The Saint Paul globe. (St. Paul, Minn.) 1896-1905, 1905-03-12
INSURANCE LAWS
SCORED BY HALLAM
Judge Says Some of Them
Are Meaningless and
Impossible .

Judge Oscar Hallam severely scored
the Minnesota insurance laws in a de-
cision rendered yesterday in the dis
trict court. He declares them to be
badly tangled, and the sections relating
to the deposit of securities with the in
surance commissioner are practically
meaningless and worthless.
The decision in question sustained a
demurrer entered by the defendants
against the bringing of a mandamus
proceeding in the case of the state of
Minnesota on the relation of Hannah
Guidborg, Administrative of the estate
OF Nels Guldborg, deceased, vs. the
Continental Casualty company, a cor
poration.
+ Judge Hallam ordered that the de-
murrer be sustained and the proceed
ings in mandamus dismissed, but in
doing so he took occasion to point out
some weak points in the law involved.
No Securities on Deposit
The suit was brought by Mrs. Guild
borg, whose husband died while insur-
ed in the Continental Casualty COM
pany. A dispute enSued over the set
uement of her claim for insurance
benefits and she secured attorneys to
bring suit. They found that the COM
pany had no securities on deposit in
| a
ment could only be made collectible il
secured in the home state of the COM
pany, Indiana. Desiring to bring the
suit in this state they began proceed
ings In mandamus to force the COM
pany to deposit securities with the
state insurance commissioner. Attor-
neys for the company demurred
Regarding the provisions of the gen
eral laws governing, or purporting to
govern the licensing of outside insur-
ance companies to do business in the
state, Judge Hallam points out a num-
Der OF weaknesses and a general con-
fusion that renders the provision prac-
ttcally meaningless.
According to the law all insurance
companies other than fire, marine, hail,
farmers mutual and real estate title
insurance companies must deposit
$4,000 worth of securities with the
state commissioner of insurance before
they may be permitted to do business
In the state. This 100000 may be
halr In United States, Minnesota state
or municipal bonds of some city in
minnesota, the other half may be in
flrst mortgages on real estate bearing
per cent interest per annum. the
mortgages to be worth, exclusive of
any buildings or other improvements.
the amount of the lien.
Accept Certificates
Another provision, however. allows
the commission to accept in lieu of the
securities a certificate from the insur-
ance commissioner of the home state
or the company to the effect that the
company has upon deposit with him
such quantity of securities.
Constituting this act as it plainly
reads, says the judge, mo foreign in
surance company can qualify under it.
without deposit in this state, because
the proyiso applies only to companies
or another state on which the proyis-
Ions contained in this act are in force
when in fact the provisions i'm law
contained in this act are not in force
IN any other state than Minnesota, and
further because of the requirement. of
certificate of the insurance commits
sioner of the home state that such
company has made its home state the
deposit above described, that is. United
states bonds, stocks or bonds of Min
neSota, or of Minnesota municipalities.
or mortgages on Minnesota real estate,
when 1t is safe TO say that no foreign
company has on deposit in it's own
state any such combination of securi-
ties. SO that literally construed the
proviso is meaningless.
Unsafe Mortgages
at is to be noted also that this sec
ton contains the astonishing pro-
vision that such mortgages may be
flrst mortgages on real estate worth.
exclusive of buildings, the amount of
the lien and bearing not less than
per cent interest. That is, a per cent
flrst mortgage upon vacant real estate
IN an amount equal to the full value of
the land, satisfied the requirements of
the law. 1t is we'll known that such
securities are not marketable or safe"
In sustaining the demurrer of the de-
PENDANT company Judge Hallam SAYS
that the ordinary course of law seems
TO promise speedy and equitable relief
TO the plaintiff in recovering upon her
claim, and that the only way in which
the company can be forced to bring
securities into the state is through
| quo warranto, which can be only be
brought with the consent of the at
| torney general.