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### 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’: eubbock,,Independent Sohokl ‘

. Dlatriot)~Lubbock~:.Texaa to~~eeoiare’ en oplnlon aa to whether~sthe zSouthern, i loyde Fire Inearanoe Company of,San,Antonio, Texan, 1s ellglblato 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 tII’,, &&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 ional:.by 3ea8on:~of Seotiti .52 .of.~.~Artiole 3 ~of. ‘4e the Conatltutlon o? the~State,‘:oi Texar.:.

“It la my underrtaudlng thati%he .8outhera Lloyd8 18 not a mutual compani* In a letter rub

### mltted to%&.. Jaokron by the outhern’Lloyd8, they make thle~~rtatement t



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

### firsttwo of these oompanlee, the Stook 

### Cotipany

and the Lloyd8 are privately owned enterprises owned by their stockholders. The oommanly aocep ced 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,ompanyand 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 Companyof 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.

Wehave 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 Companyof San Antonio. Therefore It Is the oplnlon of this department that the Southern Lloyds *ire Insurance Companyof 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

OFTEXAS By /s/ Ardell Williams Ardell Williams, Assistant APPROVED

OCT'j, 1942 /s/ Gerald C. Mann ATTORNEY

GENERAL

OFTEXAS APPROVED,

(.Kl&IO~ANCM.'lTTER BYs 9 AWrmprwb