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<p>&i$j L..;. 
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<p>OFFICEOFTHEATI'ORNEY GENERALOF- 
AIlSTtN </p>
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<div class="ocr">656

Honorable 6. Pe Lockhart, Page &

"I nesune that The Sontherm Underwriters,
under the above facts, is obligated te ite
_ereditora whese claina have aot been fully pald,
and thet on show: ng ef insolvency of The Southern
Underwriters, the facts should be reverted te
yeu for scit lookin: to the arpofotment of 4
receiver for the exchanze. Fl+se@ oonfire or

correct me ag to this.*

Tne ecatrecst of reinsurenee vetween Southern Und ere
writers and United Esployers contains the following provi-
Ore § a

"Thet in consideration of the covenants
and agreenents herelnefier to de kept and per
formed, the United Anplorers hereby arsumen.
und reinsures ali of the pélicles cf ineur-
ange issued cr in the prosvese of ismuing by
the Southern Underwriters, including each and
every klod of policy af insurance and outstand-
ing or wiethor in the prosesa of being issued
py The Southeru Underwritera includiag any
aang all plans cf insurance waich aay have
beratefore baen written cx which ia sow being
writtes or is the sracesa of being written by
Toe Southern Uadervritera, and assumes 011
oatetacdiag miaeurance ovatreecta heretofore
antered inte by and between The Southern
Underwriters acting by end through itw Agent
and Attorney-in-Tect, Southern Underwritera
Corzoration, ani eny and al] ywellid obliga-
ticne, deste or curtent liebiiitieos both sf
na Southera Undersriters er Southers Under~
writera Cor oration,

We ene

“se « « , 1% delag centampleted that on and
fron the effective date of thie contract Uaited
Baployars #hali be fully subrogated to ei].
rights, mmediew, claims end causes of vetion
of Zcutnern Underwriters under the policies of
inguraste reingured herein, aad any otaer rigata
or claims whieh The Southera Underwriters or
the Southern Underwriters Corperation may have
or te entitled to sow or hereafter,
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<div class="ocr">Honorable 0. Pe Loekhart, Page 5

“The Southern Underwriters end Southern
Unterwritere Corporation agree to trensfer,
assign ant convey to United mmployers Casualty
Cocpany as of the effective date of this
agreement, ali of ita assets cf avery kiné
and chersoter, whether real, personal or mixed,
ent whebber adaitted or noueedauitted, iociud~
ing all files, books, records, furniture, fix-
tures, office supplier, sutexzebiles, loans,
eash, notes, bonds, mortgages, reel estate
and any and a1] ether property whatsoever
whether enumescated herein or aot, which if now
owns or which it aay have say right er intere
eat in now or in the future,

"ee ae

“the Southern Underwriters and Southern
Underxritera Corporations aleo tran#fer and
assign all egeney aecounte receivable or
agents debit belances or ether claims ezainst
any agents or other persons whatsoever which
they may have at the effective date of this
contract, or which may arise hereafter cir-
Ang any rights or title or interest to The
Southera Underwriters or Southern Unterwriters
corporation, 7

Me a ae

“5 « @ , it being the purpose to dissolve
The Southern Unterwriters acd Southern Under~
writers Sorporation, and United Repl
Casualty Coapany abserbes the same, it helag
understood, however, thet United Baployers
stall be subrogated te any and eli defenses,
counterciains, causas of sotion and any other
defenses or rights te wrieh either The Southern
Undereriters or Jouthern Underwriters Corpora<-
tier may be entitled,*

The a:ove contraet crovigions clearly indicate an
datention te sall the Southern Underwriters to United Eu-
ployers, “leek, etcoek and barrel", ani under euch circun-
etances it would esem thet the receiver slready appalated
fox United Buployers would have the right to enforces, for
the benefit of creditors, any claim or right whieh belonged
to Southern Underwriters.
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<p>_...“_.. </p>
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<div class="ocr">Honorable 0. P. Lockhart, Page 4

But in case cf insclvensy of Southern Underwriters
at the end of any ealentar year, that reoiprocel] exchenge
bas a right to levy en assesenent on its members for the
payment of ite cebts. (article 8206, Sec, 15, Re Co Se,
1985) Your letter indicates thet such a continzency hag
happened. This right of Southern Underwriters to levy ax
assessment on its mexbera d14 sot pase to United wtuployers,
because United Raployora iteelf contracted to pay off and
éischarge auch debtea. And the receiver for United Ine
ployers could acquire no right whieh the corporation iteelf
4i4 not :ossess, (See Texas Jurisprudence, Vol. 36, ye
186) Yurthernore, it {se eppereat thet Southern Underwriters
hes a cause of aetion against United Smployers for ite
failure to perfors itm contract to diséharge the cbliga-
tions of Southern Underwriters, This fe a cause of ection
and claim which could sot pass by the contract, but erises
out of it, and should be enforeed against the receiver of
United Bxployers,.

We are therefore of the opinion that the facts
showing insolvency of the Southern Underwriters should be
reported to this department for ault loeking to the appoint-
ment of a receiver for such exchange,

Youra very truly

ATTORNEY ONERAL CF TEXAS

FIRST assistawt (“SOY |
ATTORNEY GENERA, — Me Nadatee

APPRCVED 0

WRAtG

APPROVED

OPINION
COMMITTEE

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