844
m’.
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OFFICE OF THE ATTORNEY GENERAL OF TEXAS
AUSTIN /
Hon. Walter C. Woodward
Board or xnsulanca comissioners
Austin, Texas
Dear Sir:
opinion No.
Be: 'Isthe rate
this basis?
on the above stated
tes or Examiner8 employed by
In submittingour payroll to the
we have use% the highest rate of
1 Examiners In Hew York, ror the
Hearer Sanderford, Senior Bamiaer
o is assigned to the position, ia
dest Faxminers in point or exper-
While the Texas.law deals-
nates 0nly~t~0 ci~3ses 0r Examlners, Assistant
and Senior, the appropriatioabill provides for
three classes so far as the rate 0r pay is eon-
warned. These three classes are: Assistant
Examiners, a&lary not to exceed (t&,520.00 per
Hon. Waltsr C. Woodward,Page 8
ear; Senior ?Zxauiiners, 8alary not to smeed
BS,ISO.OO per ear; and ,SeniorBxawiners), salary
not to exaeea L ,200.OO per year, There are
only tour Ensminers in the last rate alass of
$4,SO0600 per year, and Wr. Sandsriord is one
or these examiners. In other words, he is paid
the hi-best rate that Is in errmat in Texas.
VI11 you'pleaseadvise this otiioe and the
Comptroller% offlae if the rate of pay appl%ed
to Mr. 8agderrordis aorreut under the provisi~nrr
of t3s.n a$3ill Bo. 397, and the letter irow the
Superifi
3 ehdent of'Insursnoe or New York, and if
the Comptroller1s authorized to issue warrant
on this basi8.v
We quote rr0i8a copy ei a Letter rmm Hon. Louis
H. Pink, SuperintendentOr~Iusurame of Wew York whioh was
enclosed with your inquiry, as lo&lows:.
*In the Bepartwentthem are fourgrades
or examiners, ely, Junlor,,Assistant,8enior
-th e rirst three groups do sub-
and Prlnclpal.
stantiallyall of the actual exawinatlonwork.
The latter or uprlnolpalngroup 1s composed 0r
chiefs or the various bureaus, namely, Chief
or the'Plre& Warlne Bureau; Chief or the zire
Bureau, Chief of the MlsosllaneousBureau, sto.
Eaoh of the groups has a wlnlwuw and waxilatnn
salary. Upon entrance to a grade an examiner
is paid the minimum salary thereof and then by
the process of yearly lnarementareaches the
maximum where he remains until his prmotion to
the next higher grade. Appointments to the
Junior grade are wade as a result of open compe-
titive examinationswhereas promotions to grades
higher than Juulcrresultfrom promotion examlna-
tlons aonflned to eligible men nithln the dspart-
ment. The minimum and mariwrm salaries for eaoh
g:raderOu0w:
"Grade
Junior
Assistant
Senior
Prlnclipal
xon.tmltmr c.waodward, Page B
*With reference to the speclrla lnquiiy
you sake, our charges to the aompanlee exawin-
ed so far as safariem are concerned, is on the
basis or 1/2SOth of~the exsqlnnsr*sannual saIaxy
times the nus&er or daya required ror the emm-
inati~n.
we also charge for traveling and eubsia-
tenoe expenseswhich are I&sited by rules of the
State Comptroller,copy or whloh is enclosed.
To these oharges is added 20$ of.the amount charg-
ed ror the salaries of exawinere,which added
per cent is for the analytical and supervisory
functions of the chief or *principal"examiner.w
Senate Bill No. 391, A.&clof the Regular Seasion~
of the46th Legislature,amending Articles 4690a and 409Ob,
revised civil Statutes, reads ae follows:
T3eoti6n 5. The expenses or all examina-
tions 0r domedi insuranoe~ooqp~ibe made on
behalf ot the State of Texas by the Chalrmn
of the Board of InsuranceComaisslonersor under
his authority shsll be paid by the corporations
examined la such amount as the Chairman of the
Board 0r InsuranceCommleeioneraShall certify
to be Just and reasonable.
wAssessmentsfor the expenses of-suuh domes-
tic examination,which shall be sufficientto
meet alf the expenses and disbursementsnecessary
to comply with the provleioneof the laws or Texas
relotinc:to thy examinationor insurance comj%niee
and to aomply veiththe provisions of this Act,
shall be made by the Chairman or the Board of
Insurance@omnissionersupon the corporationsor
associationsto be examinea takin into considera-
tion annual prmnlum receipts, and7or admitted
assets and/or insurance in force; provided suah
assessmentsshall be made and collected only at
the time such examinationsare wade.
