Ikmorahle 0. P. Lockhart, Chairman
Board of Insuranoe Uasmissionsrs
Austin, Texas

Dear Sir:                            Opinion No. 0-4289
                                     Rer May the Life Insuranae Cumnis-
                                     sioner and Chairman lawfullymake
                                     trips to foreign states to axamine
                                     into the affairs of oertain foreign
                                     life insurance canpsniss, etc., rather
                                     than send a designated actuary, ex-
                                     sminsr or other person, and rslated
                                     questions?

           Your letter dated Marsh 19, 1942, requesting an opinion of
this deparbaent,reads as follows:

                "A partioular oooasion has arise in which the Life
            Insuranoe Conmissioner (or officio Chairman of the Board
            of Insuranoe Commissioners) finds it more expedient to
            go in person to foreign states for the purpose of sxsmin-
            ing into the affairs of certain foreign life insuranae
            campanise, having oertifioates of authority from this
            Board ix conduot lifd'insuranoe business in Texas, than
            to designate the Aotuary, or any examiner or other person
            to mske.suoh a trip, examinations and investigations
            for him.

                  "In oonnedionwith this and a9y similar occasional
             situation whioh may arise while the laws remain as they
            are, ws desire your opinion upon the following points8

            sl. Uay    the Life Insurance Ccmmissioner a.& Chairman
            lawfully   make.suoh.trips, examinations and investiga-
            tf,onsin   person, rather than through a designated
            Actuary,   examiner or other person?

            "2. In ths event of an affirmative answsr to Number 1,
            must he do so only in his oapaoity as Life Insurance
            Camrmisslonerand Chairman of the Board or may he, for
            the duration of such trip, as ars our sxaminsrs, rsmwe
            himself'frcsathe payroll of the Cmsnission as Life
            Iasuranos Ccmusissionerand Chairman (thus allowing the
            Chief Clerk to ssrvs as Acting Life Insuranus Ccnmais-
            sionsr and Chairman during his absence) and make the
            trip, examination and investigation in the capacity
            of examiner, designated for suoh purpose by himself
            as Chairman of the Board?
Hon. 0. P. Lockhart, page 2 (O-4289)




            “3.  In making such trip either in his capacity as
            Life Insurance Ccsmuissionerand Chainsan or in a
            capacity as examiner designated by himself for such
            purpose, would he necessarily be limited to his
            statutory compensation of $8000 per year as Ccmmis-
            sioner and Chairmpn (#20 per diem onthe basis of
            300 working days per year, or $l6.43 per diem on the
            basis of 565 days per year), plus the $4 per day max-
            isssntravel expense allowed by the present annual
            departmental approprialion bill (88 423, Act 1941,
            47th Leg., Reg. Sess.), or would it be permissible
            for him under the retaliatory provisions of the statutes
            hereinafter oited to charge the Examination Fund, to be
            reimbursed by the examined foreign companies, with the
            larger per diem compensationand travel expense allow-
            ance permissible under such retaliatory provisions and
            required bythe laws of the home states of such exemin-
            ed foreign companies to be charged for examinations of
            Texas companies by examiners farm their states?
             II. . . "

            Article 4690, Vernon's Annotated Revised Statutes, reads as
followsr

                 "The Chairman of the Board of Insurance Covmission-
            em s.hs.11,once in each tvo years or oftener if he detrms
            neoessary, in person or by'one or more examtiers commis-
            sioned by him in writin!, visit each oanpany organiced
            under the lawa of this tate and examine its finanoial
            condition and its ability to meet its liabilities, as well
            its oanplianoe with the laws of Texas affecting the ccn-
            duct of its businesst and he may similarly in person or
            by one or more commissioned examiners, visit and examine,
            either alone or jointly with the representatives of the
            insurance supervising departments of other states, each
            insurance company not organized under the laws ofthis
            State but authorized to conduct business in this &ate."

             Article 4691 of the Revised Statutes reads as follows:

                  *The Board of Insursnce Commissioners for the pur-
             pose of examination authorized by law, has power either
             inprson or by cplcor more examiners by him oommissioned
             is writing; . . .

                  "(3) To visit at its prinoipal office, wherever sit-
             uated, eny insurance company doing business in this State
    .   .   -



Hon. 0. P. Lookhart, Page S (O-4289)



                for the purpose of investigating its affairs and
                aonditions, . . . .~.

                     "The reasonable expenses of all such examina-
                tions.shall bs plid by the company examined."

             In our opinion, question nmber 1 should bc answered in the
affirmative. The statutes above quoted, wc think, authorize the Chaiwan
of the Board of Insurance Ccanmissionersto make the examinations of oom-
panies writing insurance, either in person or by his duly appointed em-
aminers, regardless of whethsr the company is a domestic or a foreign
corporation.

             Answering question number 2, the Chairman of the Board of
Insurance Connnissioners,if he sakes the examination, does so as MS..
sioner, and not as an appointed examiner.

