The evening times. [volume] (Grand Forks, N.D.) 1906-1914, 1912-06-10
COMMISSIONER
TAYLOR OBJECTS
Saws the Western Hail In
demnity Exchange Can
not Operate Here.

Commissioner w. G.. Taylor To-Day gave
out the following statement:
IF S. l. Paradice. manager of the
Western Hail Indemnity Exchange of
st. Louis. Mo-, is not bluifing. 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 adj
mittance to this state of insurance
companies, or of the writing of insur-
ancc contracts by unauthorized COM
panies.
Under date of April is. 1912, the
Western Hall Indemnity Exchange add
NiSed the insurance department that
1t desired to obtain a license to write
hail insurance in North Dakota. 1t
was stated that the exchange is not
incorporated, and thai it has no CAPT
tai stock.
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 a certificate of author
ity would De issued: that the exchange
would be required, in any case, to
comply with the provisions of Sec.
4449. which requires mutual insurance
companies, whether domestic or for
eisn,' to deposit With the state treas
urer $4,000 in perfectly good money,
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 a poser to Manager
Paradice, who nevertheless cheerfully
seized the other horn of the dilemma.
We do not choose to alter our plan
of insurance. he writes. and it we
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 YOU state. and we are
making arrangements to do So
TO this courteous defy the depart
ment replied: TO our mind the dis
tinction between an indemnity con-
tract and an insurance contract is
without essential difference. and this
department will seriously object to- the
writing by the Western Hail Indem-
nifty Exchange of so-called indemnity
contracts in This state. y n 1t is
only air to advise you hat anyone
who undertakes to act as your agent
in North Dakota will be prosecuted
by this department.
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 UNI
known or contingent event.
That any person acting for the
Western Hail Indemnity Exchange in
soliciting or writing hail indemnity
contracts without Il license from the
insurance department would be sub
ject to arrest and to the penalties of
the law is beyond question. Sec. 1908
provides that Whoever solicits 'insur-
ance on behalf of m insurance cor
roration or person desiring insurance
of II kind, or transmits an applica-
ton for a policy of insurance, other
than for himself. to or from any such
corporation. or who makes any con-
tract for insurance, or collects any
premium for insurance. or in any
manner aid or assists in doing either.
or in ~transactins any business OF like
nature for any insurance corporation,
or advertising to do any such thing,
shall be held to he an agent for such
corporation to all intents and pur-
poses. unless it can be shown that he
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 n he punished by a
fine CT not less than $50 nor more than
$500 for each o%ffense.'
If the Western Hail Indemnity
iS ioC III ldtl du insurance
company or association, subject to tho
supervision of the insuranc. depart
ment and amendable to the laws of
u state, then surely the farmers of
North Dakota will not entrust to sucn
a concern the handling of their funds,
nor permit it to write so-called in
demnity contracts in their behalf. II
1t is an insurance company or asso-
citation, then it canno lawfully do
business in this state until it has COM
Piled with conditions precedent. and
obtained a license to transact it's an
propriate business.
1T may be charged hat this warn
ing is published in the interest of the
insurance companies which are au-
thoriZed to write hail insurance in
his state. But such a charge is OBJ
viously without foundation. We have
a state hail insurance department, the
machinery of which is operated ex-
clusively by state and county officials.
We have a number of county mutuals
writing hail insurance. We have ono
foreign" mutual hail insurance COM
pany which has complied with the
state deposit provisions above re-
ferred to. And we have a number Of
stool; fire insurance companies. domes-
tic and foreign. which write hail in
surance. These companies are author
lied. They have compiled with all
legal requirements. They pay taxes
Tor the sun"Grt of state
They are entitled to the protection of
this department.
81 this warning is given primarily