- 

TEE ATJTORNEY GENERAL 

OF TEXAS 

H~Jx. ‘Ralph Brook 

Count* ~~ttortiw 

opinion .NS. :o&@o '.' 

.&I: UndW’the’Yaote submitted, lb 

Lubboeki,Coun3y the Southern, Lloyde Fire I!ialiratlb(l 

Lubbock, Texae ” Company oi San ~kitcnlo; ‘Texae; ;,,,ellglble to write fire 1nsuranoe”on”~ 

;,the Lubbock’ Independent Sohool DlaDear. Siri c;~L; ~. : ,,i, “1: ,:,::triot $uldinga? .‘, 

;~ ..:Y&‘lett~rir:.rof~ &it&r 21,, .,I942 ,,re&&&g the 

oplnlon '&:-thlrr~ department on the’ abode &aCed queetlon reads 

aa followrt::~~ :.~,,, 

-. i : ,. MI;,& ,b&n re~,‘&ated ;by A. 0. Ja&aon ‘&;I- 

‘ierr -Manager ,,of:the’: e ubbock,,Independent Sohokl ‘. 

Dlatriot)~Lubbock~:.Texaa to~~eeoiare’ en oplnlon aa 

to whether~sthe z Southern, i loyde Fire Inearanoe Company of,San ,Antonio, Texan, 1s ellglbla to write 

fire ;inaurBILoe!-on the $ubbook Independent, ,86hool 

Mrtriot +ulldlngr ‘the ~~LIlbbook ‘Independent ,-Sohool 

Dirtrlot - belug~un ‘&dependeiit :~ rohool d$rtrIat organleedX@deri:the lair of’thg.:ftate,. of’j:exae.: ’ 

,. .,‘L 

~3: <Under ;>&t>oie :ii&6be8 ,,,af :,Vimon t II’,, &&at~~ 

. 

~Cfrll.~~Statuter~.~-lt~~proolde~~;.that::a ‘mutuals,-oompany 

ma write lnrurance Ppon::raohilQorporatlanr ;‘a.s, the 

Lugbock Independent Sohool Dietrlot however In 

,thri reoent oare,:of Lewlr~~Vr~~ Inde eident,:Sohiol 

Dirtrlot ol:~Aurtln et al .,~61 S -hs 2nd ,450 thi 

,8 reme ~Uourt:held’that~;~r ‘artiOie~w:r.un~onrtl- 

.tu ‘4e ional:.by 3ea8on:~of Seotiti .52 .of.~.~Artiole 3 ~of. 

the Conatltutlon o? the~State,‘:oi Texar.:. 

“It la my underrtaudlng thati%he .8outhera 

Lloyd8 18 not a mutual compan 

i* 

In a letter rubmltted to%&.. Jaokron by the outhern’Lloyd8, they 

make thle~~rtatement t 

“*The pollay~ holderr,~ of auoh Lloyd8 are not 

rubjeot to an atmerrment. In no oaaa and under na 

oj,*aumePrtanore will a uoliay holdek nf LloOdr ever 

be eubjeot’to an aseeeement. The’.flrrrt, lart and 

oirly oeets to a polloy holder of Lloyd6 organleation whether It be 8outhern Lloyds or any other 

Lloydr, la the advance premium paid. 
Hon. Ralph Brock, page 2 (O-4880) 

“There are four (4) general types of lnsursnae oarrlers; the Stook Company the Lloyds, the 

M~t$~g~ompany and the Reolprooai or Inter-Insuranoe 

The first two of these oompanlee, the 

Stook Cotipany and the Lloyd8 are privately owned 

enterprises owned by their stockholders. The oommanly aocep c ed name for owners of the Stock gcpany 

1s Stook Holders, and Lloyds Underwriters. 

principal dlfferenoe between the two is in the name. 

They are both associations of individuals for the 

purpose of doing an insurance business. No policy 

holder of a stook company or a Lloyds is ever subjeot to an assessment. 

Wnder the other two classifications, the Mutual and the Reciprocal, there are no stoCkholders 

nor private owners. The entire assets belong to 

the policy holders. The policy holders own the 

c,ompany and whlle some states make .provlslons for 

the waiving of the assessment feature of these two 

types of pollcles, it remains a fundamental fact 

that the policy holder owns the company and whether or not he Is legally liable for all debts, It 

would seem reasonable that since the policy holders 

own the company, he should also owe the debts. 

“The Southern Lloyds Is a Texas institution, 

organized and operated under the Texas Insurance 

laws, which makes it different in operation form 

from the Lloyds of London. The fact Is that the 

Southern Lloyds has its stock, its surplus fund and 

its reserves and these three things are the protective features that are found in any good and rellable insurance organization. 

“The principal difference between the Southern 

Woyds and a stock company 1s the name- The Southern Lloyds could call Itself a stock company if it 

wished, but since a Lloyds Is generally known as a 

Lloyds and not a stock company, we do not call ourselves the Southern Lloyds Stock Insurance Company 

but simply the Southern Lloyds. I 

.-- ~.~ ,?* “1 give you the above quotations from a letter 

addressed to Mr. A. C. Jackson, Business Manager Lubbock Schools, Lubbock, Texas for the purpose to show 

you the status of the Southern Lloyd8 as to whether 

same IS a mutual or in fact a stock company. 
Hon. Ralph Brock, page 3 (O-48801 

"1 take the position that Inasmuch as the 

Southern Lloyds meet the requirements of a stock 

company that they are eligible to write such lnsurance upon the properties of the Lubbock Independent School District, however, I would appreciate It if you would furnish me wlth your oplnlon 

on such question, 

We have been Informed by a representative of the 

State Insurance Department that the Southern Lloyds Fire Insurance Company of San Antonio, Texas, Is not a mutual lnsurance company but a LIoyds Insurance company as Indicated 

by the name. 

The case of Lewis vs. Independent School District 

of Austin et al, I61 S.W.2nd 450, among otherthings holds 

that the independent School District of Austin Is not authorized to have the properties of the School District insured by 

a mutual company. As the Southern Lloyds Fire Insurance Company of San Antbnlo Is not a mutual insurance oompany but a 

Lloyds Insurance company the opinion of the Court in the above 

mentioned case does not prohibit Independent School Districts 

from insuring their properties with a Lloyds insurance company. 

We have made a careful search of the statutes and 

constitutional provisions of this State and f,all to find any 

statutory or constltutlonal provision prohibiting Independent 

School Districts from lnsurlng their properties with companies 

of the class and kind of company or companies as the Southern 

Lloyds Fire Insurance Company of San Antonio. Therefore It Is 

the oplnlon of this department that the Southern Lloyds *ire 

Insurance Company of San Antonio Is eligible to write fire lnsurance on the Lubbock Independent School District's buildings. 

Trusting that the foregoing fully answers your lnqulry, we are 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By /s/ Ardell Williams 

Ardell Williams, Assistant 

APPROVED OCT 'j, 1942 

/s/ Gerald C. Mann 

ATTORNEY GENERAL OF TEXAS 

APPROVED, (.Kl&IO~ANCM.'lTTER 

BYs 9 

AWrmprwb