Case Information
*1 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 or Examiner8 employed by tes 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 exper- While the Texas.law deals- 0nly~t~0 ci~3ses 0r Examlners, Assistant nates and Senior, the appropriatioa bill 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 *2 Hon. Waltsr C. Woodward, Page 8 ear; Senior ?Zxauiiners, 8alary not to smeed S,ISO.OO per ear; and ,Senior Bxawiners), salary B
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 a$3ill Bo. 397, and the letter irow the of t3s.n Superifi ehdent of' Insursnoe or New York, and if the Comptroller 1s authorized to issue warrant on this basi8.v
We quote rr0i8 a copy ei a Letter rmm Hon. Louis H. Pink, Superintendent Or~Iusurame of Wew York whioh was enclosed with your inquiry, as lo&lows:.
*In the Bepartwent them are fourgrades examiners, ely, Junlor,,Assistant, 8enior and Prlnclpal. e rirst three groups do sub- -th
stantially all of the actual exawinatlon work. The latter or uprlnolpaln group 1s composed 0r chiefs or the various bureaus, namely, Chief or the'Plre& Warlne Bureau; Chief or the zire Bureau, Chief of the Mlsosllaneous Bureau, sto.
Eaoh of the groups has a wlnlwuw and waxilatnn salary. Upon entrance to a grade an examiner is paid the minimum salary thereof and then by the process of yearly lnarementa reaches the maximum where he remains until his prmotion to the next higher grade. Appointments to the Junior grade are wade as a result of open compe- titive examinations whereas promotions to grades higher than Juulcrresult from promotion examlna- tlons aonflned to eligible men nithln the dspart- ment. The minimum and mariwrm salaries for eaoh g:rade rOu0w:
"Grade
Junior
Assistant
Senior
Prlnclipal
xon.tmltmr c.waodward, Page B
*With reference to the speclrla lnquiiy you sake, our charges to the aompanlee exawin- ed so far as safariem are concerned, is on the basis or 1/2SOth of~the exsqlnnsr*s annual saIaxy times the nus&er or daya required ror the emm- inati~n.
we also charge for traveling and eubsia- tenoe expenses which are I&sited by rules of the State Comptroller, copy or whloh is enclosed.
To these oharges is added 20$ of.the amount 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.&cl of 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 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 domes- tic 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 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 considera- tion 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 *4 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 ex- penses 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 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 disbursements ana no more.
*In case en exsminationor a ocmpany not organized under the laws of Texas, whether such exmmlnation Is made by the Texas authori- ties alone, or jointly with the Insurance super- visory 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 presenta- tion of itemizea written statement by the Chalr- man, and shall consist of the examlnersV remun- eration ana expenses, and the other expenses of the Department of Insurance properly allocable to the examination; Payment shall be made dlreat- ly 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
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 bal- anoe, If any, to remain in the Insuranoe Xx- 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 examination to persons aonduoting the examination of 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.and expense allew- anoe 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 oonneo- tion with all such examinations required by l&w.
Hon. Walter C. Woodward, Page t3
Suah examiners and assistants shall aa direot- 6d 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 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 supervision of the Insurance Depart- ment 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 Com- missioners 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 fix- ed 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 ap- proved 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 ex- miner or employee of the Department, or any other person, to conduct or assist in theex- amination 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 *7 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 any account whatsoever."
Senate Bill No. 397, supra, provides tlmt ex- aminers 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 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'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 1 280 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