                                                                    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: 'Isthe 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 exper-
                         While the Texas.law deals-
    nates 0nly~t~0 ci~3ses  0r Examlners, Assistant
    and Senior, the appropriatioabill provides for
    three classes so far as the rate 0r pay is eon-
    warned. These three classes are: Assistant
    Examiners, a&lary not to exceed (t&,520.00 per
Hon.    Waltsr   C.   Woodward,Page 8


         ear; Senior ?Zxauiiners, 8alary not to smeed
        BS,ISO.OO per ear; and ,SeniorBxawiners),   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'pleaseadvise this otiioe and the
        Comptroller% offlae if the rate of pay appl%ed
        to Mr. 8agderrordis aorreut under the provisi~nrr
        of t3s.n a$3ill Bo. 397, and the letter irow the
        Superifi
               3 ehdent of'Insursnoe or New York, and if
        the Comptroller1s authorized to issue warrant
        on this basi8.v
          We quote rr0i8a copy ei a Letter rmm Hon. Louis
H. Pink, SuperintendentOr~Iusurame of Wew York whioh was
enclosed with your inquiry, as lo&lows:.
             *In the Bepartwentthem are fourgrades
       or examiners,    ely, Junlor,,Assistant,8enior
                   -th e rirst three groups do sub-
       and Prlnclpal.
       stantiallyall of the actual exawinatlonwork.
       The latter or uprlnolpalngroup 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. Appointments to the
       Junior grade are wade as a result of open compe-
       titive examinationswhereas promotions to grades
       higher than Juulcrresultfrom promotion examlna-
       tlons aonflned to eligible men nithln the dspart-
       ment. The minimum and mariwrm salaries for eaoh
       g:raderOu0w:
        "Grade
       Junior
       Assistant
       Senior
       Prlnclipal
xon.tmltmr c.waodward, Page B


          *With reference to the speclrla lnquiiy
     you sake, our charges to the aompanlee exawin-
     ed so far as safariem are concerned, is on the
     basis or 1/2SOth of~the exsqlnnsr*sannual saIaxy
     times the nus&er or daya required ror the emm-
     inati~n.
         we also charge for traveling and eubsia-
    tenoe expenseswhich are I&sited by rules of the
    State Comptroller,copy or whloh is enclosed.
    To these oharges is added 20$ of.the amount charg-
    ed ror the salaries of exawinere,which added
    per cent is for the analytical and supervisory
    functions of the chief or *principal"examiner.w
          Senate Bill No. 391, A.&clof the Regular Seasion~
of the46th Legislature,amending Articles 4690a and 409Ob,
revised civil Statutes, reads ae follows:
         T3eoti6n 5. The expenses or all examina-
    tions 0r domedi insuranoe~ooqp~ibe made on
    behalf ot the State of Texas by the Chalrmn
    of the Board of InsuranceComaisslonersor under
    his authority shsll be paid by the corporations
    examined la such amount as the Chairman of the
    Board 0r InsuranceCommleeioneraShall certify
    to be Just and reasonable.
         wAssessmentsfor the expenses of-suuh domes-
    tic examination,which shall be sufficientto
    meet alf the expenses and disbursementsnecessary
    to comply with the provleioneof the laws or Texas
    relotinc:to thy examinationor insurance comj%niee
    and to aomply veiththe provisions of this Act,
    shall be made by the Chairman or the Board of
    Insurance@omnissionersupon the corporationsor
    associationsto be examinea takin into considera-
    tion annual prmnlum receipts, and7or admitted
    assets and/or insurance in force; provided suah
    assessmentsshall be made and collected only at
    the time such examinationsare wade.
         *'$.ll
              sums collectedby 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%das hereinaboveprovided ror s&ll
    ,bepaid into the State Treasury to the credit
    of the InsuranceExaminationFundg and the
    salaries and expenses of the actuary of the
    Board or Insurence Oonmisaionersand or,the
    examinersand assistants,and all other ex-
    penses or such examlnatlons,'shall be paid
    upon the certlficcteof the chairman or the
    Board of InsuranceCommlaslonereby warrant
    of the Comptrollerdrawn upon auuh fund In
    the State masury.
          "It atany time it shall appear that
    addition pro-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 sur-
    plus 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
    disbursementsana no more.
         *In case or en exsminationor a ocmpany
    not organized under the laws of Texas, whether
    such exmmlnationIs made by the Texas authori-
    ties alone, or jointlywith the Insurance super-
    visory authoritiesof another state or states,
    the expenses of suah examinationdue to Texas*
    participationtherein, shall be borne by the
    company under examination. Payment or such
    cost shall be made by the company upon presenta-
    tion of itemizeawritten statement by the Chalr-
    man, and shall consist of the examlnersVremun-
    eration ana expenses, and the other expenses
    of the Departmentof Insurance properly allocable
    to the examination; Payment shall be made dlreat-
    ly to the Chairman,ana all money collected by
    assessmentson fore@ companies rOT the cost
    of examinationshall be deposited ln the Stats
    Treasury by the Chairman to the credit of the
                                                      848

