THEATITORNEY GENERAL 

OFTEXAS 

WILL WILSON 

AlTGRNEYGENERAL June 18, 1957 

State Board of Insurance 

Aurtin, toxar 

Opinion No. NW-166 r 

Ra: Certain question8 concrraing 

the Commfasionrr of Inauranci 

na provided for in 8moto bill 

Gentleach? 222. 

You have requested the opinion of this office aa to 

the rifrct of Ssnots Bill 222? which is an Act aoeading the 

Toxar Inrurahcr Code lap, creating a State Board of Imsuraace 

and the sew official.posftlon OS Comxlssionsr of Insurance, 

rhioh law becam effective June 12, 1957. Your request is in 

port a8 follows: 

“Senate Bill 222, as parsed by the 59th Legirlaturo~ oi thr Stab of Texas and which will become effr’ctive today, June 12, 1957, rovides for 

a ‘State Board of Insurance end for a E orPmissibner 

of Insurance * Article 1.09 of the Taras Imsurance 

Code i as axended by 8enate Bill 222, re 

! 

uires that 

the State Board oi Insurance appoint a omissioner 

of Ihsurance who shall be the chlrf exectit?rs axid 

administratlve officer of the Boaxd, and who shall 

be charged with the primary responsibility of administering, enforcing, and carryiag out tbo 9rovisions of the Insurance Code. Beaatr Bill 222 provides further that the Couirrioaer rhall hold hi8 

position at the pleasure of the Board and may be 

discharged at any time. 

Vonate Bill 222 does not appropriatr any 

funds to pay the ralary or compensatioa for such 

Cou~~ir~ionrr of Insurahce 0 The A99ropriation Bill 

passed by the 55th Legislature provides for the 

salary,or a Commfrsfonor ot Insurance9 but this Act 

does not become effective until Scpttmber i, 1957. 

The-Appropriation Bill now in effect does not have 

any appropriation for such Commisslonrr of Insurance, but doe’s 9rovidr a lump sum appropriation for 

certain salaries. This ,appropriation in the present Bill has a s,uificient bal,ancs to yay s Commfssfoner of Insurance at a mo~i.hly rate of $20,000.00 

per year for the balance of this biennfum.~ 
: 

Stats Board of Insurance, page 2 OIW-166) 

“From a reading of Senate Bill 222, it is 

QParent that certain specific duties, responsibilities and authorities are placed upon the 

Commissioner of Insurance and upon the State 

Board of Insurance, with a definite line of 

thority and responsibility drawn between the 

suCommissioner and the Board. In visw of all these 

facts we m39SCtfUllY ask your opinion on tha following questionst 

“1. Can the insurance laws of this 8tate be administered by this Board without a Commissioner 

of Insurance in view of the provisions of Senate 

Bi~ll 2229 

“2. Is this Board authorized to pay a Commlssioner of Insurance out of the lump sum appropriation, for salaries in the current Appropriation 

Bill? 

“3. May a pre88nt employee of this Board be appointed and act as Commissioner of Insurance under 

the provisions of geenate Bill 222 and draw a salary from one of ttre appropriated items such as 

actuary or chief clerk in the present 4pprogriation 

Bill? 

“4. May the present Board appoint aa acting Commissioner of Insurance, so that the ‘new State Board 

of Insurance that is to be appointed by the Governor may have the right and duty to appoint a Commissioner of Insurance? If your an8wer ir ‘yes, may 

this acting Coami88iOaSr oi Insurance receive any 

compensation or salary for his sertices from the 

Stab of Texas? 

85. If the present Board cennot appoint an acting 

Commissioner of Insurance and must appoint a Commissioner of Insurance to carry out the funotions 

designated to him under Senate Bill 222, can the 

new Board to be appointed by the Governor remove him 

without cause and if not, what will be the term of 

his office? This westion is asked in view of the 

provisions of krticle XQX, Sections 38 and 30, and 

because Senate Bill 222 requires the Commissioner OI 

;;s;L$;y”to be confirmed by the Senate of the State 
State Board of Insurance, page 3 (W-166) 

The five questions propounded will be discussed and answered 

seriatim. 

isterrd 

view or 

_’ amended 

1. Can the insurance laws of this 8tate be r&inby this Board without a Commissioner of Insuraaae in 

the provisions of Senate Bill 2229 

Article 1.02(b) or the Texas Insurarke Code,-a8 

b sec. 2, S.B. 222, provides that: 

DOWB~S. rm, 

Witleg heretofore vested in and devolving upon 

the Board or Insurance Commissioners as heretofore constituted under 

mah or said Board; the E 

rlor statutes; the Chelrife Insurance Commissiciner; 

the Fire Insurance Commissioner, an4 the Casualty 

Insurance Commissioner shall hereafter be vested 

in the State Board of Insurance as a body, an4 

except as provided herein, they &j&l be ex~&sA, 

ate an4 the 

rules an4 reguiations ror unirorm application made 

by themBoard and &&jgct to the s-n of t&g 

4cl8a The duties of the &ate Board of Insurance 

shall be primarily in a supervisory capacity an4 

the carrying out and administering the details of 

the Insurance Code shall be primarily the duty, an4 

responsibility of the Commissioner Of Insurance 

acting un4er tha supervision of the Board.” 

