, 

Ron. Walter C. Woodward, Chairman 

Board of Insurance ComMasloners 

Austin, Texas 

Dear Sir: 

Opinion No. O-1471 

Re: The provisions of Senate Bill No. 397, 

Acts of the Regular Session of the 46th 

Legislature, and of the special rider 

attached to the General Appropriation 

Bill of the section dealing with the 

Examining Division of the Insurance Department governs the rate of pay and 

expense allowance of Examiners conducting an out of state examination. 

Your letter of September 21, 1939 in which you submit 

for an opinion of this department the question of the proper 

rate of payment of salary and expenses for a Texas examiner 

while engaged in examining an out of state insurance company 

at the home office of such company has been received. 

We deem it advisable to herein set out the pertinent 

parts of your Inquiry as followa: 

"Senate Bill 397, passed by the Forty-sixth 

Leglalature, Regular Session 1939, amended Section 

3 of Chapter 152 of the Regular Session of the 

Forty-second Legislature (Article 4690a) pertaining to the examination of insurance companies by the 

Chairman of the Board of Insurance Commissioners 

of Texas. In providing for the examination of outof-state insurance companies and the rate of pay 

of Texas Examiners engaged In such work, Senate 

Bill 397 contained the following provision: 

'I Examiners' remuneration and expenses shall be the same as that which 

would be paid by the home state of a 

company under examination to persona 

conducting the examination of a Texas 

company admitted to do business In that 

State. If there be no recognized charge 
Hon. Walter C. Woodward, page 2 o-1471 

for such services, the Chairman shall 

fix the reumneration and expense allowance of the examiners at such reaaonable figure as he may determine.' 

"This Bill contained the emergency clause 

and was passed in the Senate by a vote of thirty 

for and one against, and in the House by a vote 

of one hundred and twelve for and none against; 

clearly indicating the Intention of the Legialature. 

"Innnediately after this Bill became effectlve (May 15, 1939), we began operating under 

its provisions. In all cases where one of our 

Examiners was assigned to the examination of an 

out-of-state insurance company, we ascertained 

from the Insurance Commissioner of the particular 

state, the rate of pay and expense allowance for 

his Examiners when assigned to a Texas company, 

and we have been paying our Examiners such retaliatory rate. This rate has varied greatly 

depending upon the rate of pay of the particular 

state and has been applied without regard to the 

rate of pay in effect when our Examiners are assigned to Texas companies, which latter rate was 

flxed by the General Appropriation Bill of the 

Forty-fifth Leglslatire. For Instance, in your 

opinion No. 3075 you held that in the case of 

Examiner Homer Sanderford assigned to an insurance 

company domiciled in New York State, after having 

determined the applicable New York rate in the 

examination of Texas companies, we were entitled 

to pay Mr. Sanderford that same rate and give 

him the same expense allowance. This per diem 

rate and expense allowance was In excess of Mr. 

Sanderford's rate when examining a Texas company 

in Texas, the applicable New York rate being 

higher than the Texas rate. 

,, . . . . . . . 

"The question propounded to you is: Do the 

provisions of Senate Bill 397, quoted, and the 

provisions of the special rider to the Examining 

Division appropriation, also quoted, govern 

the rate of pay and expense allowance to our 

Examiners in out-of-state examinations, or is 

that rate fixed according to the positions 

listed in detail by the General Appropriation 
Hon. Walter C. Woodward, page 3 o-1471 

Bill and the expense allowance limited to a 

maximum of $4.00 per day by the general rider 

to the Appropriation bill? This question has 

been raised by the State Comptroller . . . ." 

We held in our Conference Opinion No. 3075, dated 

August 3, 1939, referred to by you, that a Texas insurance 

examiner conducting an examination In a foreign state of a 

company Incorporated therein and having a permit to tranaact business in Texas is entitled to compensation and expenses equal to the compensation paid by that particular 

state to an examiner conducting an examination of a Texas 

company in Texas, and having a permit to transact business 

in such forelgn state. We further held in such opinion that 

the Commissioner of Ltfe Insurance of Texas was given a diacretlon to determine into which classlflcatlon of examiners 

established by a foreFgn state, a Texas examiner should be 

placed in the event the classifications of Texas and such 

foreign state are not Identical or, In event there Is no recognlzed charge for such service. 

Senate Bill No. 397~;Acts of the Regular Session of the 

46th Leglalature by which Articles 46gOa and 4690b, Revised 

Civil Statutes of Texas, were amended, and upon-which our above 

conference opinion was baaed contained an emergency clause and 

became effective May 13, 1939. The question submitted resolves 

itself Into the proposition of determinlng whether salaries 

and expenses of examiners conducting examLnation8 outside of 

Texas are to be set by the terms and provisions of Senate Bill 

No. 397, aupra, or, are to be limited to the salar 

t 

figure set 

out in the General Appropriation Bill ana to the $..OO per day 

limitation upon traveling expenses, thereby avoiding the plain 

Fntent of the Legislature as expressed in such Senate Bill No. 