*'$.ll
sums collectedby the Chairman of the
Board of Insurance Cowmlssioners,or under his
authority, on account or the cost of examinations
Eon. Walter C. Woodward, Page 4
.aaeess%das hereinaboveprovided ror s&ll
,bepaid into the State Treasury to the credit
of the InsuranceExaminationFundg and the
salaries and expenses of the actuary of the
Board or Insurence Oonmisaionersand or,the
examinersand assistants,and all other ex-
penses or such examlnatlons,'shall be paid
upon the certlficcteof the chairman or the
Board of InsuranceCommlaslonereby warrant
of the Comptrollerdrawn upon auuh fund In
the State masury.
"It atany time it shall appear that
addition pro-rata assessmentsare necessary
to coverall of the expense and ~ia'bumawents
required'bylaw aa neoeseary t0:oowpJ.y with
this Act, the same shall be made, and any sur-
plus arising from any and all such assessments,
over and above such expemes and disbursements,
shall be applied *n reduotioh of subsequent
assessments In the proportion WWX388d so
that there shall.be so assessed and collected
the funds neoessary to meet suoh expenses and
disbursementsana no more.
*In case or en exsminationor a ocmpany
not organized under the laws of Texas, whether
such exmmlnationIs made by the Texas authori-
ties alone, or jointlywith the Insurance super-
visory authoritiesof another state or states,
the expenses of suah examinationdue to Texas*
participationtherein, shall be borne by the
company under examination. Payment or such
cost shall be made by the company upon presenta-
tion of itemizeawritten statement by the Chalr-
man, and shall consist of the examlnersVremun-
eration ana expenses, and the other expenses
of the Departmentof Insurance properly allocable
to the examination; Payment shall be made dlreat-
ly to the Chairman,ana all money collected by
assessmentson fore@ companies rOT the cost
of examinationshall be deposited ln the Stats
Treasury by the Chairman to the credit of the
848
1’
Hon. Walter C. Woodward, Page 5
InsuranoeExamination Fund out of whloh shall
be p@id, by warrant of the State Captroller
of Publio Aooounts on vouoher of the Cbaixman
of the Board of Insuranoe Commlsslonera,the
examhers' rcrmuneratlon and expenses in the
amounts determinedby the method hereinafter
provided,when verified by their affidavit end
approved by the ChaIrman; end mid money is
hereby appropriatedfor that purpose, the bal-
anoe, If any, to remain in the InsuranoeXx-
amination Fund in the State Treasury subfect
to be expended for the purposes aa are other
funds placed therein. Examiners' remuneration
and expenses shall be the ssme as that which'
would be paid by the home state of a company
uuder examinationto persons aonduotingthe
examinationof a Texas company admitted to do
business in'that State. If there be no reoog-
nized charge ror suoh servioe, the Chairman
shall fix the remuneretion.andexpense allew-
anoe of the examiners at suoh reasonablefigure
as he may determlne.
*Seoticn 2.
93eation 3aa: The Chairman of the Board
of Insuranoe Commissionersshall appoint suoh
number of exsminers, one of whom shall be the
chief examiner,and suoh number of assistant8
as he may iieemneces::aryfor the purpose of
making on behalf of the State of Texas and of
the Board of Insurance Commissionersall suah
examinationsof insurancecompanies, at the
expense of suoh companies or oorporatlons,as
are required to be made or provided for by
law; and, after this Act shall take effect he
shall also appoint an aatuary to the Board of
.InsuranoeCommissionersto advise the Board in
oonneatlonwith the performance of its duties
and for aid and adviae and aounsel in oonneo-
tion with all such examinationsrequired by l&w.