Article 1.04(b) or the Code, as amended, provides: 

“The State Board of Insurance shall determine 

r)ollcy, u, g&gq and w but otherwise it 

shall execute its duties through the Commissioner 

of Insurance as herein provide4 ror, in accordance 

with the laws of this State and the rules and regulations for unirorm application a8 made by the 

Board.” 

that I 

Article 1.09(a) of the Code, as amended, protides 

* Emphases throughout are supplied. 
,’ 

State Board of Insurance, page 4 (WW-166) 

“The Board shall appoint a Commissioner of 

Insurance by and with the advice and consent of 

the Senate of Texas who shall be its chief executive and administrative ofrlcer, who shall be 

charge4 with the primary responsibility of administering, enforcing and carrying out the provisions of the Insurance Code under the supervision of the Board.” 

&ticle 1.09(b) provides that the Commissioner of 

Insurance shall be the State Fire Marshal and shall function 

as such subject to the rules and regulations of the Board, 

and Article 1.09(g) provides that the Commissioner of Insurance shall appoint such deputies, assistants, and other ~personnel as are necessary to carry out the duties and functions 

devolving upon him and the State Board of Insurance under the 

Insurance Code of this State, subject to authorization by the 

Legislature in its appropriation bills or otherwise, and to 

the rules of the Board. 

The wording of the foregoing articles of the Insurance Code, as amended, are clear and unambiguous. They specifically state that the State Board of Insurance shall act on1 

in a supervisory capacity. (See Art. 1.02(b) and Art. l.O9(a 7 1. 

The legislative intent is clear that all of the powers, functions, authorities, prerogatives, duties, obligations, 

and responsibilities which have heretofore been vested in the 

Board of Insurance Commissioners and the individual Comdssioner members thereof, are now vested in the new Board, but 

such powers, duties, and responsibilities, etc., when so vested, 

“shall be exercised, performed, carried out, an4 administered 

by the Commissioner of Insurance as the chief 6X6CUtiVe and 

administrative officer of the Board, subject to the superVisiOn 

of the Board.” The legislative intent is again manifested by 

the restatement of the functions of the State Board of Insurance and the Commissioner of Insurance contained in the last 

sentence of Article 1.02(b) and in the first sentence of Article 

l.O9(a3. 

The legislative intent is restated in Article 1.04(b) 

which restricts the functions of the Board to the determin~ation 

of policy, the making of rules, rixing of rates, and hearing of 

appeals from rulings and actions of the Commissioner of Insurance as provided in Article look(d). Afterrestricting the primar 

1.0 c 

functions of the Board to those just enumerated, Article 

(b) further provides that the Board shall execute its duties 

through the Commissioner of Insurance. 
State Board of Insurance, page 5 (W-166) 

In summary, S.B. 222 provides that all of the powers, 

duties, obligations, and responsibilities which have been heretofore vested in and exercised by the State Board of Insurance 

Commissioners under the authority of Article XVI, Section 38, 

of the Constitution of Texas and subsequent legislative acts, 

are now vested in the State Board of Insurance, but with the 

exception of the powers of determining policy, making rules, fixing rates and hearing appeals, the Legislature has specifically 

delegated to the Commissioner of Insurance the primary power’and 

authority to exercise, perform, carry out, and administer such’ 

powers and duties which were formerly exercised and performed by 

the Board of Insurance Commissioners, acting as a whole, or by 

the individual Commissioner members thereof. 

The answer to your Question No. 1 is vNo”. 

2. Is the Board authorized to pay a Commissioner of 

Insurance out of the lump sum appropriation for salaries in the 

current Appropriation Bill? 

Your request states that the Appropriation Bill now in 

effect does not have any appropriation for payment of a salary 

of a Commissioner of Insurance, although such appropriation is 

provided for in the Appropriation Bill which becomes effective 

Sepatember 1, 1957. You advise that the present Appropriation 

Bill does provide a lump sum appropriation for certain salaries 

and that this fund has a sufficient balance to pay the salary o f 

a Commissioner of Insurance at the rate of $2O,COO.O0 per year 

If it can be used for this purpose. 

