The Bismarck tribune. [volume] (Bismarck, N.D.) 1916-current, 1929-07-02
PUBLIC BUILDINGS
INSURANCE CAUSES
HOT LEGAL BATTLE
Commissioner S. A. Olsness Pre-
pares to Defend Standing
on State Awards

Preparations were being made to-
eiay by State Insurance Commissioner
8. a. Olsncss to defend a suit
launched Yesterday in the Burleish
county district court by representa-
tives of the Insurance Federation OF
North Dakota.
A temporary restraining order was
issued Yesterday by Judge RED Jan
sonius to prevent Olsness from
awarding reinsurance contracts Oh
p,,blic buildings to the home offices
Of private insurance companies. Inc
case. which has been brewing ior
some time, involves the insurance on
approximately $40, 900 900 OF pubic
buildings and is expected to De olt'et-
~ fought.
The legal question hinges on the m
depreciation OF two commas ana loui
words in a law passed IN 1927.
Eeenacting the law granting the
insurance commissioner authority 70
relpsure risks on some public build
incs with private insurance colnpa-
MES in order to protect ths etale
fire insurance fund, the legislature
lid provided that III placing sucii
insurance in the private companies
hereinafter mentioned, the commas
sinncr of insurance shall, SO tar as
rrssible. place such insurance ouSl-
ness through the North Dakola
agents Of such companies RESIDING III
the county or counties III which the
property insured is located.
In their complaint filed yesterday,
the insurance agents interpret 1lle
phrase 80 far as possible, 10 nledi'
unless impossible The insurance
commissioner feels that the court, IN
yiew Of the facts. will make a dltier-
ent Interpretation and permit him 10
continue with the plan OF placing the
insurance direct with the home Office
of insurance companies.
The plan which he is advocating.
Qlsness said. will save the state from
j 600 to $4,000 a year which now Is
being paid to local insurance agents.
Since they have little work TO 40 IN
connection with getting the business
n, said, it is practically a gait. BY
nlaclng the business direct with the
home office of the various companies
he plans to eliminate the agents COM
mission and thereby save the money
for the state. the agreement rcquir-
ing the companies to refund 10 tne
state the commission which otherwise
would be paid to the agents.
Olsness said that III placing rein
slrauce with some mutual companies
it would be impossible to give local
agents the business since they have
no local agents.
A question which probably VIII De
raised before the cas- IS finished Is
the right OF the insurance commas
sloner to place reinsurance with
riutual insurance companies. ObJec-
ton to this practice is based on the
theory that the holder OF a mutual
policy shares the obligations as well
as the benefits of the mutual system
and that the state may hot incur such
a c%outractual obligation. OlsneSs
plans to get around that by taking
out worcestershire policies IN mutual
companies which have sufficient fl
nancial strength to issue them under
the law.
Argument in the case was set for
July 9 and in the meantime Olsres5
is enloined from letting reinsurance
contracts for more than 60 days cx-
cept through the recognized local
agents of private insurance compa-
mics.
OlsneaS wa to confer with Attorney
General Jim Morris today relative to
a defense of the action.