### 844

m’

.

OFFICE OF THE ATTORNEY GENERAL OF TEXAS AUSTIN /

Hon. Walter C. Woodward Board or xnsulancacomissioners Austin, Texas

Dear Sir:

opinion No.

Be: 'Is the 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 expernates While the Texas.lawdeals

### 0nly~t~0ci~3ses 0r Examlners,Assistant and Senior, the appropriatioa bill provides for three classes so far as the rate 0r pay is eonwarned. These three classes are: Assistant Examiners, a&lary not to exceed (t&,520.00 per /Hon. Waltsr C. Woodward,Page 8

Bear; Senior ?Zxauiiners, 8alary not to smeed S,ISO.OO per ear; and ,Senior Bxawiners),

salary not to exaeea L ,200.OOper year, There are only tour Ensminers in the last rate alass of $4,SO0600per year, and Wr. Sandsriordis one 

### or these examiners. In other words, he is paid the hi-best rate that Is in errmat in Texas.

VI11 you'please

advise this otiioe and the Comptroller% offlae if the rate of pay appl%ed to Mr. 8agderrordis aorreut under the provisi~nrr of t3s.n 3 a$3ill Bo. 397, and the letter irow the Superifi

ehdent of'

Insursnoe or New York, and if the Comptroller1s authorized to issuewarrant
on this basi8.v

We quote rr0i8

a copy ei a Letter 

### rmmHon. Louis H. Pink, Superintendent Or~Iusurame of Wew York whioh was enclosedwith your inquiry,as lo&lows:.

*In the Bepartwentthem are fourgrades 

### or examiners,

-th ely, Junlor,,Assistant, 8enior and Prlnclpal. e rirst three groups do substantiallyall of the actual exawinatlon work. The latter or uprlnolpaln group 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. Appointmentsto the Junior grade are wade as a result of open competitive examinations whereas promotions to grades higher than Juulcrresultfrom promotion examlnatlons aonflned to eligiblemen nithln the dspartment. The minimum and mariwrm salaries

### for eaoh g:rade 

### rOu0w:

"Grade

Junior Assistant Senior Prlnclipalxon.tmltmr c.waodward, Page B

*With referenceto the speclrla lnquiiy you sake, our charges to the aompanleeexawined so far as safariemare concerned, is on the basis or 1/2SOth of~the exsqlnnsr*s annual saIaxy times the nus&er or daya required ror the emminati~n.

we also charge for traveling and eubsiatenoe expenses

which are I&sitedby rules of the State Comptroller, copy or whloh is enclosed. To these oharges is added 20$ of.the amount charged ror the salariesof exawinere, which added per cent is for the analyticaland supervisory functionsof the chief or *principal"

Senate Bill No. 391, A.&cl of the of the46th Legislature, amending Articles revised civil Statutes,reads ae follows: examiner.w
Regular Seasion~ 4690a and 409Ob,

T3eoti6n5. The expenses

### or all 

### tions 0r domedi insuranoe~ 

### ooqp~ibe examinamade on behalf ot the State of Texas by the Chalrmn of the Board of InsuranceComaisslonersor under his authorityshsll be paid by the corporations examined la such amount as the Chairman of the Board 

### 0r InsuranceCommleeionera Shall certify to be Just and reasonable.

wAssessments

for the expenses of-suuh domestic examination,

which shall be sufficientto meet alf the expensesand disbursements necessary to complywith the provleioneof the laws or Texas relotinc:

to thy examination



### or insurancecomj%niee and to aomplyveith the provisionsof this Act, shall be made by the Chairman or the Board of Insurance@omnissioners upon the corporationsor associations

to be examinea takin into consideration annual prmnlum receipts,and7or admitted assets and/or insurance in force; provided suah assessmentsshall be made and collected only at the time such examinations are wade.
*'$.ll sums collectedby the Chairman of the Board of InsuranceCowmlssioners, or under his authority,on account or the cost of examinationsEon. Walter C. Woodward, Page 4

.aaeess%d

as hereinabove

provided ror s&ll ,bepaid into the State Treasury to the credit of the Insurance

ExaminationFundg and the salariesand expensesof the actuary of the Board 

### or InsurenceOonmisaioners and or,the examinersand assistants, and all other expenses or such examlnatlons,'shall be paid upon the certlficcte of the chairman or the Board of InsuranceCommlaslonere by warrant of the Comptroller drawn upon auuh fund In the State masury.

"It atany time it shall appear that additionpro-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 surplus arising from any and all such assessments,
over and above such expemes and disbursements, shall be applied *n reduotiohof subsequent assessments In the proportion

### WWX388d so that there shall.

be so assessed and collected the funds neoessaryto meet suoh expenses and disbursements

ana no more.