We are advised that the lump sum appropriation referred to in your request is Item No. 67 in the present Appropriation Bill (Acts 54th Leg., 1955, Ch. 519, Art. III, p. 1465). 

This item appropriates from the Insurance Examiners Fund (No. 

54) $75,000.00 for the payment of salaries, wages, traveling expenses, and all supplemental expenses connected with the examination of insurance companies in Texas. This is a special fund 

created out of the moneys received from various insurers to reimburse the Board of Insurance Commissioners for the salaries 

and traveling expenses incurred by the Board’s examiners in the 

performance of their required duties in the examination of, the 

affairs of such insurers. (Art. 1.16, Texas Insurance Code). 

The Legislature, in appropriating from this fund the 

sum of $75,000.00 for each year of the biennium, did so for the 

purpose of paying the salaries, wages, traveling expenses and 

all supplementary expenses connected with the examination of the 
: 

‘State Board of Insurance, page 6 (WW-166) 

insurance companies in Texas an4 for no other purpose; and 

such fund, or any part thereof, may not be used for the payment of any mother items than those specifically named therein. 

It was the intention OS the Legislature that the sum so appropriated should be paid only to employees connected with the 

examination of such insurers and not to State officers. (Art. 

1.16, Texas Insurance Code). 

Manifestly, the payment or the salary or a Commissioner of Insurance was not contemplated by the Legislature when 

it enacted the Appropriation Bill presently in errect since, at 

that time, there was no office of Commissioner of Insurance authorized by law. Article 1.09(e) provides that the Compensation 

to be paid the Commissioner of Insurance shall be such sum as is 

provided for by the appropriation acts, and there is no provision for the payment of the salary of a Commissioner of Insurance contained in the Appropriation Bill now in errect. We do 

not pass upon the legality of any future appropriation by any 

ruture Legislature for the payment for servloes rendered by a 

Commissioner of Insurance from the date of his appointment up to 

August 31,, 1957. 

The answer to your second question is Vo.” 

3. hay a present employee of this Boar4 be appointed 

and act as, Commisslonrr of Insurance under the provisions of 

Senate Bill 222 and draw a salary rrom one of the appropriated 

items such as actuary or chier clerk in the present Appropriation 

Bill? 

Article 1.09(a) provider that the Boar4 shall appoint 

a Commissioner of Insurance by an4 with the advice and consent 

of the Senate of Texas. Inasmuch as the appointment of the 60~ 

missioner of Insurance by the Board specifically requires confirmation by the Senate, and in view of the many responsibilities and duties placed on him by S.B. 222, the office of Commissioner of Insurance is one of honor and trust, although it is 

not an office of profit or emolument at since no funds 

have been appropriated by the Legislature from which his salary 

can be paid. While the position of a chief clerk or actuary 

presently employed by the Board who receives his salary under the 

present Appropriation Bill is not that of a public officer, nevertheless it is a position of emolument or profit. 

Article XVI, Section 33, of the Constitution of Texas 

provides in part as follows: 

“The accounting officers of this State shall 

neither draw nor pay a warrant upon the Treasury 
. 

State Boar4 of Insurance, page 7 W-166) 

in ravor or any person ror salaries or compensation as agent, officer, or appointee who holds 

at the same time any other office or position or 

honor, trust, or profit, under this State. . . .I1 

The opinions of various Attorneys General have consistently held that where a person is appointed to an office 

of honor or trust, with or without emolument or profit, who, 

at the same time, holds a posit ion of emolument or profit under the State government, such psrson cannot receive payfor 

either orrice or position. See OpinionNo, O-1101 by Hon. 

Gerald C. Mann to Hon. Geo. H. Sheppard, State Comptroller, approved July 31,,1939, and Ogin+on No. O-5123 by Hon. Gerald C.- 

Mann to Hon. Gee. H. Sheppard, State Comptroller, approve4 March 

17, 1943. 

The answer to your third question is, eNo.n 

4. May the present Board appoint an acting Commissioner of Insurance, so that the new State Board of Insurance 

that Is to be appointed by the Governor may have the rigtit an4~ 

duty to appoint a Commissioner of Insurance? If your answer is 

yes, may this acting Commissioner of Insurance receive ang Compensation or salary for his services from the State ‘of Texas? 