                Article 4690a.#.of the Revised Statutes,.reads:
                      I‘
                       . . . In case of an examination of the company
                snot organized under the laws'of Texas, whether such
                 examination is made by the Te5za.s authorities alone,
                 or jointly tith the insurenoe supervisory authorities
                ~of-,another~
                            state or states,-the expenses of such emam-
                 ination due tc Texas*.participation therein shall be
                 borne by-the compaqy'under examination. Payment of
                 such oosts shall bs made by the oompany upon presenta-
                 tion of itemiaed writtenstatement bythe Chairman, and
                 sha.ll,oonsistof the examiner's rcrmunerationand expense,
                 and the other expenses of the:Department of Insurance
                 properly allooable to the examination. Payment shall
                 be made dire&ly to the Chairman, and all,money collected
                 by assessment of foreign oompanies,for the cost of exsmin-
                 ation shall.be deposited inthe state treasury bythe
                 Chairman to the credit of the insurance examination fund
                 out of which shall be paid, by a warrant of the state
                 Comptroller -of Pubiic Aaioounts on voucher of the Chairman
                 of.the Board of Insuranoe Cozmaissioners,the examiner's
                 rcmunerationand~expenses in the amounts determined by
                 the methods hereinafter provided,rPlenverified by their
                 affidavit and approved by-the Chairman; . .~. exeminer~s
                 remuneration and expenses shall be the'same as that which
                wouldbe paid by the haae~state of the company under ex-
                 amination to ,prsons conducting the examination of a
                 Texas company admitted to do business in that state."

                Article 4690b provides:

                     “The Chairman~of the Board oftInshrsnce armmission-
                ers,shsll appoint suoh number of examiners'. . . as he may
                ~Jeemnewssary forthe purpose of making on behalf of the
Hon. 0.   Fe Lookhart,   Page   4 (O-4289)




                state and of the Eoard of Insuranoe Ccamissioaers all
                suoh exeminations of Insurance companies, at the ex-
                pense of such companies or corporations, as are requir-
                ed to be made or provided for by law."

             The Appropriation Bill passed in 1941, pages 1184-1188 of the
Acts of the 47th Legislature, appropriated $6,CCO.CC our of the General
hevenue &nd to pay the salary of the Life Ins-ce     'hmissioner and Chair-
-n of the Board. It also appropriated certain fixed amounts fir the exm-
iners that may be appointed by the aairman of the Board Of ~surenoe Can-
missioners.

              Under the statutes hereinbefore quoted, a life insurance ocmp-
pany is required'to pay the expenses of the examinationwhen aada. It in-
cludes the'examiner's remneration, together with all of.the expenses inoi-
dent to said particular examination. If the examination is made by the
Qlai+xan of the Board of Cxmsissioners himself, there would not be any
examiner's remunerationto be charged, since the Chairman of the Board
would be acting under the powers given him .bythe Legislature tomake the
examination in person. The only expense'that could be charged against the
ompauy examined by him would be his expenses, together with any other
expenses Of the k+I%aent Of Insurance properly allocable to suoh ems&n-
ation. The Chairman of the Board of Insurance Cmmissioners is limited to,
end   Mot drawmore thanthe $6,000.00 per annm salary appropriated by
the fl gislature.

             By question nuder 3 you ask what expenses the Chairman of
the Board of Life fnsuranoe Commissioners could charge if he &es 5.ufact.
exmine a foreign corporation.

               Under the provisions of &tioles 4690a and 4891, above quoted,
the  actual expenses incurred in the examination of a foreign i&umnoe     c~S
pany is to be PaId by the oonpany examined. As ws interpret said Articles,
it Is imaterial~whether the examination is made 9 the Chairman of the
.lkard of Insur&oe Ccmaissioners, or made by one of theeceminers appointed
by him. The actual and neoessary expenses incurred are to be paid bythe
 company examined, and when paid, same are to be deposited in the State
treasury, and then the actual expenses inourred by the party or parties
who in faot made the examination are to be paid toraid party or parties
 on warrants drawn on the &ate Treasurer.      The expression used in the
wuoted protion of &ticle 4690a above, that the cost of examination shall
 consist of “the examiner’s remuneration and expenses,and the other expsn-
 sea of the Dsparbnent" means the expenses of the party who makes the exam-
 ination, and if the Olaiman of the Board makes the examination, his
actual expeiisesshould be paid by the examined company. 8aid Article 4690a
 provides that, %xaminers~ remuneration and (all) expenses shall be the
 ssme as that which would be paid by the home state of the company under
examination to persons conducting the exsminations by the Texas ccmpany.a
This statute-&~~at         theexpense paid is the same as would be requir-
ed under examination - to persons conducting the examination. If the
       _.   -




Hon. 0. P. lockhart, page 5(0-4289)




Commissioner himself examines a domestio company, the company would be
required to pay his actual expenses. In other words, it is not the ex-
penses of the examiners as distinguished fras the Ccaucissionerhimself
when he makes the examination, tit it refers to and is intended to cov-
erthe expenses of whoever makes the examination, and whatever amount
of actual expense is incurred bythe party making the examination. All
expense money, under the law, when collected, is paid to the Chairman
of the Ebsrd of Insurance Commissioners,and he is required to deposit
it in the State treasury. The actual expense of the party who made the
examination is then paid to him "by warrant of the State Comptroller of
Public Acoounts on voucher ofthe aairman of the Board of Insurance
&mmissioners." If the Commissioner himself made the examination, he
would end will-be entitled to the actual expenses he incurred end oollleot-
ed frosthe company he examined. Under the law, when he collects this
expense money, he should deposit the same in the State treasury, and
then issue to himself a voucher for his said expenses, and obtain a
warrant from the Comptroller against said fund. By this method the Stats
can keep a check on the amount collected by the Cammissioner as epenses,
whether it be for examining a domestio or a foreign company.

                                          Very truly yours

                                      ATTOBXEY   GENERAL OF TEXAS


                                      %       Gee.
                                                _ IL Barous
                                               --.

                                               Gee. PT.Birous
                                                     Assistant




APTROVED DJL 28, '1942
/s/Gerald C. Mann
ATTORSSYGWERALOFTEXAS

This opiaion considered and approved in limited conference.
