Court Opinion

ID: 4146185
Source: CourtListenerOpinion
Date Created: 2017-02-18 04:05:20.745465+00
Date Added: 2024-06-11T14:37:41.081408
License: Public Domain

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               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&ltlcmal
    $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&nototierwIae 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