5. If the present Board cannot appoint an acting Commissioner of Insurance and must appoint a Commissioner of Insurance to carry out the functions designated to him under Senate 

Bill 222, can the new Board to be appointed by the Governor remove him without cause and if not, what will be the term of his 

office? This question is asked in view of the provisions of 

Article XVI Sections 38 and 30, and because Senate Bill 222 requires the &ommissioner of Insurance to be confirmed by the Senate of t’he State of Texas. 

Article 1.03(a) provides that the members of the State 

Board of Insurance Commissioners in office immediately prior to 

the effective date of S.B. 222, shall serve as interim members 

of the State Board of Insurance until the appointment and qualification of the members of the Board under the provisions of 

Articles 1.02 and 1.03. Since the Legislature has specifIcally 

designated that all the powers, functions, duties and respoasibilities of the present Board have been vested in the new Boar4 

by the provisions of Article 1.02(b), the interim Board has the 

authority to appoint a’ Commissioner of Insurance. 

Article 1.09(a) of the Code, as amended, provides that 

the Board shall appoint a Commissioner of Insurance by and with 
State Board of Insurance, page 8 W-166) 

the advice and consent of the Senate of Texas, who shall hold 

his position at the pleasure of the Board and may be discharged 

at any time. As stated above, the Commissioner of Insurance 

functions as the State Fire Marshal, an4 his compensation shall 

be such ~6s is provided ror by the Appropriation Acts. The powers, authority, and duties of the Commissioner of Insurance have 

been discussed above in answer to Question No. 1, and he is authorized and empowered to appoint all deputies, assistants, and 

other personnel necessary to carry on the duties and functions 

devolved upon him and the State Board under the Insurance Code, 

subject to the authorization by the Legislature in its appropriation bills, and to the rules and supervision of the Board. (Art. 

1.09(g). I/ 

Since the Legislature has delegated to the Commissioner 

of Insurance the right to exercise, with certain exceptions, all 

of the powers and duties vested in the Board of Insurance under 

the provisions of Article XVI, Section 38, Constitution of Texas, 

above enumerated, and since his appointment by the Board is subject to confirmation by the Senate of Texas, he is a public officer of the State of Texas within the meaning of Article XV, Section 7, of the Constitution of Texas, and must therefore take 

the oath of office and give bond as required by Article 1.09(d) 

0r the Code, as amended, before entering upon the duties of his 

office. 

The interim Board has the power to appoint a Commissioner of Insurance but there is no statutory or constitutional 

authority or provision which would permit the interim Board to 

appoint an acting Commissioner of Insurance. However, since the 

Board is given the power to appoint a Commissioner of Insurance 

who shall hold his position at the pleasure of the Board, and in 

view of the provisions of Article XVI, Section 30, Constitution 

of Texas, which is discussed u, the Board may appoint a Commissioner of Insurance ror any period of time not to exceed two 

years rrom the date or the appointment. Stated differently, the 

interim Board may appoint a Commissioner of Insurance for the 

period of time which will elapse from the date of his appointment and the appointment and qualification of a CotnmisSiOn6r Of 

Insurance to be appointed by the new State Board of InSUtanC6 

when the members thereof are appointed and qualified under the 

provisions of Articles 1.02 and 1.03 of the Code, as amended. 

However, the Coxmissioner of Insurance so appointed by the interim Board cannot receive any compensation or salary at this 

time for his services from the State of Texas during his lncumbency up to September 1, 1957, if his tenure of office should be 

ror that period. 
State Board of Insurance, page 9 (M-166) 

The Commissioner, if appointed by the interim Board, 

must satisfy all of the requirements for eligibility and qualification enumerated in Articles 1.06 and 1.09(c) of the Code, 

as amended, and before entering upon the duties of his o’ffice 

the appointee must take the oath of office and give the bond 

required by law. After having so qualified, the Commissioner 

could immediately assume and execute all the powers, duties, 

functions and responsibilities which devolve upon the Commissioner of Insurance under the law, during the term of his tenure 

in such office for the period for which he was so appointed. 

Article XVI, Section 30, of the Constitution of Texas 

provides that “The duration of all offices not fixed by this Constitution shall never exceed two yearsr . . .n The Commissioner 

Texas, may not hold such appointment for a period exceeding two 

years from the date thereof, at which time he may again be appointed and the new appointment be subject to confirmation by 

the Senate. 

Although Article 1.09(a) of the Code, as amended, provides that the Commissioner of Insurance, after appointment, 

“shall hold his position at the pleasure of the Board and may be 

discharged at any time,” nevertheless, since he is a State officer, his removal or discharge from such office nay only be effected in the manner provided by the Constitution and laws of 

Texas. 

Article XV, Section 7, of the Constitution of Texas 

is as follows: 

“The Legislature shall provide by law for the 

trial and removal from office of all officers of 

this State, the modes for which have not been provided in this Constitution.” 