                                                       1’


Hon. Walter C. Woodward, Page 5


    InsuranoeExamination 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 determinedby the method hereinafter
    provided,when verified by their affidavit end
    approved by the ChaIrman; end mid money is
    hereby appropriatedfor that purpose, the bal-
    anoe, If any, to remain in the InsuranoeXx-
    amination 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 examinationto persons aonduotingthe
    examinationof a Texas company admitted to do
    business in'that State. If there be no reoog-
    nized charge ror suoh servioe, the Chairman
    shall fix the remuneretion.andexpense allew-
    anoe of the examiners at suoh reasonablefigure
    as he may determlne.
    *Seoticn 2.
         93eation 3aa: The Chairman of the Board
    of Insuranoe Commissionersshall appoint suoh
    number of exsminers, one of whom shall be the
    chief examiner,and suoh number of assistant8
    as he may iieemneces::aryfor the purpose of
    making on behalf of the State of Texas and of
    the Board of Insurance Commissionersall suah
    examinationsof 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
    .InsuranoeCommissionersto advise the Board in
    oonneatlonwith the performance of its duties
    and for aid and adviae and aounsel in oonneo-
    tion with all such examinationsrequired by l&w.
Hon. Walter C. Woodward, Page t3


     Suah examinersand assistants shall aa direot-
     6d by the Chainnan   or   the Board   of   inamanoo
    Commissioners,perform all the duties relative
    to all examinationsprovided by law.to be made
    by the Board of InsuranoeCommisslonereof the
    State of Texas, and it is the purpose of this
    Act to provide Zor the examinationhereunder
    by the Chairman of the Ward of Inouranoe Dar-
    missioners 0r all corporQtions,rirms or pssc
    sons engaged in the business of writInS 3.nsur-
    ante of any kind in this State whether now sub-
    jeot to the supervisionof the Insurance Depart-
    ment or not.
         "All suoh examiners and assistantsand sueb
    actuary shall hold office subject to the will
    of the Chalrm$n of the Soard of Insuranoe Com-
    missioners anclthe number of such examinerssnd
    assistantsmay be increased or decreasedfrom
    time to time to suit the needs of the examining
    work. The actuary and all such examinersand
    .assistantsshall be paid out of the Insurance
    ExaminationFund, such salaries as shall be fix-
    ed 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 ap-
    proved by the ClUirplanof the Board of Insurance
    Commissionersbeforapayment.
         Vhere the Chairman of the Board shall deem
    it advisable he may commission the actuary of
    the %arc?, the chief examiner, or any other ex-
    miner or employee of the Department,or any
    other person, to conduct or assist in theex-
    amination of any company not organizedunder the
    laws of Texas and allow them oozpensationas
    herein provided, except that they~~maynot be
    cthexwise compensatedduringthe time they are
    assiqned to such foreign company examinations.
    Other than as thus provided, neither the actuary
    of the Poard of Insurance Commissionersnor 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 lndireotlyaccept from any
     insuranceoompany ady qployment or pay or
     compensationor gratuity on account or any
     servioe rendered or to be rendered or any
     account whatsoever."
          Senate Bill No. 397, supra, provides tlmt ex-
aminers representingthe state of Texas in examination
of companies outside of tho state of Texas shall reoeive
remunerationand expenses the same as shall be Bald by
the home state of a oompany under examinationto 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 remunerationend expense allamnce of the exam&&-
ers at such reasonablefigure as he may determine.
          Aocording to the inrormtion contalnadj.nthe
letter of the Hon. Iouis 11.?ink, Superintendentof Insur-
alyle,above quoted, aharges made 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
subsistenceexpenses 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 analyticaland supervisoryrunctiom of
the chief OF princigpa examiner. Under this.formula
char es made to comphnics examined should be on the basis
of 17280 of the examiner*8 annual salary times the number
of days req,uiredfor the examinationplus travelingand
subsistenceexpenses plus twenty per cent of these Charges.
In submittingyour 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 respeotfullyadvised that it is the
opinion of this department that the rate of pay applied
to Kr. Sanderford is not 'correctunder the provision of
Senate Bill No. 397 and the letter from the Superintendent
of Insurance of New York and that the Comptrolleris not
                    warrant8 onthis basis. You are further
authorized to @s.sue,
                                                        -:
                                                             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 Superintendentof
Inswanae of IlawYork should be on the basis of l/?BO
of the examlner*s,annualsalary which is $4,200.00
per year tlmes the number of days required for the
sxslninatlonplus traveling and 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?ALOF TliXAh




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