City of Tyler v. Texas Employers' Ins. Ass'n
In City of Tyler v. Texas Employers' Ins. Ass'n, 288 S.W. 409 (Tex. Comm'n App. 1926, judgm't adopted), the court considered whether a statute that authorized public employers to subscribe to the Texas Employers' Insurance Association was constitutional. 288 S.W. at 409.
The court concluded that the TEIA was a mutual assessable insurance program, because every TEIA subscriber had to pay a proportionate part of any assessment the TEIA levied to finance all the subscribers' losses and expenses. City of Tyler, 288 S.W. at 411-12.
The court held that this scheme was unconstitutional as applied to political subdivisions because their obligation to pay assessments to cover the TEIA's losses required them to "lend their credit" within section 52(a)'s meaning. City of Tyler, 288 S.W. at 412.
Moreover, the court held that the TEIA unconstitutionally required political subdivisions to become "stockholders in a corporation, association, or company," which section 52(a) also prohibits. City of Tyler, 288 S.W. at 412.