Untitled Texas Attorney General Opinion ( 1957 )

THEATITORNEY GENERAL
OFTEXAS
WILL WILSON
AlTGRNEYGENERAL June 18, 1957
State Board of Insurance Opinion No. NW-166r
Aurtin, toxar
Ra: Certain question8 concrraing
the Commfasionrr of Inauranci
na provided for in 8moto bill
Gentleach? 222.
You have requested the opinion of this office aa to
the rifrct of Ssnots Bill 222? which is an Act aoeading the
Toxar Inrurahcr Code lap, creating a State Board of Imsuraace
and the sew official.posftlon OS Comxlssionsr of Insurance,
rhioh law becam effective June 12, 1957. Your request is in
port a8 follows:
“Senate Bill 222, as parsed by the 59th Leg-
irlaturo~ oi thr Stab of Texas and which will be-
come effr’ctive today, June 12, 1957, rovides for
a ‘State Board of Insurance end for a EorPmissibner
of Insurance * Article 1.09 of the Taras Imsurance
Code i as axended by 8enate Bill 222, re uires that
the State Board oi Insurance appoint a ! omissioner
of Ihsurance who shall be the chlrf exectit?rs axid
administratlve officer of the Boaxd, and who shall
be charged with the primary responsibility of ad-
ministering, enforcing, and carryiag out tbo 9rovi-
sions of the Insurance Code. Beaatr Bill 222 pro-
vides further that the Couirrioaer rhall hold hi8
position at the pleasure of the Board and may be
discharged at any time.
Vonate Bill 222 does not appropriatr any
funds to pay the ralary or compensatioa for such
Cou``ir~ionrr of Insurahce 0 The A99ropriation Bill
passed by the 55th Legislature provides for the
salary,or a Commfrsfonor ot Insurance9 but this Act
does not become effective until Scpttmber i, 1957.
The-Appropriation Bill now in effect does not have
any appropriation for such Commisslonrr of Insur-
ance, but doe’s 9rovidr a lump sum appropriation for
certain salaries. This ,appropriation in the pres-
ent Bill has a s,uificient bal,ancs to yay s Commfs-
sfoner of Insurance at a mo~i.hly rate of $20,000.00
per year for the balance of this biennfum.~
:
Stats Board of Insurance, page 2 OIW-166)
“From a reading of Senate Bill 222, it is
QParent that certain specific duties, responsi-
bilities and authorities are placed upon the
Commissioner of Insurance and upon the State
Board of Insurance, with a definite line of su-
thority and responsibility drawn between the
Commissioner and the Board. In visw of all these
facts we m39SCtfUllY ask your opinion on tha fol-
lowing questionst
“1. Can the insurance laws of this 8tate be ad-
ministered by this Board without a Commissioner
of Insurance in view of the provisions of Senate
Bi~ll 2229
“2. Is this Board authorized to pay a Commls-
sioner of Insurance out of the lump sum appropria-
tion, for salaries in the current Appropriation
Bill?
“3. May a pre88nt employee of this Board be ap-
pointed and act as Commissioner of Insurance under
the provisions of geenate Bill 222 and draw a sal-
ary from one of ttre appropriated items such as
actuary or chief clerk in the present 4pprogriation
Bill?
“4. May the present Board appoint aa acting Com-
missioner of Insurance, so that the ‘new State Board
of Insurance that is to be appointed by the Gover-
nor may have the right and duty to appoint a Com-
missioner of Insurance? If your an8wer ir ‘yes, may
this acting Coami88iOaSr oi Insurance receive any
compensation or salary for his sertices from the
Stab of Texas?
85. If the present Board cennot appoint an acting
Commissioner of Insurance and must appoint a Com-
missioner of Insurance to carry out the funotions
designated to him under Senate Bill 222, can the
new Board to be appointed by the Governor remove him
without cause and if not, what will be the term of
his office? This westion is asked in view of the
provisions of krticle XQX, Sections 38 and 30, and
because Senate Bill 222 requires the Commissioner OI
;;s;L$;y”to be confirmed by the Senate of the State
State Board of Insurance, page 3 (W-166)
The five questions propounded will be discussed and answered
seriatim.