*In case 

### or en exsminationor a ocmpany not organizedunder the laws of Texas, whether such exmmlnationIs made by the Texas authorities alone, or jointlywith the Insurance supervisory authoritiesof another state or states, the expenses of suah examinationdue to Texas* participation

therein, shall be borne by the companyunder examination. Payment or such cost shall be made by the company upon presentation of itemizea

written statement by the Chalrman, and shall consist of the examlnersVremuneration ana expenses,and the other expenses of the Departmentof Insuranceproperly allocable to the examination; Payment shall be made dlreatly to the Chairman,ana all money collectedby assessmentson fore@ companies

### rOTthe cost of examinationshall be deposited ln the Stats Treasury by the Chairman to the credit of the

### 848 

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Hon. Walter C. Woodward,Page 5

InsuranoeExaminationFund 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 InsuranoeCommlsslonera, the examhers' rcrmuneratlon and expenses in the amounts determinedby the method hereinafter provided,

when verified by their affidavitend approvedby the ChaIrman;end mid money is hereby appropriated for that purpose, the balanoe, If any, to remain in the InsuranoeXxaminationFund 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 reoognized charge ror suoh servioe, the Chairman shall fix the remuneretion.and expense allewanoe of the examiners at suoh reasonablefigure
as he may determlne.

*Seoticn 2.

93eation 3aa: The Chairman of the Board of InsuranoeCommissioners shall appoint suoh number of exsminers,one of whom shall be the chief examiner,and suoh number of assistant8
as he may iieem

neces::ary

for the purpose of making on behalf of the State of Texas and of the Board of InsuranceCommissioners all suah examinations

of 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 .Insuranoe

Commissioners

to advise the Board in oonneatlon

with the performanceof its duties and for aid and adviae and aounsel in oonneotion with all such examinationsrequired by l&w.Hon. Walter C. Woodward,Page t3

Suah examinersand assistantsshall aa direot6d by the Chainnan or the Board of inamanoo Commissioners,

perform all the duties relative to all examinations provided by law.tobe made by the Board of InsuranoeCommisslonere of the State of Texas, and it is the purpose of this Act to provide Zor the examination hereunder by the Chairman of the Ward of InouranoeDarmissioners

### 0r all corporQtions, 

### rirms or pssc sons engaged in the business of writInS 3.nsurante of any kind in this State whether now subjeot to the supervision of the InsuranceDepartment or not.

"All suoh examiners and assistants and sueb actuary shall hold office subject to the will of the Chalrm$nof the Soard of InsuranoeCommissionersancl

the number of such examinerssnd assistants

may be increasedor decreasedfrom time to time to suit the needs of the examining work. The actuary and all such examinersand .assistants

shall be paid out of the Insurance ExaminationFund, such salaries as shall be fixed 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 approved by the ClUirplan of the Board of Insurance Commissioners

beforapayment.

Vhere the Chairman of the Board shall deem it advisablehe may commissionthe actuary of the %arc?, the chief examiner,or any other exminer or employee of the Department,or any other person, to conduct or assist in theexamination of any company not organizedunder the laws of Texas and allow them oozpensation as herein provided,except that they~~may not be cthexwisecompensatedduringthe time they are assiqned to such foreign company examinations. Other than as thus provided,neither the actuary of the Poard of Insurance Commissioners nor any examiner or asslstsnt shall continue to serveHon. l!:alter C. Woodward, Page 7

as such if, while holding suoh position,he shall directlyor lndireotlyaccept from any insuranceoompany ady qployment or pay or compensation

or gratuity on account 

### or any servioe rendered or to be renderedor any account whatsoever."

Senate Bill No. 397, supra, provides tlmt examiners representing the state of Texas in examination of companies outside of tho state of Texas shall reoeive remuneration

and expenses the same as shall be Bald by the home state of a oompany under examination to persons conductingthe examinationof a Texas company admitted to do business in that state. However, if there be no recognizedcharge for such service,the Chainnanshall fix the remuneration end expense allamnce of the exam&&- ers at such reasonablefigure as he may determine.

Aocording to the inrormtioncontalnad j.n the letter of the Hon. Iouis 11. ?ink, Superintendent of Insuralyle, above quoted, ahargesmade 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 subsistenceexpenseswhich are limitedby 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 supervisory 

### runctiom of the chief OF princigpa examiner. Under this. formula char es made to comphnics examined should be on the basis of 1 280 7 of the examiner*8annual salary times the number of days req,uired

for the examination plus travelingand subsistenceexpensesplus twenty per cent of these Charges. In submittingyour payroll to the Comptroller, the salary of $4,200.00per year should be used and not the salary of the senior examinerof New York.

You are respeotfullyadvised that it is the opinion of this departmentthat the rate of pay applied to Kr. Sanderford is not 'correct under the provisionof Senate Bill No. 397 and the letter from the Superintendent of Insuranceof New York and that the Comptrolleris not authorizedto @s.sue, warrant8 onthis basis. You are further-: 

### 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 Superintendent of Inswanae of Ilaw

York should be on the basis of l/?BO of the examlner*s,annual salarywhich is $4,200.00 per year tlmes the number of days required for the sxslninatlon

plus travelingand 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?AL

OF TliXAh

AW:AW