.



## NE TEXAS

December 14, I94g

Won.George B. Butler, Chirmaa Beard ofInsurance Commiroionars Austin, Texas 

### Opiaioq no. v-367. ZC0: Tke legality ofallowiq) credit ofapra rata ofaxemination **few e@ast**  

### pose **pramiwms on**  **keelth end**  

### accident insurence written, **by** 

### canpnies op arating ttxder cosurlty Chs*dO%S.



### yaprt

## btur rdpwating onr **opinion** 

### raIative to,the above ceptiared **meWer** 

### reads aofollows:

“Domestic life insurers, which may also write haalthandaccident insurance, report andpaytbair annual premium taxes as provided by **House** 

### Bill 472, 988 Legislature, which is Article 7064a, ofVernon’s Statutes, andwhich **includes the** 

### following allowance ofaradit 024Fe grow Yws:

....and provided further thattheamount ofall examination andvaluation fees **paid** 

### insuch **taxable** 

### year to or for theuse oftheState ofTexas **by** 

### l **ny ineoremce**  

### organieetion hereby affected shall **be** 

### allowed as a cradit onthaamount ofpremium taxes to**be pid**  **br 67**  

### awh **insurance** 

### organiaation for such taxable year.

“Insurers other than**life** 

### may, andfrequently **do,** 

### write health **end** 

### accident insurance along withtheir other linas ofcoverage. The premium taxes ofthese companies are reported andpaid antheir healthand accident business under Article 7064a, and onthebasinasa **transected** 

### inall oftheother lines under theprovisiona ofArticle 7064. Intheexamiaation ofsuch companies **no** 

### effort is **nqede by**  

### this Departmeat toallocate andpro-rate theaxpense ofexamimtta iMo tba healthandaccident portion ofthe**compap ’** **o** 

### b~irr88 as distinguished~**freak thhr** **businesa** 

### iacideat totk cam- -y’s other linas ofinsurance, nor **do we**  **tkidr rucb** . .



### lirn. George B. Butler, Page 2 (V-967)

anallecrtion could be made with any reasonable degree ef

### aecurecy. The company can only be examined as a WbOk.
“One of 

### the companies writing health and accident insurance along with other coverages under a casualty charter has inquired as to whether it will be permissible to pro-rate the examination expense on the basis of the ratio which the taxable premiums received from 

### health and accident insurance bears to such premiums received from the company’s other lines of insurance. In view of the recency of the enactment of the bill and the allowance of the examination fee deduction, there is no departmental construction of the problem. 

### “We, therefore, respectfully request your opinion es towhether companies other than life, writing health 

### and accident inaurence may have the benefit of the examination fee deduction inArticle 7064a. If

### your answer is in the affirmative. please advise me whether the company may have as a deduction the entire examination expanse end if not, whether the proration suggested by the cempany is allowable” The portions of H. B. No. 472, Chapter 620, Acts Slst Legiolature, p. 1365, codified as Article 7064a, read:

“Every 

### group of individuals, society, association, or corporation (all ofwhich shall be deemed included in the term “insurance organiution’ wherever used in this Act) organized under the laws of this State and trrns8ctin.g 

### the business of life insurance, personal accident insurance, life and accident insurance, or health and 

### l ccadent msurance for profit, or for mutual beneBt, er protection in thraState shall on or before the nt day of **Mereh** d each year ~.fileits annual statement ahowing the gross amount of premiums collected during the year ending 

### December 31st, preceding, from persons residing or domiciled in this State on policies ef insurance, and showing in separate columns the firstyear premiums and the renewal premiums collected on such Texas policies, and each 

### such insurance organieebirar,except local mutual aid associations, fraternal 

### b-f&t societies, end fkatermarllinsurance associations or aeeieties that limit their membership to one (1) ocerptien. shll pay an annual tax of one per cent (1%) ef tfp grass amount ef Pruniams collected during such m&rem persons res%img er domiciled in the State e# ‘f;ur*s m pelicias d iaamrance. 0D0 end providedf’fon. George B. Butler, Page 3 (v-967)

further that the amount of all examination and valuation fees paid in such taxable year to or for the use of the State of Texas by any insurance organization hereby affected shall be allowed as a credit on the amount of premium taxes to be paid by any such insurance organization for such taxable year.” (Emphasis ours.)
The above quoted portions ofArticle 7064a are plain & unambiguous and therefore not susceptible to construction. The stktute unequivocally provides that domestic insurance companies who transact the business of life insurance, personal accident insurance, life and accident insurance, or health and accident insurance shall be allowed the amount of mTney paid for examination fees during any taxable year to or for the 

### use of the State of Texas as a credit on the amount of premium taxes to be paid during that taxable year. You stste that domestic insurance companies other than life insurance companies may and frequently do write health and accident insurance along with their other. lines of coverage. These companies, other than life, who also write health and accident insurance, ceme clearly within the terms of the quoted proviso, in so far is the premiue taxes to be paid on the writing of the health and accident insurance are concerned. The Legislature did not make any provision relative to prorating the credit. Of course the credit to be taken by the companies in question can only be allowed as against *e premium taxes levied under Article 7064a, and cannot be allowed &a against the premium taxes levied under Article 7064,
SUMMARY
Domestic insurance companies who write insurance upon which premium taxes are levied under Article 7064a, V.C.S., are entitled to a credit, as against the premium taxes levied during a taxable year, to an amount equal to the amount of all examination fees paid in such taxable year to or for the 

### use of the State of Texas. This credit cannot be allowed as against premium taxes levied under Article 7064, V.C.S.
Yours very truly
APPROVED

- - ATTORNEYGENERALOF TEXAS

W. V. Geppert Assistant
WVG/mwb