1. Can the insurance laws of this 8tate be r&in-
isterrd by this Board without a Commissioner of Insuraaae in
view or the provisions of Senate Bill 2229
Article 1.02(b) or the Texas Insurarke Code,-a8
_’ amended b sec. 2, S.B. 222, provides that:
DOWB~S.rm,
Witleg heretofore vested in and devolving upon
the Board or Insurance Commissioners as hereto-
fore constituted under rlor statutes; the Chelr-
mah or said Board; the Eife Insurance Commissiciner;
the Fire Insurance Commissioner, an4 the Casualty
Insurance Commissioner shall hereafter be vested
in the State Board of Insurance as a body, an4
except as provided herein, they &j&l be ex~&sA,
ate an4 the
rules an4 reguiations ror unirorm application made
by themBoard and &&jgct to the s-n of t&g
4cl8a The duties of the &ate Board of Insurance
shall be primarily in a supervisory capacity an4
the carrying out and administering the details of
the Insurance Code shall be primarily the duty, an4
responsibility of the Commissioner Of Insurance
acting un4er tha supervision of the Board.”
Article 1.04(b) or the Code, as amended, provides:
“The State Board of Insurance shall determine
r)ollcy, u, g&gq and w but otherwise it
shall execute its duties through the Commissioner
of Insurance as herein provide4 ror, in accordance
with the laws of this State and the rules and regu-
lations for unirorm application a8 made by the
Board.”
Article 1.09(a) of the Code, as amended, protides
that I
* Emphases throughout are supplied.
,’
State Board of Insurance, page 4 (WW-166)
“The Board shall appoint a Commissioner of
Insurance by and with the advice and consent of
the Senate of Texas who shall be its chief exe-
cutive and administrative ofrlcer, who shall be
charge4 with the primary responsibility of ad-
ministering, enforcing and carrying out the pro-
visions of the Insurance Code under the supervi-
sion of the Board.”
&ticle 1.09(b) provides that the Commissioner of
Insurance shall be the State Fire Marshal and shall function
as such subject to the rules and regulations of the Board,
and Article 1.09(g) provides that the Commissioner of Insur-
ance shall appoint such deputies, assistants, and other ~per-
sonnel as are necessary to carry out the duties and functions
devolving upon him and the State Board of Insurance under the
Insurance Code of this State, subject to authorization by the
Legislature in its appropriation bills or otherwise, and to
the rules of the Board.
The wording of the foregoing articles of the Insur-
ance Code, as amended, are clear and unambiguous. They speci-
fically state that the State Board of Insurance shall act on1
in a supervisory capacity. (See Art. 1.02(b) and Art. l.O9(a 7 1.
The legislative intent is clear that all of the pow-
ers, functions, authorities, prerogatives, duties, obligations,
and responsibilities which have heretofore been vested in the
Board of Insurance Commissioners and the individual Comds-
sioner members thereof, are now vested in the new Board, but
such powers, duties, and responsibilities, etc., when so vested,
“shall be exercised, performed, carried out, an4 administered
by the Commissioner of Insurance as the chief 6X6CUtiVe and
administrative officer of the Board, subject to the superVisiOn
of the Board.” The legislative intent is again manifested by
the restatement of the functions of the State Board of Insur-
ance and the Commissioner of Insurance contained in the last
sentence of Article 1.02(b) and in the first sentence of Article
l.O9(a3.
The legislative intent is restated in Article 1.04(b)
which restricts the functions of the Board to the determin~ation
of policy, the making of rules, rixing of rates, and hearing of
appeals from rulings and actions of the Commissioner of Insur-
ance as provided in Article look(d). Afterrestricting the pri-
mar functions of the Board to those just enumerated, Article
1.0 c (b) further provides that the Board shall execute its duties
through the Commissioner of Insurance.
State Board of Insurance, page 5 (W-166)
In summary, S.B. 222 provides that all of the powers,
duties, obligations, and responsibilities which have been here-
tofore vested in and exercised by the State Board of Insurance
Commissioners under the authority of Article XVI, Section 38,
of the Constitution of Texas and subsequent legislative acts,
are now vested in the State Board of Insurance, but with the
exception of the powers of determining policy, making rules, fix-
ing rates and hearing appeals, the Legislature has specifically
delegated to the Commissioner of Insurance the primary power’and
authority to exercise, perform, carry out, and administer such’
powers and duties which were formerly exercised and performed by
the Board of Insurance Commissioners, acting as a whole, or by
the individual Commissioner members thereof.
The answer to your Question No. 1 is vNo”.
2. Is the Board authorized to pay a Commissioner of
Insurance out of the lump sum appropriation for salaries in the
current Appropriation Bill?
Your request states that the Appropriation Bill now in
effect does not have any appropriation for payment of a salary
of a Commissioner of Insurance, although such appropriation is
provided for in the Appropriation Bill which becomes effective
Sepatember 1, 1957. You advise that the present Appropriation
Bill does provide a lump sum appropriation for certain salaries
and that this fund has a sufficient balance to pay the salary o f
a Commissioner of Insurance at the rate of $2O,COO.O0 per year
If it can be used for this purpose.