Hon. Walter C. Woodward, Page t3
Suah examinersand assistants shall aa direot-
6d by the Chainnan or the Board of inamanoo
Commissioners,perform all the duties relative
to all examinationsprovided by law.to be made
by the Board of InsuranoeCommisslonereof the
State of Texas, and it is the purpose of this
Act to provide Zor the examinationhereunder
by the Chairman of the Ward of Inouranoe Dar-
missioners 0r all corporQtions,rirms or pssc
sons engaged in the business of writInS 3.nsur-
ante of any kind in this State whether now sub-
jeot to the supervisionof the Insurance Depart-
ment or not.
"All suoh examiners and assistantsand sueb
actuary shall hold office subject to the will
of the Chalrm$n of the Soard of Insuranoe Com-
missioners anclthe number of such examinerssnd
assistantsmay be increased or decreasedfrom
time to time to suit the needs of the examining
work. The actuary and all such examinersand
.assistantsshall be paid out of the Insurance
ExaminationFund, such salaries as shall be fix-
ed from time to time by the LeSLslature,and
their neoessarytraveling expenses shall be
@&put of said. fund upon sworn, itemized
<&%unts thereof to be renderedmonthly and ap-
proved by the ClUirplanof the Board of Insurance
Commissionersbeforapayment.
Vhere the Chairman of the Board shall deem
it advisable he may commission the actuary of
the %arc?, the chief examiner, or any other ex-
miner or employee of the Department,or any
other person, to conduct or assist in theex-
amination of any company not organizedunder the
laws of Texas and allow them oozpensationas
herein provided, except that they~~maynot be
cthexwise compensatedduringthe time they are
assiqned to such foreign company examinations.
Other than as thus provided, neither the actuary
of the Poard of Insurance Commissionersnor any
examiner or asslstsnt shall continue to serve
Hon. l!:alter
C. Woodward, Page 7
as such if, while holding suoh position,he
shall directly or lndireotlyaccept from any
insuranceoompany ady qployment or pay or
compensationor gratuity on account or any
servioe rendered or to be rendered or any
account whatsoever."
Senate Bill No. 397, supra, provides tlmt ex-
aminers representingthe state of Texas in examination
of companies outside of tho state of Texas shall reoeive
remunerationand expenses the same as shall be Bald by
the home state of a oompany under examinationto persons
conducting the examination of a Texas company admitted
to do business in that state. However, if there be no
recognized charge for such service, the Chainnan shall
fix the remunerationend expense allamnce of the exam&&-
ers at such reasonablefigure as he may determine.
Aocording to the inrormtion contalnadj.nthe
letter of the Hon. Iouis 11.?ink, Superintendentof Insur-
alyle,above quoted, aharges made to the aompany exarnlned
so far as salaries are concerned, are on the basis of
l/giSt3th
of tho examiner'sannual salary times the narnbar
of days required for the examination,plustraveling and
subsistenceexpenses which are limited by the rule8 of
the State Comptroller,plus twenty per cent of the roes
charged for,the salaries of examiners,which added per
cent is for&e analyticaland supervisoryrunctiom of
the chief OF princigpa examiner. Under this.formula
char es made to comphnics examined should be on the basis
of 17280 of the examiner*8 annual salary times the number
of days req,uiredfor the examinationplus travelingand
subsistenceexpenses plus twenty per cent of these Charges.
In submittingyour payroll to the Comptroller,the salary
of $4,200.00 per year should be used and not the salary
of the senior examiner of New York.
You are respeotfullyadvised that it is the
opinion of this department that the rate of pay applied
to Kr. Sanderford is not 'correctunder the provision of
Senate Bill No. 397 and the letter from the Superintendent
of Insurance of New York and that the Comptrolleris not
warrant8 onthis basis. You are further
authorized to @s.sue,
-:
8!5. :
5dd
Hon. Walter C. Woodward, Page8
advised that It Is our opinion that the proper rate
of pay to be applied under the provision of %mata
Bill .No.397 by the letter or the Superintendentof
Inswanae of IlawYork should be on the basis of l/?BO
of the examlner*s,annualsalary which is $4,200.00
per year tlmes the number of days required for the
sxslninatlonplus traveling and suhslstenaeexpenses
plus tnanty par cent ot the amount charged for the
salary of examiner.
*ustInS thet the toreiqaing
answers your in-.
qutrr, we remain
Yours very truly
A~~~ G%ZSO?ALOF TliXAh
AW:AW