- -



### THEAYTOHNEY GENERAL
OFAUSTIN 

### aa.

-s N

Ron. R. L. Dsnlel,Chairman' Board of Insureme Ccmmlesionem IandOfflceBuilding 

### Austin,

!l!exaa

Dear sir: 

### Febrnary 3, 1939



## opinionPO. 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 queetlonwlthreepeotto the jolntoontrolof theBoard of IumrameCumLtaelcmem anU the Attomey-IlwFaotofaL&oyds Inmrenoe Canpuny,

hae been referred lwthe writer 

### for attention.

_.. In order t&at the~baeis 

### for your queatian~amd lib6 ~mer herein givenmightbebettermderstoob byallaffectedby'thia oplnlon,We set out UlepertlwntpaFLe 

### of pnn'letter, wblchareas foUom3r "
~( ~"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 baelneeetder tbie Chapter, unleee t&e net aeseta,

M defined,

belmging to such undemritere at Iibyde,shallbe ae much aa $10,000additional for each additional

kind of lnsman~e designated in 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,aasete of the organlzatiq.

Thel3UGIZSEAHERICAU L.LDtDS of8anAntoniehas heretoforeplaoed$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 aasetaand wishee to be licensed to write an addItIona line of iriearanoe. However, they are taldngthe positionthat this eddltiona1$10,000, over aa above the.$60,000 previouely

plaoeaunder joint”

.

.~ Ron. R.-L. Daniel,

Febntary

### 3, 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 oontrlbntlon



### of tie a&lltional$1O,OCObe00naldereb atall If the Board hae no oontrolover it2 We will 

### ask yvu to pleaeegiveue your opinionee to whether ornottbe ad<lcmal $lO,OCG,

over 

### and above the 

### $6O,OOOn0wumier joint control, which the oaupanynou deeireato place in ite aeaetefor a pennit to mite one additional liae shouldaleo be placed under the jolntcontrolof theBoard of heurauce Caumleaionera and the attorney-in-faot for the orgsnlzsticn, or ti It euffioIent

for the tm&rwritera to chow that theyhave 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 thatwe aeaertain the legislative

Intent18 the pseaageof all the ertloles 

### ino0rp0r8tea inChapter 19, Revisad.ClvilStatutee of Texae of 1925. , j '~ */ .'. ~..,. Article 5017 rea&e ae iollmler ,;:: ,,~ ..~,i, ; j :t,:.,~ ~.

2 ;J,<; .,~ go attorney

ehallbi I.&&&i for .ths ur&wriGre ;,.

i.1: '~ 'I..~., ataLl.oyd'e under this ohapteruuleeetbenetsseete, 

### 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 thirdarticleof thIe chapter,

uulese the netaeeete, ae they are herein definedbelonging

to auoh underwriters atUoyd'6, ehall ': 

### be (LB mmch as ten thouf~enadollars sdditi0nai for 

### each additional

kin& of insurauoe

aeeiguated

in the application for lioenee.'

Artlole5017e ie the only articleof our etai&ae provI&lng for aud establieh~ jointoontrolover fide of a Lloyd'sand readsl

"The aesetsofuuderwritere ata Llofi'eto the extentoftheminlmt7m

### reqtm3a uoder the provisIons of this ohapter

ehallbe subdtte8 to * eubjected to the jointooutrolof 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,shallbe

~.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 placedmder the joint controlof such attorneyin fact ed theBoard (LB andwhen the same is payable. Provlfled, however, in lieu of aaah jointcontrolauy attorneyIn faot at a Lloyd% now 

### doing bueluees Iu 

### tblsStatemay give baad Iu the sum of twentyfTve thousfuui



### a0uara for the cafe lraepiug of aaseta,to be rdessed onlyonapprovalof theBoard of1usurauc.e Camiseloners,

### aa in suah form 

## ana with co-operate 

## surety
aa ehallbe approvedby theBoard of Insurance Cammiaslouera."
Itwillbeuoted that such joiatocM.rolia provide4for "to the extentof them5nImnunder the provialona of th3.e

ahapter." The '~ rinlmrrmeetablIehedbyArtIole 

### 5017 la $6O,OOO,buttowhattypeob'oanpeny la themiuImmuof$6O,OCOapplIoable? "Ihavery lenguas lnArtlola 

### 5017 makes .It

dear that euohminimum of $60,000 is applloable to a OQLpanyllmitad to writlugone 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 llaeneeoan t)eIseuea by the Board of &sunmoe%u%%%?$?&~ W three line6 are tObewrItten, the admiaslble aesets lucl&&the tyfund,mattotal.$80,000r
r This increase ofaeeeta lufmouu@ of 10,000 per lide cantimes until every

## kba or line 

## of lumuMce:~~teP In, au¬otierwIae prohibited ByArticle 

### 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:lu 

### proriabg joint&x&o1 Of the assetaof each compiuy,~waa nvitifeatly

t0 createa safe&ml, bJ vhIEh the amete 80 contributed regmdleaa of the ehiuta UA%of,cod&be held seoure for the benefit

### of the polIoyh6ldera. In oamylug out Ruoh pwpoae, they 

### provlaed by Article 5017e,for jointcontrolto the extent, of the minimum eetabli6hed.

It 

## :ifd, merefore, fae 

## 0pinim of 

## this a4pa.t-h3d, ahd yea eu-0 80 adrie6a that the $10,000.00 over 81~3

abem'ti+ $60,000.OO,,ntim&r jointoCmtrol,whioh theEIKW3E AMXICAR I3MDs of San Ant+0 proposes to oontrIbute

for the purpoaeof~eeourlng 

### a liceme to write.~other 1Iue of lumranoe, muat be plaaedm&r the Jointcoutrolof'th~--attorneyIn-fact

ami the Roard of In.9uzanc.e Camlseioner.9. Trustingthatthla au8wem your inqulry,we are

Youra very truly -0FTBxAs ATIQWBY -oFTExAs Assit3tant U:ob-da