# Brief for the Appellant — Hoopeston Canning Co. v. Cullen > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386403_0127%3A4 ## Record - **Collection:** Supreme Court brief - **Document type:** Brief for the Appellant - **Published:** January 1, 1943 - **Citation:** 318 U.S. 313 ## Text oe - ‘ : « —_ Court of the United States — - ; Octonzn Trio, 1942 No. 358 HOOPESTON CANNING co., E. PRITEHARD, INC., : Dee Se | er AL ae | Appellants, arr “U8. ince et LOUIS H PINK, Surerintenvenf vi/Insutance oF THE Srate or New York, fT aL, ~ ° | ; Nees ? ) | - : ‘ Appellees. 8 ss ° es : 2 APPEAL FROM THE SUPREME COURT OF THE STATE OF NEW YORK. : / “7a. ; ° A - . BRIEF FOR APPELLANTS. D | Frangxun D. “TRUEBLOOn, { J Craic R. Jonnson, . ; ; ‘Counsel for Appellants. Cart O..Orsox, - = * m : ye | Of Counsel. tracts is not affected by acts in the Btate of | New Work+....ccccgceccccnsees ret erty. | (a) Inspection of risks or lossés i eee ac ales (b) Explaining transaction to prospective in- 7 TY EPP OTTC Pree Cer re et ye : ‘ - | | ; off ia SUBJECT INDEX. % ; , ipo! | PAGR ~ ~ Opinions Below ..s...0ceeceereeeeeeeeen ens (arwiwes 1 7 Jurisdiction .. pseveawe ; PSE cians ivebiden eee 1 Statutes Involved See je one AEE OEE S, Statement of the Ps irate caeeey aVegeasaees 3 1. Parties ..... estes Raper OE RE aa ae om Procedings Below dee Bs Pe easy ee kara 3. Statement ct ccaemeryvaen” 5 - (a) General Statement ..-.....---+++++++s vo? _(b) History of Groups. ee nag cant Shite _{e) How the Plans’ Operate....... epee pie « (d) Financial Standing of Groups.........- x% - (e) Economy of Cooperatives.........-.-++: 9 (f) Comparative Insurance Costs.........-- : (g) Licenses. of Groups...-....2eeeeee eee 11 (h) Effect of New York Statutes....:.-.---- 13 | Specification of Errors. Hecetkeveuwbeessvceveucecss . Suinmary of ‘Argument. ae cewienen aes ee a Ae Argument . Seikioge ueereanes® Ce cemane weceve’s ceaain’ ee ae I. Jurisdiction .....---- bcseterees euchnnwe Msavee ae ‘Under the due process clause the State of New _ York is prohibited from exercising ——: -over appellants’ contracts of inter-insurance. 15 (1) The Illinois jurisdiction over appellants’ con- ae ii (0) ‘tila prospective insured an applica- ea SU RE i 0k act iene a veda ee Rye ae: 2 (d)' Gollcitation: . 2... 0365 .6005 wien yn eal 2 (e) Recommendation by Subscriber..... a..-8 (2) The fact that appellants are licensed by the’ } State of New York has no bearing on the ques- ‘tion of jurisdiction to regulate. hires asbeapeae J / (8) Neither the location of the insured Property , nor the residence of the Subscriber in New York State can afford any basis for regulation ~~ ) by New York of appellants’ Tllinois contracts. 2% (4) The Court of Appeals failed to ‘apply the limi- a tations of due process in the Case at Bar..... 2 - Authorities Cited by Trial Term on | Issues of Jurisdic- : WOR caccencikgnetahta ries unaikhs pecan tdoesaten ss “34 II. Equal Pealedins Of DIME. Cokin i OR Section 412, subsection 1, Section 417, subsection 1, and Section 418, subsection 1, are invalid and inapplicable because they deny to appellants the equal protection of tlie Oo. ees eee 38 III. Unreasonable Regulation ........... Se edge 42 The statutes are invalid and inapplicable on the - ground of unreasonable regulation kaave kactona 42 IV. Conclusion SG UMOw PARA CRRAS Maas ae uh aaewen eats ee Appendix A: Statutes‘Sued Upon...............