We are advised that the lump sum appropriation refer-
red to in your request is Item No. 67 in the present Appropria-
tion Bill (Acts 54th Leg., 1955, Ch. 519, Art. III, p. 1465).
This item appropriates from the Insurance Examiners Fund (No.
54) $75,000.00 for the payment of salaries, wages, traveling ex-
penses, and all supplemental expenses connected with the exami-
nation of insurance companies in Texas. This is a special fund
created out of the moneys received from various insurers to re-
imburse the Board of Insurance Commissioners for the salaries
and traveling expenses incurred by the Board’s examiners in the
performance of their required duties in the examination of, the
affairs of such insurers. (Art. 1.16, Texas Insurance Code).
The Legislature, in appropriating from this fund the
sum of $75,000.00 for each year of the biennium, did so for the
purpose of paying the salaries, wages, traveling expenses and
all supplementary expenses connected with the examination of the
:
‘State Board of Insurance, page 6 (WW-166)
insurance companies in Texas an4 for no other purpose; and
such fund, or any part thereof, may not be used for the pay-
ment of any mother items than those specifically named therein.
It was the intention OS the Legislature that the sum so appro-
priated should be paid only to employees connected with the
examination of such insurers and not to State officers. (Art.
1.16, Texas Insurance Code).
Manifestly, the payment or the salary or a Commis-
sioner of Insurance was not contemplated by the Legislature when
it enacted the Appropriation Bill presently in errect since, at
that time, there was no office of Commissioner of Insurance au-
thorized by law. Article 1.09(e) provides that the Compensation
to be paid the Commissioner of Insurance shall be such sum as is
provided for by the appropriation acts, and there is no provi-
sion for the payment of the salary of a Commissioner of Insur-
ance contained in the Appropriation Bill now in errect. We do
not pass upon the legality of any future appropriation by any
ruture Legislature for the payment for servloes rendered by a
Commissioner of Insurance from the date of his appointment up to
August 31,, 1957.
The answer to your second question is Vo.”
3. hay a present employee of this Boar4 be appointed
and act as, Commisslonrr of Insurance under the provisions of
Senate Bill 222 and draw a salary rrom one of the appropriated
items such as actuary or chier clerk in the present Appropriation
Bill?
Article 1.09(a) provider that the Boar4 shall appoint
a Commissioner of Insurance by an4 with the advice and consent
of the Senate of Texas. Inasmuch as the appointment of the 60~
missioner of Insurance by the Board specifically requires con-
firmation by the Senate, and in view of the many responsibili-
ties and duties placed on him by S.B. 222, the office of Commis-
sioner of Insurance is one of honor and trust, although it is
not an office of profit or emolument at since no funds
have been appropriated by the Legislature from which his salary
can be paid. While the position of a chief clerk or actuary
presently employed by the Board who receives his salary under the
present Appropriation Bill is not that of a public officer, nev-
ertheless it is a position of emolument or profit.
Article XVI, Section 33, of the Constitution of Texas
provides in part as follows:
“The accounting officers of this State shall
neither draw nor pay a warrant upon the Treasury
.
State Boar4 of Insurance, page 7 W-166)
in ravor or any person ror salaries or compen-
sation as agent, officer, or appointee who holds
at the same time any other office or position or
honor, trust, or profit, under this State. . . .I1
The opinions of various Attorneys General have con-
sistently held that where a person is appointed to an office
of honor or trust, with or without emolument or profit, who,
at the same time, holds a posit ion of emolument or profit un-
der the State government, such psrson cannot receive payfor
either orrice or position. See OpinionNo, O-1101 by Hon.
Gerald C. Mann to Hon. Geo. H. Sheppard, State Comptroller, ap-
proved July 31,,1939, and Ogin+on No. O-5123 by Hon. Gerald C.-
Mann to Hon. Gee. H. Sheppard, State Comptroller, approve4 March
17, 1943.
The answer to your third question is, eNo.n
4. May the present Board appoint an acting Commis-
sioner of Insurance, so that the new State Board of Insurance
that Is to be appointed by the Governor may have the rigtit an4~
duty to appoint a Commissioner of Insurance? If your answer is
yes, may this acting Commissioner of Insurance receive ang Com-
pensation or salary for his services from the State ‘of Texas?
5. If the present Board cannot appoint an acting Com-
missioner of Insurance and must appoint a Commissioner of Insur-
ance to carry out the functions designated to him under Senate
Bill 222, can the new Board to be appointed by the Governor re-
move him without cause and if not, what will be the term of his
office? This question is asked in view of the provisions of
Article XVI Sections 38 and 30, and because Senate Bill 222 re-
quires the &ommissioner of Insurance to be confirmed by the Sen-
ate of t’he State of Texas.
