Texas Attorney General Opinion: M-62 Page: 5 of 6
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Hon. Robert 0. Smith, page 5 (M1-62)
of its stockholders, who need not be policyholders. 33 Tex.Jur.
11, Insurance, Secs. 555 et seq. Its policies are issued solely
upon the credit of its capital stock to persons who may be entire
strangers to the corporation, who acquire by reason of their poli-
cies no right of membership and no right to participate in its
profits, and who subject themselves to no liability by reason
of its losses. In all these respects it differs materially
from the latter, which has no stock or stockholders. Fuller v.
Lockhart, 209 N.C. 61, 182 S.E. 733 (1935). The latter company
is one in which the members are both the insurers and the insured,
sometimes through a fund made up of cash premiums or premium notes,
and sometimes by assessment laid on all members. 33 Tex.Jur.2d,
Sections 578 et seq. Hutchins Mtual I.s, Co. v, Haen, 105
F.2d 53.
Therefore, in answer to your question, it is the
opinion of this office that in accepting bids for insurance
on county buildings and contents, the commissioners court can
purchase such insurance from any insurance company licensed to
write this type of insurance in the State of Texas, including
the "Lloyd Type" or "Stock Type" company, provided such purchase
would not involve a lending of credit or granting of public
money or taking membership in or becoming a stockholder in such
corporation, association or company in direct violation of the
provisions of the Texas Constitution.
S U M !A R Y
In accepting bids for insurance on county
buildings and contents, the commissioners court
can purchase such insurance from any insurance
company licensed to write this type of insurance
in the State of Texas provided such purchase
would not involve a lending of credit or grant-
ing of public money or taking membership in or
becoming a stockholder in such corporation,
association or company in direct violation of
the provisions of the Texas Constitution.
urs very truly,
C WFORD C. MARTIN
torney General of Texas
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Texas. Attorney-General's Office. Texas Attorney General Opinion: M-62, text, April 20, 1967; (https://texashistory.unt.edu/ark:/67531/metapth269281/m1/5/: accessed April 28, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu; crediting UNT Libraries Government Documents Department.