Bismarck daily tribune. [volume] (Bismarck, Dakota [N.D.]) 1881-1916, 1912-06-10
will Be Asked to Decide as
to Unauthorized Companies
Writing Policies
Commissioner Taylor Warns
Farmers To Be Careful Of
Doubtful Concerns

statement:
IF S. l. Paradice, manager of the
Western Hail Indemnity Exchange of
St. Louis, NO., is not bluffing, the
courts of this state will shortly be
called upon to determine whether or
not there is any force and virtue in
statutory provisions governing the
admittaLce to this state of insurance
companies, or of the writing of insur-
ance contracts by unauthorized COM
panies.
Under date of April 18th, 1912,
the Western Hail Indemnity Ex-
change advised the Insurance De-
partment that it desired to obtain a
license to write heii insurance in
North Dakota. 1t was stated that the
Exchange is not incorporated, and
that it has 10 capital stock.
1.-THE Department advised Manager
Paradice that, in view Of the fact that
the Exchange was not incorporated
and had no capital, there was little
likelihood that certificate Of author
ity would Re issued; that the Ex'
change would be required, in any
case, to comply with the provisions
of Sec. 4449, which requires mutual
insurance companies, whether domes-
tic or foreign" to depisit with the
state treasurer twenty-five thousand
dollars in perfectly good moeny, or
in lieu thereof, bonds of the state or
of the United States of the par value
of $4,000.
"This latter proposition proved
something of poser to Manager Par.
adice, who nevertheless cheerfully
seized the other horn Of the dilemma.
We do not choose to alter our plan
of insurance. he writes, and if we
complied with the laws of your state
we would then be an insurance COM
pany and not an indemnity exchange.
However, We see no obstacle which
prevents US from writing indemnity
contracts in your state, and we are
making arrangements to do So
"To this courteous defy the De-
partment replied: TO our mind the
distinction between an indemnity
contract and an insurance contract is
without essential difference, and this
Department will seriously object to
the writing of the Western Hail In
demnity Exchange of so-called in
demni+y contracts in this state.
It is only fair to advise
you that anyone who undertakes to
act as your agent in North Dakota
will be prosecuted by this Depart
ment.'
Our statutory definition of insur-
ance is as follows: Insurance is a
contract whereby one undertakes to
indemnify another against loss, DAM
age or liability arising from an un-
known or contingent event.
"That any person acting for the
Western Hail Indemnity Exchange in
soliciting or writing hail indemnity
contracts without a license from the
Insurance Department would be sub
Jet to arrest and to the penalties of
the law is beyond question. Sec. 4508
provides that whoever solicits insur-
ance on behalf of any insurance cor
poration or person desiring insurance
of any kind, or transmits an applica-
ton for a policy Of insurance, other
than for himself, to or from any suca
corporation, or who makes any con-
tract for insurance, or collects any
premium for insurance. or in any
manned aids or assists in doing either,
or in transacting any business of like
nature for any insurance corporation,
or advertising to do any such thing,
shall be held to be an agent for such
corporation to all intents and pur-
poses, unless it can be shown that
he receives no compensation for such
services Sec. 1909 provides that
every person violating the provisions
of this and the previous section (the
one above quoted) shall be guilty of
a misdemeanor and be punished by a
fine of not less than fifty dollars nor
more than five hundred dollars for
each offense.'
IF the Western Hail Indemnity
Exchange is not in fact an insurance
company or association, subject to
the supervision of the Insurance De-
partment and amenable to the laws
of our state. then surely tie farmers
of North Dakota will not entrust to
such a concern the handling of their
bonds, nor permit t to write So
called indemnity contracts in their be-
half. II it is an insurance company
or association, then it cannot lawful
" do business in this state until it
has complied with conditions prece-
dent, and obtained license to trans
act it's appropriate business.
1T may be charged that this warn
ing is published in the interest of the
insurance companies which are au-
thorized to write hail insurance in
this state But such a charge is OBJ
viously without foundation. We have
a state hail insurance department,
tie machinery of which is operated
exclusively by state and county off,
Gals. We have a number of county
mutuals writing hail insurance. We
have one foreign" mutual hail insur-
ance company which has complied
with the state deposit provisions
above referred to. And we have
number of stock fire insurance COM
panies, domestic and foreign, which
write hail insurance. These compa-