   OFFICE     OF     THE   ATTORNEY     GENERAL     OF   TEXAS
                               AUSTIN




                                                   S&rah 29, 1939


ITOn. Ekrt   Ford,    kdminiatrator
Liguor Ccntrcl RORl-d
6ustin, Texas




                                                    Liquor ooatrd1
                                                  uly 1lmltat.tion
                                                                 en
                                                   fl8 02 Taxa@ a8
                                                    bond8 thay sotild
                                                   Liqlioraontror

                                                   on the abom atat-
                                                  8 Bapartmant.
                                        loi theTexasLIquQr

                                           thlsAet&all       beg

                    1 not oansal amy surety bond
                    etp uompaay shall bats paid and
                    iull sll‘@ ita liabllltyupon
                   the St&#k%s the dats of #aId
                  . Thawheldem of all pslnita. QX-
                 8 and wtab and bear retailers,aball
     be qaqufrad to make bonds in aams of not le6a
     than One Tbouaand Dollars ($1,000) and not (IX-
     oeedfng Twenty-Five  Thousend Dollars (#25,000).

          ~The Board 3.n1t.a~
                            dieorationmay fir the
     amoant of bond wbiah shall bo mqtilre&for #oh
     olasa of psrmitte6a. All bond8 requlnd   of per-
     mittese shall.ba payable to the Stata of Tax48
son.   %I%   Ford , i!aroh29, 1939,         ape 2



       conditioned that so lone. GS the arpllnant
       holds such pemlt unrevoked na wJ.11 r,ot vio-
       late any of the laws of t!ils State ralatlve to
       the traffl.o in, transportation, sale, or ds-
       livery of liquor or any of the valid rules,
       or regulations of the i5oorG, and ir.the ease
       of suah pemittess as are regtiired to account
       for taxes and fees t!:et suoh pemittees will
       account for any pay all permit fess and tax48
       14vl4d by thla Aat. All bonds raqulred or
       pemitteee shall be payable in Travla Coanty,
       Texas. In all ln4taho48 where other perml~~
       4r4 raquirad, lnoidantalto the operation ot
       a buslnear for whiah 4 basla pennit is pro-
       oured, tha Board may in its disore~ion aoaept
       on4 bond to mpport all suoh penalts~and in
       ruob amounts a8 it may requ%re..~
         Art1014 $ClS, Revlsad Civil Ststutas, prorids
among other thin@:
            "(0) Thinkinda of lneuranae'tobs ar-
       faoted, whioh kinds oi fnsuranoemay be as
       r0ii0ns        :

              1. Irka lnuuranoe,rhioh tam shell be
       aonstmad to Inelude tornado, hall, oMtp and
       flaatsr  luauranoe.
            2. Autonoblla immranoe, whioh term @hall
       be oonatruad to include Sire, thsft, tram-.
       portatlen property damaga, oollision llab%llty
       and tornado lnsuranoa.
                 9. Llablllty lnsuranoe.
                 4. Warlns insuranoe.
                 5. Aocidsnt and health insuranae.
                 6; Burglary and plate glass insuranea,
                 I.       Fidelity and surety bonda lnsuranoe,

            8. Any other kinds of Inemanoe not
       above speoltled, tha making or whioh is not
       othemlse utilawful -in this State, sxospt life
       lnsnranae.*
Ron. Bert Ford, Zaroh 29, 1939, Page 3


           Article   5017a, Revlscd Civil Statutes,   reads
aa   follone:
           "The underwi-iters at a Lloyd's shall not
      aswme nor write lnsuranoe obligations in
      Texaa nor for citizens of Texas, nor covering
      property locited in Texas which prodace a net
      premiia income ii: exoess of ten times the net assets
      or such underwriters, and if at any time ths
      liabilitiesaesumad upon auoh insursnoe   shall
      produoe a net prealum   inoon greatar than ten
      times auah net asaeta than no further lnmuranoo
      obligationahall be assamad nntll the net aaa4ta
      have be4n inoreand so 4s to admit of addltlonal
      inauranoa4bllg&lona uhlah will p@3gos a prs-
      miuu inoome not gmater than tan tl&& suoh net
      asset; provided that whan th4 net azaeta at a
      Lloydta.khallequal the am of mqnay rhioh dll
      be raqulred of a atook imauranae aompany doing
      the 44~4 oharabtsrs~ofbualneas In Texas,.then
      his limihtiona up4n tha rolnma of bnslnaas to
      ba wrlttsn.sh4l.l  notrpply rtwther; provl.dadttu-
      thar that if in the Judgment and dlsaret~onof
      the Board of InsuranoeCommissionerssuoh under-
      writers (at) a Lloyd.8 ah411 have atfeoted 'r4ln-
      suranoa, or other a4ntraots,wlth responalble
      and solvent lnsursnoeoarrlars reduolng the nat
      linaa at risk oarried   by auoh underwritersat e
      Lloyd's 80 that their aperations4r4 safe and
      their solvenoy not in danger, than suoh Board
      aey ranaw or extand the lioenses of suoh undar-
      writers, lrrsspeotiveof this limitation.4
          Artiola 5017e, aupra, llmlts tha amount of In-
aur4no4 obligationsthat an undaruriterof a Lloyd*%
ah411 aosuma-a'right in T4xas
                            -_ for 4itlzens
                                        ~_. of'T4xaa
or oorerlng3roparty   looated in Tares whloh produo a
nat pramium 3.noonrsin ex4asa of tan tLmes ths net aa-
sets or suoh undsrwritara. This statute, by Its Ian-
guag4 or terms, does not'llmlt tha amount of bondo that
such undsrwritersmsy write nor does it imply euoh ll-
lactationsby its provisions. Horever, under this 8ta-
tuta suah undsrwrltarshave th4 right to reinsure with
responsibl4and aolvant insuranoe oarrlere, rsduolng
the net lines at risk oarrl4d by suoh undanrrltera
fion. ?krt Ford, Lfarah 29, 19S9, Page 4



80 that their operetiona are sere end their solvency
not in danger; provided, that 5f in the judgment and
disaretlonof the Roard of InsuranoeComlssi~~nerssuah
reinsurence  18 neoessery. ,A8 thSe applies to iRSUP
enoe obli@.lms    WC csnnot oonatrue this statute as
applying to bonds that such underwriters may write
wiiioh are required by Section 16, Article 1 ci the
Texas Liquor Contr4 Aot.

          You are sespeatfully advised thtit it is the
opinion of this Departant that oompenlea organized
mdar Chapter 19 of the ItuuranaeLaw8 of Texna are
qunlified to alto bond8 nquired under the Liquor
Control Aot and that there 1s no l%mltatlan.onthe
.-LawyersLloyd8 of Toxw" as to the amount of bonds
 they oan write for the Texas Liquor Control Board.
          Trwtiagthat    the foregoing anewers your in-
quiry, we remala
                                vary truly your6
                            ATTOBBBY -      OF =X-M