The Constitution of Texas has not provided for the trial or removal from office of the Commissioner of Insurance appointed by 

the Board of Insurance as provided by S.B. 222. However, Article 5961, R.C.S., p rovides that all State officers other than 

those specifically named therein, shall be removed from office 

or position by impeachment in the manner provided by the Constitution and in Title 100, Revised Civil Statutes of Texas. 
State Board of Insurance, page 10 (WW-166) 

There are no statutory provisions specifically providing for the removal from office of the Commissioner of fnsurance other than the proviso in. titicle 1.09(a) of the Code, 

as amended that he shall hold his position at the pleasure of 

,the State Board of Insurance and may be discharged at any time. 

This provision, however, is in direct conflict with the provisions of Article XV, Section 7 of the Constitution which provides for a V,rial~~ of all State officers such as the Commissioner of Insurance, and therefore the constitutional provision 

must prevail over the provision contained in S.B. 222. Ppranfiald v. State, 123 Tex. 467, 73 S.W.2d 83 (1934); m. 

Johnson, alu?ica* 

Should the interim Board appoint a Commissioner of 

Insurance to hold office for the period from the date of his 

appointment until the date of the appointment and qualification 

of the new State Board of Insurance and the appointment by the 

Board of his successor, he may not be removed from the office 

during the term of his appointment except by the process of impeachment . 

Answering Questions 4 and 5, you are advised that the 

interim State oard of Insurance cannot appoint an acting Commissioner of I to hold office until his successor is 

appointed by t new State Board of Insurance. However, the 

interim Board appoint a Commissioner of Insurance to h&d 

office until his’ successor is appointed by the new State Board 

of Insurance upo 

4 

the appointment and qualification of the members thereof, and,the appointment by the new Board of his successor in office. \ Such Commissioner cannot receive at this time 

any salary or pay or his services rendered during his tenure in 

office up to Septe ber 1 1957. When a Commissioner of Insurance 

is appointed by the\new &ate Board of Insurance his term of office will expire at ‘the end of two years from the date of his ap- 

$n;;Et if such appointment has been confirmed by the Senate 

A Commissi,oner of Insurance, when appointed, can only 

be removid from office by impeachment proceedings as provided by 

Article 5961, R.C.S., +n the manner provided in the Constitution 

of Texas and Title lOOi Revised Civil Statutes> 1325. 

Under the provisions of Senate Bill 222, 55th 

Legislature, the State Board of Insurance has the 

primary responsiblllty and duty to determine policy, 

rules, rates, and appeals, but all other powers, 
‘. . . . 

State Board of Insurance, page 11 (WW-166) 

functions, duties, and responsibilities must be 

exercised, performed, carried out and administered by the Commissioner of Insurance. The 

Commissioner of Insurance may not be paid for 

his services out of Item No. 67 of the present 

Appropriation Bill, which is an appropriation 

for the payment of salaries, wages, travel expense of employees, and all supplemental expenses connected with the examination of insurance companies in Texas, and there is no appropriation available for the payment of a salary to 

the Commissioner of Insurance under the present 

Appropriation Bill. If a present employee of 

the State Board of Insurance is appointed to act 

as Commissioner of Insurance, he cannot draw a 

salary from any of the appropriated items in 

the present Appropriation Bill. 

The interim State Board of Insurance cannot 

appoint an acting Commissioner of Insurance. The 

interim Board can appoint a Commissioner of Insurance and limit his term until the time when a Commissioner of Insurance is appointed by the new 

State Board of Insurance to be appointed as provided in Articles 1.02 and 1.03 of the Insurance 

Code, as amended, but such Commissioner of Insurance may not receive any compensation or salary 

at this time for his services from the State of 

Texas from the date of his appointment until SePtember 1, 1957. The Commissioner of Insurance is 

a State officer whose term of office will expire 

at the end of two ysars from the date of his appointment if such appointment is confirmed by the 

Senate of Texas, and he can only be removed by 

impeachment as provided by Article 5961, R.C.S., 

in the manner provided by the Constitution of Texas 

and the provisions of Article 100, R.C.S. 

Very truly yours, 

WILL WILSON 

Attorney Gene@ of Texas 

CKR:wb 

-C. K. Richards 

Assistant 
. . . 

State Board of Insurance, page 12 (WW-166) 

APPROVED: 

OPINION COMMITT&Ei 

8. Grady Chandler, Chairman 

John Reeves 

Houghton Brownlee 

James Ludlum 

RWIayED FOR THii ATTORNEY GENEROL 

BY: Gee. P. Blackburn