The herald-advance. (Milbank, S.D.) 1890-1922, 1910-11-18
BASFORD WARNS
COMMISSIONER OF INSURANCE
WARNS PUBLIC AGAINST
THE UNLICENSED
COLLECT LEGALLY
insurance by Unlicensed Companies
UncoIlectible and the Insured
Liable to Prosecution
Under Law
BY o. s. BASFORD.
Insurance Commissioner

insurance Commas. Oner.)
1t has been difficult for tie insur-
ance department to eradicate entirely
the writing of illegal insur n e
A bond taken out from an unli ensed
company is uncollectable in our state
court.
Policies are solicited by nal by I'M
licensed companies and we have secur-
ed from Attorney General Clark q
communication which. we is lie as q
warning. Two two points to lie en-
phasized are:
First. Such insurance is uccolleet-
able in our state courts.
Second. The pc son signing an ap-
plication to an unlicensed compa y Is
liable to p osecutiOn and unlsnn n
as well as the company VIII en- writes
the insurance.
General Clark says:
Answering this inquiry I would var
~ticularly call attention to Sc. IA OF
Capter 210 of the Session La S OF
1909. This section reads as follows:
~ phoii NC " ~ ICtp
son company or corpo at o II this
state, either to procure, receive or for
ward applications for insuran e in or
to issue or deliver policies in any COM
pany or companies not ha ing cen
legally authorized to do BIS ness in
this state, and any person, company or
corporation violating the pr Wis ons
Of this act shall be deemed guilty
of a misdemeanor and upon convi ton
thereof shall. for each and every Of
Tense, be punished by a fine not to
exceed 500. 90 or Imprisonment for not
to exceed two months in the county
Jail, or by both such fine and imp IS
onment."
Secs. Is. Is and 1G OF - ter 20
of the Session Laws Of 1903 a S 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 TIE bust
ness of fire insurance in This ate, not
inco porated. under the. laws Of I is
state, shall write or cause to lie writ
ten any policy of insuran e o. prop
erty located in this state except
through a duly a~uthoFi2e1 agent OF
such corporation who. shall res de
within the state, and who 81 a ! lie Ii
censed by the commissioner o. instr
ance according to law"
From these quotations Of the law
you will readily see that any pets II
connected with the procrreTe nt OF a
policy of insurance issued by an un-
authorized company is liable to p n
ishment, and particularly so under
the provisions of Sec. Ia O" Chapter
2l0 of the Session Laws Of 1909.
There is no question but that the Sc
provisions of statute are CONSTITUTE ma
and will be sustained by tie cou IS
Where a policy of insurane IS de-
posted in the rail, outs de of the
state. and addressed to and de ivered
to a person within the sta e. the
place OF delivery fixes the local tv OF
the act; and, in the present inqui y.
where an unautEt rized insurance com
pany places a policy OF irsuranoe In
the mails addressed to and with the
intent that it be delivered to a pc son
with this state, such u~na"thoriz9d
company has committed a crime with
Ill llIS Sldlt anu IL oubJS1I " pioot u
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
seived by mail in this state, from an
! unauthorized insurance company ir
this state, that the officers of the CON
pany depositing the policy in the mails
and the person receiving the policy
: from the mails have each violate tbs
| provisions OF Sec. IA Of Charter III
] Of the laws of 1909, and that thev ar.
; each liable to fine or imp isonment
; or both, for each separate offense.
q I call your attention particularly t,
t the fact that the resident of tbs stat,
Y who forwards his application of ms IT
I ance through the mails, from such al
t unauthorized company is himsel
: liable to arrest and imp~isonme t o
Y fine, or both, equally with the agent
of the unauthorized company who re
ceived the application and who for
warded the policy.
| would furthermore call your ct
4 tention to the fact that no recover
Q can be had. in this state, under
; policy OF insurance that was issued b
an unauthorized company. iAry rer
. son taking out insurance in such un
authorized company, is not Only liabl
a to punishment, bue he cannot recove
a cent. on the policy, If loss occur
. through the courts Of this state.
Trusting this answers your inquir,
y am Yours very truly,
S. w. CLARK.
Attorney Genera