++. 51 Appendix B: Statutes Indirectly Involved....:..... 58 . i "Taste oF Cases Crren, : Ets Lite Tae: Co. v. ‘Dunken, 266 U. Ss. 388, 399. 15, 27, 29 > Mllgeyer v. Louisiana, 165 U. 8. 578, 591............ 16, 27 Boseman vy. Conn. Gen: Life Ins. Co., 301 U. S. 196, SRA eras ee ae C.B. & Q. R. Co. v. MeGuire, 219 U.S. 549, ee 42° ; Clay Fire Ins. Co. v. Huron Salt Co., 31 Mich. 345, BE reid wha chachaceh iv tidessia ss aug atl nce 19,26 . Commercial Mutnal Accident Co. v. Davis, 2 213 U. 8. PE isso ceo s Nou vantianprenniheces vb iss uieyae > bisa 24 Compania de Tabacos.v. Collector, 275 U. 8. 87,100... 34° ‘Concordia Fire Insurance Co. v. Tlinois, 292.0. 8. 535, «$45, 549 ..... bea Meee Ad CAA MOR 8 oop CRAB emo pe-s 42 / _ Connecticut. Fire Ins. Co. v. Way, 62.N. H. 622, 623. ..19, 52 Cotting v. Godard, 183 'U. S. 79, 109, 111, 112.......... 39 “Crandall v.. Nevada, 73 U. 8. 35, 49........... ad viel Bdwards v. California, 314 U: S, 160........ einer 23, 39 "Engel v. O'Malley, 219 U. 8. 128, 138...........0.... 39 Equitable Life Ass’n. Soe. v. Penn; 238 U. S. 143, 147... , 34 ‘Fidelity & Deposit Co. v. Tafoya, 270 U. 8. 426, 434, MD cch dune cltnbascDae en OOF, Ce OPS PE eed . -26, 28 Firenian’s Ins. Co.-v. Beha, 30 F. (2d) 539...... Mivk , 31 Fireman’s Ins. Co. v. Conway, 278 U. S. 580.......... _— _ First National i v. — 273 U. Ss. 548, 552, SN Gist bon atae Mes : stedewes St Seleccinest> mie French v. People, 6 Colo. App. 311. Siewanceatplesccks ie Frost v. Corporation Commigsion, 278 U.S. 515, 522. .39, 42-. | Green v. C. B. & Q. Ry. Co., 205 U: 8. 530, Ss SB. , | Hanover Fire Ths. Co. v. Harding, 272 U. S. 494, 507.. 26 ae : International Text Book Co.-v. Tone, 220'N. 2 313, 318. 2% iv Hartford Indemnity Co. v. Delta & Pine Land Co., 292. mS & | Breer aaa ae eres 16, ae en igh sh ydenshpveudcbcusceatabanene Home Ins. Co. v. Dick, 281 U. 8. 397, 407, 408 bine ok fete: . Hyde v. Goodnow, 3 N. Mae WERE s sass sib conven 22, 28 ' Kasprzak v. Mutual Life ‘Assur> Co. of Canada, 1F. ‘Supp. DIS eee eee cece een ee eee eee eee seens 2 Knights Templars’ Indemnity Co. v. Jarman, 187. v. gs, => [Rep Mae Mav a Ne hs cei uce vance \s bona cncesensvnr Korn and Wifkmiller v v. Mutual Assurance Society, 10 U.S. 192, 201..... yecwaet Sine bal tae b0N 4 chan Liverpool Steam Co. v. Phenix Ins. Co., 129 U. ie 391, " Louisville Gas & E.-Co. v. Coleman, 277 U. 8. 32, 37... 89, 42 Marine Ins. Co. v. St. Louis ete. i, Co., 41 Fed. 643, | GY jad eee Pi cceiians ta os ae - Mas v. Owens-Ilinois Ginss Cox 34 F. Sune 415, 421., 2 Matter of Northwestern National Insurance Company v. Pink, 288 N. Y. 359 (1942).7..5.. - aT Ree 9 Mayflower Farms v. Ten Eyck, 297 U. S. 266, 272, ‘O74. Minnesota Commercial Men’s Ass’n. v. Benn, 261 U. S. 140, 143, 144, Sete Co eter euceceas 16, 22, 27, 29, 3 _ Modern Woodman v. Mixer, 267 U.S. 544, 551, Be : g Mutual Life Ins. Co. v. Cohen, 179 U. S. 262, 269... .°.16, 27 McFarland v. American Sugar Refining Co., 241 U. S. 79, 86 ....... hive teticcs. wes gabnwsibvsnevrncses McLean v. Arkansas, 211 U. 8. 539, 548:....... payer, ‘Nebbia v. New York, 291 U. S. 502, GON Nae ie . ? fy e v oe ; New York Life Ins. Co. v. Dodge, 246 U. 8. 