Ikmorahle 0. P. Lockhart, Chairman 

Board of Insuranoe Uasmissionsrs 

Austin, Texas 

Dear Sir: Opinion No. 0-4289 

Rer May the Life Insuranae Cumnissioner and Chairman lawfullymake 

trips to foreign states to axamine 

into the affairs of oertain foreign 

life insurance canpsniss, etc., rather 

than send a designated actuary, exsminsr or other person, and rslated 

questions? 

Your letter dated Marsh 19, 1942, requesting an opinion of 

this deparbaent,reads as follows: 

"A partioular oooasion has arise in which the Life 

Insuranoe Conmissioner (or officio Chairman of the Board 

of Insuranoe Commissioners) finds it more expedient to 

go in person to foreign states for the purpose of sxsmining into the affairs of certain foreign life insuranae 

campanise, having oertifioates of authority from this 

Board ix conduot lifd'insuranoe business in Texas, than 

to designate the Aotuary, or any examiner or other person 

to mske.suoh a trip, examinations and investigations 

for him. 

"In oonnedionwith this and a9y similar occasional 

situation whioh may arise while the laws remain as they 

are, ws desire your opinion upon the following points8 

sl. Uay the Life Insurance Ccmmissioner a.& Chairman 

lawfully make.suoh.trips, examinations and investigatf,ons in person, rather than through a designated 

Actuary, examiner or other person? 

"2. In ths event of an affirmative answsr to Number 1, 

must he do so only in his oapaoity as Life Insurance 

Camrmissloner and Chairman of the Board or may he, for 

the duration of such trip, as ars our sxaminsrs, rsmwe 

himself'frcsa the payroll of the Cmsnission as Life 

Iasuranos Ccmusissioner and Chairman (thus allowing the 

Chief Clerk to ssrvs as Acting Life Insuranus Ccnmaissionsr and Chairman during his absence) and make the 

trip, examination and investigation in the capacity 

of examiner, designated for suoh purpose by himself 

as Chairman of the Board? 
Hon. 0. P. Lockhart, page 2 (O-4289) 

“3. In making such trip either in his capacity as 

Life Insurance Ccsmuissioner and Chainsan or in a 

capacity as examiner designated by himself for such 

purpose, would he necessarily be limited to his 

statutory compensation of $8000 per year as Ccmmissioner and Chairmpn (#20 per diem onthe basis of 

300 working days per year, or $l6.43 per diem on the 

basis of 565 days per year), plus the $4 per day maxisssn travel expense allowed by the present annual 

departmental approprialion bill (88 423, Act 1941, 

47th Leg., Reg. Sess.), or would it be permissible 

for him under the retaliatory provisions of the statutes 

hereinafter oited to charge the Examination Fund, to be 

reimbursed by the examined foreign companies, with the 

larger per diem compensationand travel expense allowance permissible under such retaliatory provisions and 

required bythe laws of the home states of such exemined foreign companies to be charged for examinations of 

Texas companies by examiners farm their states? 

II " . . . 

Article 4690, Vernon's Annotated Revised Statutes, reads as 

followsr 

"The Chairman of the Board of Insurance Covmissionem s.hs.11, once in each tvo years or oftener if he detrms 

neoessary, in person or by'one or more examtiers commissioned by him in writin!, visit each oanpany organiced 

under the lawa of this tate and examine its finanoial 

condition and its ability to meet its liabilities, as well 

its oanplianoe with the laws of Texas affecting the ccnduct of its businesst and he may similarly in person or 

by one or more commissioned examiners, visit and examine, 

either alone or jointly with the representatives of the 

insurance supervising departments of other states, each 

insurance company not organized under the laws ofthis 

State but authorized to conduct business in this &ate." 

Article 4691 of the Revised Statutes reads as follows: 

*The Board of Insursnce Commissioners for the purpose of examination authorized by law, has power either 

inprson or by cplc or more examiners by him oommissioned 

is writing; . . . 

"(3) To visit at its prinoipal office, wherever situated, eny insurance company doing business in this State 
. . - 

Hon. 0. P. Lookhart, Page S (O-4289) 

for the purpose of investigating its affairs and 

aonditions, . . . .~. 

"The reasonable expenses of all such examinations.shall bs plid by the company examined." 

In our opinion, question nmber 1 should bc answered in the 

affirmative. The statutes above quoted, wc think, authorize the Chaiwan 

of the Board of Insurance Ccanmissioners to make the examinations of oompanies writing insurance, either in person or by his duly appointed emaminers, regardless of whethsr the company is a domestic or a foreign 

corporation. 

Answering question number 2, the Chairman of the Board of 

Insurance Connnissioners, if he sakes the examination, does so as MS.. 

sioner, and not as an appointed examiner. 