Article 1.03(a) provides that the members of the State
Board of Insurance Commissioners in office immediately prior to
the effective date of S.B. 222, shall serve as interim members
of the State Board of Insurance until the appointment and quali-
fication of the members of the Board under the provisions of
Articles 1.02 and 1.03. Since the Legislature has specifIcally
designated that all the powers, functions, duties and respoasi-
bilities of the present Board have been vested in the new Boar4
by the provisions of Article 1.02(b), the interim Board has the
authority to appoint a’ Commissioner of Insurance.
Article 1.09(a) of the Code, as amended, provides that
the Board shall appoint a Commissioner of Insurance by and with
State Board of Insurance, page 8 W-166)
the advice and consent of the Senate of Texas, who shall hold
his position at the pleasure of the Board and may be discharged
at any time. As stated above, the Commissioner of Insurance
functions as the State Fire Marshal, an4 his compensation shall
be such ~6s is provided ror by the Appropriation Acts. The pow-
ers, authority, and duties of the Commissioner of Insurance have
been discussed above in answer to Question No. 1, and he is au-
thorized and empowered to appoint all deputies, assistants, and
other personnel necessary to carry on the duties and functions
devolved upon him and the State Board under the Insurance Code,
subject to the authorization by the Legislature in its appropria-
tion bills, and to the rules and supervision of the Board. (Art.
1.09(g). I/
Since the Legislature has delegated to the Commissioner
of Insurance the right to exercise, with certain exceptions, all
of the powers and duties vested in the Board of Insurance under
the provisions of Article XVI, Section 38, Constitution of Texas,
above enumerated, and since his appointment by the Board is sub-
ject to confirmation by the Senate of Texas, he is a public offi-
cer of the State of Texas within the meaning of Article XV, Sec-
tion 7, of the Constitution of Texas, and must therefore take
the oath of office and give bond as required by Article 1.09(d)
0r the Code, as amended, before entering upon the duties of his
office.
The interim Board has the power to appoint a Commis-
sioner of Insurance but there is no statutory or constitutional
authority or provision which would permit the interim Board to
appoint an acting Commissioner of Insurance. However, since the
Board is given the power to appoint a Commissioner of Insurance
who shall hold his position at the pleasure of the Board, and in
view of the provisions of Article XVI, Section 30, Constitution
of Texas, which is discussed u, the Board may appoint a Com-
missioner of Insurance ror any period of time not to exceed two
years rrom the date or the appointment. Stated differently, the
interim Board may appoint a Commissioner of Insurance for the
period of time which will elapse from the date of his appoint-
ment and the appointment and qualification of a CotnmisSiOn6r Of
Insurance to be appointed by the new State Board of InSUtanC6
when the members thereof are appointed and qualified under the
provisions of Articles 1.02 and 1.03 of the Code, as amended.
However, the Coxmissioner of Insurance so appointed by the in-
terim Board cannot receive any compensation or salary at this
time for his services from the State of Texas during his lncum-
bency up to September 1, 1957, if his tenure of office should be
ror that period.
State Board of Insurance, page 9 (M-166)
The Commissioner, if appointed by the interim Board,
must satisfy all of the requirements for eligibility and quali-
fication enumerated in Articles 1.06 and 1.09(c) of the Code,
as amended, and before entering upon the duties of his o’ffice
the appointee must take the oath of office and give the bond
required by law. After having so qualified, the Commissioner
could immediately assume and execute all the powers, duties,
functions and responsibilities which devolve upon the Commis-
sioner of Insurance under the law, during the term of his tenure
in such office for the period for which he was so appointed.
Article XVI, Section 30, of the Constitution of Texas
provides that “The duration of all offices not fixed by this Con-
stitution shall never exceed two yearsr . . .n The Commissioner
Texas, may not hold such appointment for a period exceeding two
years from the date thereof, at which time he may again be ap-
pointed and the new appointment be subject to confirmation by
the Senate.
Although Article 1.09(a) of the Code, as amended, pro-
vides that the Commissioner of Insurance, after appointment,
“shall hold his position at the pleasure of the Board and may be
discharged at any time,” nevertheless, since he is a State offi-
cer, his removal or discharge from such office nay only be ef-
fected in the manner provided by the Constitution and laws of
Texas.
Article XV, Section 7, of the Constitution of Texas
is as follows:
“The Legislature shall provide by law for the
trial and removal from office of all officers of
this State, the modes for which have not been pro-
vided in this Constitution.”
