,

Ron. Walter C.Woodward, Chairman

Board of InsuranceComMasloners Austin, Texas

Dear Sir:
OpinionNo. O-1471

Re: The provisions of Senate Bill No. 397, Acts of the Regular Session of the 46th Legislature, and of the specialrider attached to the General Appropriation Bill of the sectiondealing with the ExaminingDivision of the InsuranceDepartment governs the rate of pay and expense allowance of Examiners conducting an out of state examination.

Your letter of September 21, 1939 inwhich 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 examiningan 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 Inquiryas followa:

"SenateBill 397, passed by the Forty-sixth Leglalature,Regular Session 1939, amended Section 3 of Chapter 152 of the Regular Session of the Forty-secondLegislature (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 suchwork, Senate Bill 397 contained the followingprovision:

'I Examiners' remuneration and expenses shallbe the same as that which would be paid by the home state of a companyunder examination to persona conducting the examinationof a Texas company admitted to do business In that State. If there be no recognized chargeHon. Walter C. Woodward, page 2 o-1471

for such services, the Chairman shall fix the reumneration and expense allowance of the examinersat such reaaonable figure as he may determine.'

"ThisBill 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 indicatingthe Intention of the Legialature. "Innnediately

after this Bill became effectlve (May 15, 1939),we began operatingunder its provisions. In all cases where one of our Examinerswas assigned to the examinationof an out-of-state insurance company,we ascertained from the InsuranceCommissionerof the particular state, the rate of pay and expense allowance for his Examinerswhen 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 appliedwithout regard to the rate of pay in effectwhen our Examiners are assigned to Texas companies,which latter rate was flxed by the General AppropriationBill of the Forty-fifth Leglslatire.For Instance, in your opinionNo. 3075 you held that in the case of ExaminerHomer Sanderford assigned to an insurance company domiciled inNew York State, after having determined the applicableNew York rate in the examination of Texas companies,we were entitled to pay Mr. Sanderford that same rate and give him the same expenseallowance. This per diem rate and expense allowancewas In excess of Mr. Sanderford'srate when examining a Texas company in Texas, the applicableNew York rate being higher than the Texas rate.

,,

....... "Thequestion 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 expenseallowance to our Examiners in out-of-stateexaminations, or is that rate fixed according to the positions listed in detail by the General AppropriationHon. Walter C. Woodward, page 3 o-1471

Bill and the expense allowance limited to a maximum of $4.00per day by the general rider to the Appropriationbill? This question has been raised by the State Comptroller

. . . ."

We held in our Conference OpinionNo. 3075,dated August 3, 1939, referred to by you, that a Texas insurance examiner conductingan examination In a foreign state of a company Incorporatedtherein and having a permit to tranaact business in Texas is entitled to compensationand expenses equal to the compensationpaid by that particular state to an examiner conductingan 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 intowhich classlflcatlon of examiners establishedby a foreFgn state, a Texas examiner shouldbe 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.

SenateBill No. 397~;Acts of theRegular Session of the 46th Leglalatureby which Articles 46gOa and 4690b,Revised Civil Statutes of Texas,were amended, and upon-which our above conference opinionwas baaed contained an emergency clause and became effectiveMay 13, 1939. The question submittedresolves itself Into the proposition of determinlngwhether salaries and expenses of examiners conducting examLnation8outside of Texas are to be setby 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 AppropriationBill ana to the $..OOper day limitationupon traveling expenses, thereby avoiding the plain Fntent of the Legislatureas expressed in such SenateBill 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 organizedunder the laws of Texas, whether such examination is made by the Texas authorities alone, or jointlywlth the insurance supervisory authorities of another state or states, the expenses of such examinationdue to Texas' particlpatlon therein, shall be borne by the company under examination. Payment of such coat shallbe made by the companyupon presentation of itemizedwritten statementby the Chairman, and shall consist of the examiners'remuneration and expenses,and the other expenses of theHon. Walter C.Wocdward, page 4 o-1471

Department of Insuranceproperly allocable to the examination. Payment shallbe made directly to the Chairman, and all money collectedby assessment
on foreign companies for the cost of examination shall be deposited in the State Treasuryby the Chairman to the credit of the InsuranceExamination Fund out ofwhich shallbe paid, by warrant of the State Comptrollerof Public Accounts on voucher of the Chairman of the Board of Insurance Commissioners, the examiners'remuneration and expenses in the amountsdeterminedby the method hereinafter provided,when verifiedby their affidavit and approved by the Chairman;and saidmoney is hereby appropriated for that purpose, the balance, If any, to remain in the InsuranceExaminationFund in the State Treasury subject to be expended for the purposes as are other funds placed therein. Examiners' remneratlon and expenses shallbe the same as that which would be paid by the home state of a companyunder 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 examinersat such reasonable figure as he may determine. Acts 1931, 42ndLeg., p. 252, ch. 152, Para. 

### 3, as amended Acts 1939, 

### 46thLeg.,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 thereinmentioned. 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 Comptrollernow raises the question ofwhether 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 AppropriationBill of the 

### 46thLegislature, for the two year period beginning September .l,1939 and ending August 

### 31, 1941,we find the followingpertinent language In the sectiondealing with the examiningdivision of the Insurance Department:

"For the purposes of paying the foregoing examination expenseand such expense as isnecessary incident to the examination work and the payment of the salaries of any additional examiners, stenographers, clerksHon. Walter C. Woodward, page 5 o-1471

and such help as is necessary in the administration of the examiningdivision (provided any additional employeesperforming similar work to the posltlons designated hereinabove shallnot receive a greater sum of compensation than that herein provided), and for defraying all other expensesnecessary for the administration of the provisions of Chapter 152 of the General Laws of the Regular Session of the Forty-secondLegislature and Chapter 264 of the Forty-fourthLegislature, 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 fiscalyear, for each of the fiscalyears endingAugust 31, 1940, and Auguat31, 1941. The head of the department shallmake application to the Board of Control and recetve its approval inwriting before employees, other than those Itemized in the appropriationbill, are employed. Said application shall set out the reasons, and necessity for the employment of the additional employees." (Underscoringours)
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 hereinabovequoted specialrider to the ExamlningDlvislon of the InsuranceDepartment contained in the General AppropriationBill governs the rate of pay and expense allowance of examiners conducting an out-of-stateexamination and is to be arrived at in accordancewith our conference opinionNo. 3075, and that the same shallbe effectiveuntil August 31, 1941.- . _

Hon. Walter C.Woodward, page 

### 6 O-1471

Yours very truly

ATTORNEY GENERAL OF TEXAS

By a/LloydArmstrong LLoyd Armstrong Assistant LA:AW:wc

APPROVED OCT 14, 

### 1939 a/Robert E. Kepke (Acting)ATTORNEY GENERAL OF TEXAS

APPROVED Opinion CommitteeBy s/BP Chairman