397. 

Paragraph 5 of Article 469Oa taken from Senate Bill No. 

397, reads as follows: 

"In case of an examination of a company 

not organized under the laws of Texas, whether 

such examination is made by the Texas authorities alone, or jointly wlth the insurance supervisory authorities of another state or states, 

the expenses of such examination due to Texas' 

particlpatlon therein, shall be borne by the company under examination. Payment of such coat 

shall be made by the company upon presentation 

of itemized written statement by the Chairman, 

and shall consist of the examiners' remuneration 

and expenses, and the other expenses of the 
Hon. Walter C. Wocdward, page 4 o-1471 

Department of Insurance properly allocable to the 

examination. Payment shall be made directly to the 

Chairman, and all money collected by assessment 

on foreign companies for the cost of examination 

shall be deposited in the State Treasury by the 

Chairman to the credit of the Insurance Examination Fund out of which shall be paid, by warrant 

of the State Comptroller of Public Accounts on 

voucher of the Chairman of the Board of Insurance 

Commissioners, the examiners' remuneration and 

expenses in the amounts determined by the method hereinafter provided, when verified by their affidavit 

and approved by the Chairman; and said money is 

hereby appropriated for that purpose, the balance, 

If any, to remain in the Insurance Examination Fund 

in the State Treasury subject to be expended for 

the purposes as are other funds placed therein. 

Examiners' remneratlon and expenses shall be 

the same as that which would be paid by the home 

state of a company under examination to persona 

conducting the examination of a Texas company 

admitted to do business in that State. If there 

be no recognized charge for such service, the 

Chairman shall fix the remuneration and expense 

allowance of the examiners at such reasonable 

figure as he may determine. Acts 1931, 42nd Leg., 

p. 252, ch. 152, Para. 3, as amended Acts 1939, 

46th Leg., S.B. No. 397, Para. 1." 

We observe a definite, full and complete appropriation 

by the Legislature of all funds collected by virtue of such 

act for carrying out the purposes therein mentioned. There 

seems to be no question as to its sufficiency from the effective date of such act to September 1, 1939, and you advise 

that the Comptroller now raises the question of whether the 

same is effective for the fiscal years, beginnlng September 

1, 1939 and September 1, 1940. 

Looking to the terms and provisions of Senate Bill 427, 

which 1s the General Appropriation Bill of the 46th Legislature, 

for the two year period beginning September .l, 1939 and ending 

August 31, 1941, we find the following pertinent language In 

the section dealing with the examining division of the Insurance 

Department: 

"For the purposes of paying the foregoing examination expense and such expense 

as is necessary incident to the examination 

work and the payment of the salaries of any 

additional examiners, stenographers, clerks 
Hon. Walter C. Woodward, page 5 o-1471 

and such help as is necessary in the administration of the examining division (provided 

any additional employees performing similar 

work to the posltlons designated hereinabove 

shall not receive a greater sum of compensation than that herein provided), and for 

defraying all other expenses necessary for the 

administration of the provisions of Chapter 

152 of the General Laws of the Regular Session 

of the Forty-second Legislature and Chapter 

264 of the Forty-fourth Legislature, and m 

-- and all amendments thereto, and as amaed & 

Senate Bill x, Acts Regular Session of the 

semature, m, there is hereby aporopriated all fees and assessments &ollected 

under authority of said Examining &, together 

with any balances at the end of a preceding 

fiscal year, for each of the fiscal years ending August 31, 1940, and Auguat31, 1941. The 

head of the department shall make application 

to the Board of Control and recetve its approval in writing before employees, other than 

those Itemized in the appropriation bill, are 

employed. Said application shall set out the 

reasons, and necessity for the employment of 

the additional employees." (Underscoring ours) 

Thus, it clearly appears that there is a definite and 

clear appropriation of all fees and assesaments collected 

under authority of the Examining Law for the purpose of carryout the terms of Senate Bill 397, supra, as well as the other 

pertinent statutes. 

It is therefore, the opinion of this department and 

you are so advised that the prov1aions of Senate Bill 397, 

aupra, and the hereinabove quoted special rider to the Examlning Dlvislon of the Insurance Department contained in the 

General Appropriation Bill governs the rate of pay and expense 

allowance of examiners conducting an out-of-state examination 

and is to be arrived at in accordance with our conference 

opinion No. 3075, and that the same shall be effective until 

August 31, 1941. 
- . _ 

Hon. Walter C. Woodward, page 6 O-1471 

Yours very truly 

ATTORNEY GENERAL OF TEXAS 

By a/Lloyd Armstrong 

LLoyd Armstrong 

Assistant 

LA:AW:wc 

APPROVED OCT 14, 1939 

a/Robert E. Kepke 

(Acting) ATTORNEY GENERAL OF TEXAS 

APPROVED Opinion Committee By s/BP Chairman