Article 4690a .# .of the Revised Statutes,.reads: 

I‘ . . . In case of an examination of the company 

snot organized under the laws'of Texas, whether such 

examination is made by the Te5za.s authorities alone, 

or jointly tith the insurenoe supervisory authorities 

~of-,another~ state or states,-the expenses of such emamination due tc Texas*.participation therein shall be 

borne by-the compaqy'under examination. Payment of 

such oosts shall bs made by the oompany upon presentation of itemiaed writtenstatement bythe Chairman, and 

sha.ll,oonsist of the examiner's rcrmuneration and expense, 

and the other expenses of the:Department of Insurance 

properly allooable to the examination. Payment shall 

be made dire&ly to the Chairman, and all,money collected 

by assessment of foreign oompanies,for the cost of exsmination shall. be deposited inthe state treasury bythe 

Chairman to the credit of the insurance examination fund 

out of which shall be paid, by a warrant of the state 

Comptroller -of Pubiic Aaioounts on voucher of the Chairman 

of.the Board of Insuranoe Cozmaissioners, the examiner's 

rcmunerationand~expenses in the amounts determined by 

the methods hereinafter provided,rPlen verified by their 

affidavit and approved by-the Chairman; . .~. exeminer~s 

remuneration and expenses shall be the'same as that which 

wouldbe paid by the haae~state of the company under examination to ,prsons conducting the examination of a 

Texas company admitted to do business in that state." 

Article 4690b provides: 

“The Chairman~of the Board oft Inshrsnce armmissioners,shsll appoint suoh number of examiners'. . . as he may 

~Jeemnewssary forthe purpose of making on behalf of the 
Hon. 0. Fe Lookhart, Page 4 (O-4289) 

state and of the Eoard of Insuranoe Ccamissioaers all 

suoh exeminations of Insurance companies, at the expense of such companies or corporations, as are required to be made or provided for by law." 

The Appropriation Bill passed in 1941, pages 1184-1188 of the 

Acts of the 47th Legislature, appropriated $6,CCO.CC our of the General 

hevenue &nd to pay the salary of the Life Ins-ce 'hmissioner and Chair- 

-n of the Board. It also appropriated certain fixed amounts fir the exminers that may be appointed by the aairman of the Board Of ~surenoe Canmissioners. 

Under the statutes hereinbefore quoted, a life insurance ocmppany is required'to pay the expenses of the examinationwhen aada. It includes the'examiner's remneration, together with all of.the expenses inoident to said particular examination. If the examination is made by the 

Qlai+xan of the Board of Cxmsissioners himself, there would not be any 

examiner's remunerationto be charged, since the Chairman of the Board 

would be acting under the powers given him .by the Legislature tomake the 

examination in person. The only expense'that could be charged against the 

ompauy examined by him would be his expenses, together with any other 

expenses Of the k+I%aent Of Insurance properly allocable to suoh ems&nation. 

end 

The Chairman of the Board of Insurance Cmmissioners is limited to, 

the fl 

Mot drawmore thanthe $6,000.00 per annm salary appropriated by 

gislature. 

By question nuder 3 you ask what expenses the Chairman of 

the Board of Life fnsuranoe Commissioners could charge if he &es 5.u fact. 

exmine a foreign corporation. 

Under the provisions of &tioles 4690a and 4891, above quoted, 

the actual expenses incurred in the examination of a foreign i&umnoe c~S 

pany is to be PaId by the oonpany examined. As ws interpret said Articles, 

it Is imaterial~whether the examination is made 9 the Chairman of the 

.lkard of Insur&oe Ccmaissioners, or made by one of theeceminers appointed 

by him. The actual and neoessary expenses incurred are to be paid bythe 

company examined, and when paid, same are to be deposited in the State 

treasury, and then the actual expenses inourred by the party or parties 

who in faot made the examination are to be paid toraid party or parties 

on warrants drawn on the &ate Treasurer. 

wuoted protion of &ticle 4690a above, 

The expression used in the 

that the cost of examination shall 

consist of “the examiner’s remuneration and expenses,and the other expsnsea of the Dsparbnent" means the expenses of the party who makes the examination, and if the Olaiman of the Board makes the examination, his 

actual expeiises should be paid by the examined company. 8aid Article 4690a 

provides that, %xaminers~ remuneration and (all) expenses shall be the 

ssme as that which would be paid by the home state of the company under 

examination to persons conducting the exsminations by the Texas ccmpany.a 

This statute-&~~at theexpense paid is the same as would be required under examination to persons conducting the examination. If the - 
_. - 

Hon. 0. P. lockhart, page 5(0-4289) 

Commissioner himself examines a domestio company, the company would be 

required to pay his actual expenses. In other words, it is not the expenses of the examiners as distinguished fras the Ccaucissioner himself 

when he makes the examination, tit it refers to and is intended to coverthe expenses of whoever makes the examination, and whatever amount 

of actual expense is incurred bythe party making the examination. All 

expense money, under the law, when collected, is paid to the Chairman 

of the Ebsrd of Insurance Commissioners, and he is required to deposit 

it in the State treasury. The actual expense of the party who made the 

examination is then paid to him "by warrant of the State Comptroller of 

Public Acoounts on voucher ofthe aairman of the Board of Insurance 

&mmissioners." If the Commissioner himself made the examination, he 

would end will-be entitled to the actual expenses he incurred end oollleoted frosthe company he examined. Under the law, when he collects this 

expense money, he should deposit the same in the State treasury, and 

then issue to himself a voucher for his said expenses, and obtain a 

warrant from the Comptroller against said fund. By this method the Stats 

can keep a check on the amount collected by the Cammissioner as epenses, 

whether it be for examining a domestio or a foreign company. 

Very truly yours 

ATTOBXEY GENERAL OF TEXAS 

% Gee. --. _ IL Barous 

Gee. PT. Birous 

Assistant 

APTROVED DJL 28, '1942 

/s/Gerald C. Mann 

ATTORSSYGWERALOFTEXAS 

This opiaion considered and approved in limited conference.