Dakota farmers' leader. (Canton, S.D.) 1890-19??, 1910-11-18
BASF0RD WARNS
COMMISSIONER OF INSURANCE
WARNS PUBLIC AGAINST
THE UNLICENSED
Cannot COLLECT LEGALLY
Insurance by Unlicensed Companies
U~ncoIIectibIe and the Insured
Liable to Prosecution
Under Law
BY O. 8. BASFORD.
INSURANCE COMMISSIONER

ID ". a. IAoPoIlb
Insurance COMMISSIONER
1t has been difficult for the insur-
ance department to eradicate entirely
the writing of illegal insurance.
A bond taken out from an unlicensed
company is unbelievable in our state
court.
Policies are solicited by mail by I'M
licensed companies and we have secur-
ed from Attorney General Clark a
communication which we issue as a
warning. Two two points to be en-
phasiZed are:
First. Such insurance is uncoll>,t-
able in our state courts.
Second. The person signing an ap-
plication to an unlicensed company Is
liable to prosecution N punishment
as well as the company which writes
the insurance.
General Clark says:
Answering this inquiry I would par
ticularly call attention to Sec. IA OF
Capter 210 of the Session Laws OF
1909. This section reads as follows:
ut shall be unlawful for any per,
son, company or corporation in this
state. either 20 procure. receive or Cor
ward applications for insurance in, or
&c issue Or deliver policies III any con1-
pany or companies not having been
legally authorized to do business in
this state, and any person. company or
corporation violating the provisions
Of this act shall be deemed guilty
of a misdemeanor and upon conviction
thereof shall, for each and every Of
Tense, be punished by a fine not to
exceed $4,000 or Imprisonment for not
to exceed two months in the county
Jail, or by both such fine and imptis-
onment."
Secs. 10, Is and 16 OF Chapter 21O
of the Session Laws of 1909 a'so p o.
vide requirements of foreign insurance
companies before they may transact
business in this state.
And Sec. 667 Of the Civ. Code of 1903
provides in part as follows:
mo company %transacting the busi-
ness of fire insurance in this state, not
incorporated under the laws of this
ten any policy of insurance on prop
erty located in this state except
through a duly authorized agent of
such corporation who shall res de
within the state, and who shall be Ii
censed by the commissioner of insur-
ance according to law" g.
From these quotations of the law
you will readily see that any person
connected with the procurement of a
policy Of insurance issued by an IN
a,vtA@~t0o1 u So 1{oh10 ~ ~,,~-
ishment, and particularly so under
the provisions Of Sec. il Of Chapter
210 Of the Session Laws of 1909.
There is no question but that these
provisions Of statute are constitutional
and will be sustained by the cou is.
Where a policy of insurance is de-
posted in the mail, outside of the
state, and addressed to and delivered
to a person within the state, the
place of delivery fixes the locality of
the act; and, in the present inquiry,
where an unauthorized insurance COM
pany places a policy of insurance In
the mails addressed to and with the
intent that it be delivered to a pc son
with this state, such unauthorized
company has committed a crime with
in this state and is subject to prosecu-
ton within this state for the viola
ton Of our laws.
Therefore, it is my opinion that ev-
cry time a policy of insurance is re-
ceived by mail in this state, from an
unauthorized insurance company in
this state, that the officers of the COM
pany depositing the policy in the mails
and the person receiving the policy
from the mails have each violated the
provisions Of Sec. II Of Chapter 21O
of the laws of 1909. and that they are
each liable to fine or Imprisonment,
or both, for each separate onense.
I call your attention particularly to
the fact that the resident of this state
who forwards his application of insur-
ance through the mails, from such an
unauthorized company is himself
liable to arrest and imprisonment or
fine. or both. equally with the agents
Of the unauthorized company who re-
ceived the application and who for
warded the policy. -l- o
I would furthermore call your at
tention to the fact that no recovery
can be had, in this state, under a
policy of insurance that was issued by
IN unauthorized company. Any per-
o taking out insurance in such UNI
authorized company, is not only liable
to punishment, bue he cannot ecover
a cent, or the policy, If loss occurs.
through the courts Of this state.
Trusting this W your inquiry,
I am Yours very truly.
S. w. CLARK,
Attorney General
Observation-Disclosures entered the post