The Constitution of Texas has not provided for the trial or re-
moval from office of the Commissioner of Insurance appointed by
the Board of Insurance as provided by S.B. 222. However, Arti-
cle 5961, R.C.S., p rovides that all State officers other than
those specifically named therein, shall be removed from office
or position by impeachment in the manner provided by the Consti-
tution and in Title 100, Revised Civil Statutes of Texas.
State Board of Insurance, page 10 (WW-166)
There are no statutory provisions specifically pro-
viding for the removal from office of the Commissioner of fn-
surance other than the proviso in. titicle 1.09(a) of the Code,
as amended that he shall hold his position at the pleasure of
,the State Board of Insurance and may be discharged at any time.
This provision, however, is in direct conflict with the provi-
sions of Article XV, Section 7 of the Constitution which pro-
vides for a V,rial`` of all State officers such as the Commis-
sioner of Insurance, and therefore the constitutional provision
must prevail over the provision contained in S.B. 222. Ppran-
fiald v. State, 123 Tex. 467, 73 S.W.2d 83 (1934); m.
Johnson, alu?ica*
Should the interim Board appoint a Commissioner of
Insurance to hold office for the period from the date of his
appointment until the date of the appointment and qualification
of the new State Board of Insurance and the appointment by the
Board of his successor, he may not be removed from the office
during the term of his appointment except by the process of im-
peachment .
Answering Questions 4 and 5, you are advised that the
interim State oard of Insurance cannot appoint an acting Com-
missioner of I to hold office until his successor is
appointed by t new State Board of Insurance. However, the
interim Board appoint a Commissioner of Insurance to h&d
office until his’ successor is appointed by the new State Board
of Insurance upo the appointment and qualification of the mem-
bers thereof, 4
and,the appointment by the new Board of his suc-
cessor in office. \ Such Commissioner cannot receive at this time
any salary or pay or his services rendered during his tenure in
office up to Septe ber 1 1957. When a Commissioner of Insurance
is appointed by the\new &ate Board of Insurance his term of of-
fice will expire at ‘the end of two years from the date of his ap-
$n;;Et if such appointment has been confirmed by the Senate
A Commissi,oner of Insurance, when appointed, can only
be removid from office by impeachment proceedings as provided by
Article 5961, R.C.S., +n the manner provided in the Constitution
of Texas and Title lOOi Revised Civil Statutes> 1325.
Under the provisions of Senate Bill 222, 55th
Legislature, the State Board of Insurance has the
primary responsiblllty and duty to determine policy,
rules, rates, and appeals, but all other powers,
‘. . . .
State Board of Insurance, page 11 (WW-166)
functions, duties, and responsibilities must be
exercised, performed, carried out and adminis-
tered by the Commissioner of Insurance. The
Commissioner of Insurance may not be paid for
his services out of Item No. 67 of the present
Appropriation Bill, which is an appropriation
for the payment of salaries, wages, travel ex-
pense of employees, and all supplemental ex-
penses connected with the examination of insur-
ance companies in Texas, and there is no appro-
priation available for the payment of a salary to
the Commissioner of Insurance under the present
Appropriation Bill. If a present employee of
the State Board of Insurance is appointed to act
as Commissioner of Insurance, he cannot draw a
salary from any of the appropriated items in
the present Appropriation Bill.
The interim State Board of Insurance cannot
appoint an acting Commissioner of Insurance. The
interim Board can appoint a Commissioner of Insur-
ance and limit his term until the time when a Com-
missioner of Insurance is appointed by the new
State Board of Insurance to be appointed as pro-
vided in Articles 1.02 and 1.03 of the Insurance
Code, as amended, but such Commissioner of Insur-
ance may not receive any compensation or salary
at this time for his services from the State of
Texas from the date of his appointment until SeP-
tember 1, 1957. The Commissioner of Insurance is
a State officer whose term of office will expire
at the end of two ysars from the date of his ap-
pointment if such appointment is confirmed by the
Senate of Texas, and he can only be removed by
impeachment as provided by Article 5961, R.C.S.,
in the manner provided by the Constitution of Texas
and the provisions of Article 100, R.C.S.
Very truly yours,
WILL WILSON
Attorney Gene@ of Texas
-C. K. Richards
CKR:wb Assistant
. . .
State Board of Insurance, page 12 (WW-166)
APPROVED:
OPINION COMMITT&Ei
8. Grady Chandler, Chairman
John Reeves
Houghton Brownlee
James Ludlum
RWIayED FOR THii ATTORNEY
GENEROL
BY: Gee. P. Blackburn