theBoard of InsuranceCammiaslouera."
Itwillbeuoted that such joiatocM.rolia provide4for "to
the extentof them5nImnunder the provialonaof th3.eahapter." The '~
rinlmrrmeetablIehedbyArtIole5017 la $6O,OOO,buttowhattype ob'oan-
peny la themiuImmuof$6O,OCOapplIoable? "Iha very lenguas lnArtlola
5017makes .Itdear that euoh minimum of $60,000 is applloableto a 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 $60,000mpuired to vrlte~~tii line of Tnsuranae.. llhae,
Ifaocdupaufld towrite two line8 of ¶nstammm,
a llaeneeoan t)eIseueaby the Board of &sunmoe%u%%%?$?&~
W three line6 are tObewrItten, the admiaslbleaesets lucl&&the
tyfund,mattotal.$80,000r This increaseofaeeeta lufmouu@ of
r10,000per lide cantimes until every kba or line of lumuMce:~~teP
In, au¬otierwIae prohibitedByArticle 5015,may be written. ,Ine+h
of theme caeee the amomt of miaimnm m-ma ie hitea end cohtx0Uea~~
solelyby the dumber of lines of..~lumranoe to be written.
l?+ terypurpose~of the Legislat&ei:luproriabg joint&x&o1
Of the assetaof each compiuy,~waanvitifeatlyt0 create a safe&ml, bJ
vhIEh the amete 80 contributedregmdleaa of the ehiuta UA%of,cod&be
held seoure for the benefitof the polIoyh6ldera. In oamylug out Ruoh
pwpoae, they provlaed by Article 5017e,for joint controlto the extent,
of the minimum eetabli6hed.
It :ifd, merefore, fae 0pinim of this a4pa.t-h3d, ahd yea eu-0
80 adrie6a that the $10,000.00over 81~3abem'ti+ $60,000.OO,,ntim&r
jointoCmtrol,whioh theEIKW3E AMXICAR I3MDs of San Ant+0 proposes
to oontrIbutefor the purpoaeof~eeourlnga liceme to write.~other
1Iue of lumranoe, muat be plaaed m&r the Joint coutrolof'th~--attorney-
In-factami the Roard of In.9uzanc.eCamlseioner.9.
Trustingthatthla au8wem your inqulry,we are
Youra very truly
-0FTBxAs
ATIQWBY -oFTExAs
Assit3tant
U:ob-da