844 

m’. 

OFFICE OF THE ATTORNEY GENERAL OF TEXAS 

AUSTIN / 

Hon. Walter C. Woodward 

Board or xnsulanca comissioners 

Austin, Texas 

Dear Sir: 

opinion No. 

Be: 'Is the rate 

this basis? 

on the above stated 

tes or Examiner8 employed by 

In submitting our 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.law deals0nly~t~0 ci~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 

B 

ear; Senior ?Zxauiiners, 8alary not to smeed 

S,ISO.OO per ear; and ,Senior Bxawiners), 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'please advise this otiioe and the 

Comptroller% offlae if the rate of pay appl%ed 

to Mr. 8agderrord is 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 Comptroller 1s authorized to issue warrant 

on this basi8.v 

We quote rr0i8 a copy ei a Letter rmm Hon. Louis 

H. Pink, Superintendent Or~Iusurame of Wew York whioh was 

enclosed with your inquiry, as lo&lows:. 

*In the Bepartwent them are fourgrades 

or examiners, 

-th 

ely, Junlor,,Assistant, 8enior 

and Prlnclpal. e rirst three groups do substantially all 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 Mlsosllaneous Bureau, 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 lnarementa reaches 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 competitive examinations whereas promotions to grades 

higher than Juulcrresult from promotion examlnatlons aonflned to eligible men nithln the dspartment. The minimum and mariwrm salaries for eaoh 

g:rade rOu0w: 

"Grade 

Junior 

Assistant 

Senior 

Prlnclipal 
xon.tmltmr c.waodward, Page B 

*With reference to the speclrla lnquiiy 

you sake, our charges to the aompanlee exawined so far as safariem are 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&sited by rules of the 

State Comptroller, copy or whloh is enclosed. 

To these oharges is added 20$ of.the amount charged ror the salaries of exawinere, which added 

per cent is for the analytical and supervisory 

functions of 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, 

T3eoti6n 5. 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 Insurance Comaissloners or under 

his authority shsll be paid by the corporations 

examined la such amount as the Chairman of the 

Board 0r Insurance Commleeionera Shall certify 

to be Just and reasonable. 

wAssessments for the expenses of-suuh domestic examination, which shall be sufficient to 

meet alf the expenses and disbursements necessary 

to comply with the provleione of the laws or Texas 

relotinc: to thy examination or insurance comj%niee 

and to aomply veith the provisions of this Act, 

shall be made by the Chairman or the Board of 

Insurance @omnissioners upon the corporations or 

associations to be examinea takin into consideration annual prmnlum receipts, and 7 or admitted 

assets and/or insurance in force; provided suah 

assessments shall be made and collected only at 

the time such examinations are wade. 

*'$.ll sums collected by 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%d as hereinabove provided ror s&ll 

,be paid into the State Treasury to the credit 

of the Insurance Examination Fundg and the 

salaries and expenses of the actuary of the 

Board or Insurence Oonmisaioners and or,the 

examiners and assistants, and all other expenses or such examlnatlons,'shall be paid 

upon the certlficcte of the chairman or the 

Board of Insurance Commlaslonere by warrant 

of the Comptroller drawn upon auuh fund In 

the State masury. 

"It atany time it shall appear that 

addition pro-rata assessments are necessary 

to coverall of the expense and ~ia'bumawents 

required'by law 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 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 

disbursements ana no more. 

*In case or en exsminationor a ocmpany 

not organized under the laws of Texas, whether 

such exmmlnation Is made by the Texas authorities alone, or jointly with the Insurance supervisory authorities of another state or states, 

the expenses of suah examination due to Texas* 

participation therein, shall be borne by the 

company under 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 examlnersV remuneration ana expenses, and the other expenses 

of the Department of Insurance properly allocable 

to the examination; Payment shall be made dlreatly to the Chairman, ana all money collected by 

assessments on fore@ companies rOT the cost 

of examination shall be deposited ln the Stats 

Treasury by the Chairman to the credit of the 
848 

1’ 

Hon. Walter C. Woodward, Page 5 

Insuranoe Examination 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 determined by the method hereinafter 

provided, when verified by their affidavit end 

approved by the ChaIrman; end mid money is 

hereby appropriated for that purpose, the balanoe, If any, to remain in the Insuranoe Xxamination 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 examination to persons aonduoting the 

examination of 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 reasonable figure 

as he may determlne. 

*Seoticn 2. 

93eation 3aa: The Chairman of the Board 

of Insuranoe Commissioners 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 Insurance Commissioners all suah 

examinations of insurance companies, 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 performance of its duties 

and for aid and adviae and aounsel in oonneotion with all such examinations required by l&w. 
Hon. Walter C. Woodward, Page t3 

Suah examiners and assistants shall aa direot6d by the Chainnan or the Board of inamanoo 

Commissioners, perform all the duties relative 

to all examinations provided by law.to be made 

by the Board of Insuranoe Commisslonere 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 Inouranoe Darmissioners 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 Insurance Department or not. 

"All suoh examiners and assistants and sueb 

actuary shall hold office subject to the will 

of the Chalrm$n of the Soard of Insuranoe Commissioners ancl the number of such examiners snd 

assistants may be increased or decreased from 

time to time to suit the needs of the examining 

work. The actuary and all such examiners and 

.assistants shall be paid out of the Insurance 

Examination Fund, such salaries as shall be fixed from time to time by the LeSLslature, and 

their neoessary traveling expenses shall be 

@&put of said. fund upon sworn, itemized 

<&%unts thereof to be rendered monthly and approved by the ClUirplan of the Board of Insurance 

Commissioners beforapayment. 

Vhere the Chairman of the Board shall deem 

it advisable he may commission the 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 organized under the 

laws of Texas and allow them oozpensation as 

herein provided, except that they~~may not be 

cthexwise compensated duringthe 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 serve 
Hon. l!:alter C. Woodward, Page 7 

as such if, while holding suoh position, he 

shall directly or lndireotly accept from any 

insurance oompany ady qployment or pay or 

compensation or gratuity on account or any 

servioe rendered or to be rendered or 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 

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 remuneration end expense allamnce of the exam&&- 

ers at such reasonable figure as he may determine. 

Aocording to the inrormtion contalnad j.n the 

letter of the Hon. Iouis 11. ?ink, Superintendent of Insuralyle, above quoted, aharges made to the aompany exarnlned 

so far as salaries are concerned, are on the basis of 

l/giSt3th of tho examiner's annual salary times the narnbar 

of days required for the examination, plustraveling and 

subsistence expenses 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 analytical and supervisory runctiom of 

the chief OF princigpa examiner. Under this. formula 

char es made to comphnics examined should be on the basis 

of 1 7 280 of the examiner*8 annual salary times the number 

of days req,uired for the examination plus traveling and 

subsistence expenses plus twenty per cent of these Charges. 

In submitting your 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 respeotfully advised that it is the 

opinion of this department that the rate of pay applied 

to Kr. Sanderford is not 'correct under the provision of 

Senate Bill No. 397 and the letter from the Superintendent 

of Insurance of New York and that the Comptroller is not 

authorized to @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 salary which is $4,200.00 

per year tlmes the number of days required for the 

sxslninatlon plus traveling and suhslstenae expenses 

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