357, 373... ° 27 - New York Life Ing. Co. v. Faced 234 U.S. 149, 1B jcseseeeceeeeeseeeects bails Son sami 25, 27, 29 0’Gorman & Young v. Hartford Fire Ins. Co., 282 U.S. i) Se eee eee, gee vepeeavececess 44 - Osborn v. Ozlin, 310 U. 8. 53. apa OO dst Fy RA PARR Se ee 34, 35 ’ Palmetto Fire Ins. Co. v, Beha, 13 F. (24) 500,504, fs EY aeey (seeks UOAe beecopscccseedeocey ss satay St “He Palmetto Fire tes Co: Vv. Com, 272 U. 8.295, 304..... 26 x Pennsylvania Lumbermei’ 8 ‘Ins. Co. v. Meyer, basil Le Bios CL, Oe ESE 24 | People, ex rel,, Kirkman | v. Van Amringe, 266 N. Y. beg MO a pcdsinoceves Gobesspasceneounes te Ket ass « 28 : People, ex rel., McCall v. Gilbert, 44 Hun. ( 51 Sup. | Ok) 848, SOR 63s... Ghiiaiabecsh ees series 6 22 ' People, ex rel., Sea Ins. Co. v. eek 274 N. Y. 312... 28 Provident Savings Life Assurance Society v. Kentucky. Fe SS NE ener ceareace Bes wie rth ¥ Royal Arcanum v. Green, 237 U. 8. 531, 542........., 17 Sasnett v. Iowa State Traveling Men’s Ass’n,, 90 F. (2d) 514, certiorari denied 302 U. S. 711..:....:. 22 - Smith v. Swormstedt, 57 U.S. 288, 302 bapeees ining ee St. Louis Cotton Compress Co. v. _ Arkansas, 260 ge eae Oa aed dee Ash Sie ot pap ee 16, 27 ‘Taggart v. Wachter, ete., Ine. , 179 Md. 608, 618, 619.. 17 Tauza v. Susquehanna Coal Co.,.220 N. Y. 259, 267... "Se - Terral v. Barke, 257 U. S. 589; 888... 5...3.60360.3.. 6° Truax v. Corrigan, 257 U.S, 312, 332, 333...... ayeway: 42 Western v. Genesee Mutual Ins.: Co., °12 N. Y. 258, 3 Beet aoe re ae, ae ee - Searores Cirep. | Constitution of the United States, 14th Amendment. :12, 13. Insurance Law of the State of New York (Chapter ~ 882, found at pages 2530 et seq., in Volume 2 of the © Laws of 1939 of the State of New York, being Chapter — 28 of the Consolidated Laws of New York): . ‘Sections ee eC ee ha gu ay oan seh asan 2 ORR OT Se aay pape ae ae 28 MD Sadkwccevcchesnsieusssvadewseciunt 31 oe hee Fic dws d's Ve dn abu) ooo line 31 NR a es nd eens 5 the ‘ ; 3 . X . ; © es . , oO - : ; | 3 o i eo- : \ . as: “ | oe. @ . : ; 4 . : \: | \ \ ‘ -o \ . \ . | . ) : : , y i ; ch x os ¢ o 4 ra 2 * . ag ; ~ ‘ . : - | | 2 : J | | a : - | : ‘ : ; - . ; - : ‘ ae 3 . ica : | . | e Sek" | ‘eo , | | ‘ 2 j E - “h . rn fe ; 3 , | ‘ . a | | | : E : | | . | . ° ; | | | , . 3 . > ‘e : 7 . * . aa “ ; ! .* : ) | | | . . ; i. oe | " . : | 8 : : : may * ; * ; ; * ~* . " - 7 . : | \ 4 2 3 : | 7 | | : a, é : | E . b ’ > | ——_— = : | . . ° ‘ ; ' ~ , " ; ; o aa ; 2 - ‘ . “ 3 | ' - ‘ ; | | * aes ; . - | : « ‘ E | c = ; | ; “ | = * = ee: * ‘ ° b r . i . Y : r : : | ; as ‘ » e eS : | - i | e% : : : ° ‘ | : : | | : ; ; . . . . . e 8, 5 7 . iT . ; . ; | * ° 8 : | ; — . ; ° . € IN THE . ‘supreme Court of the United States Ocroser TERM, 1942. ee, iy at ra sie HOOPESTON CANNING CO., a Corporation; E. PRITCHARD, INC., a Corporation; LANSING B. WARNER, INCORPORATED, a Corporation; HARRY M. BROWN anv JAMES T. SMITH, PAUL E. EMER- 6 SON, axp BEN A. MORTON, | j Appellants, - , v8. Bae tas _ LOUIS H. PINK, as Superinrenpent or INsuRANCE OF THE Srate or New York, anv JOHN J. BENNETT, JR., as ATTorn@yY-GENERAL OF THE Grass or New York, _ Sore ; APPEAL FROM THE SUPREME COURT OF THE STATE OF NEW YORK. ® > ae . : S . , BRIEF FOR APPELLANTS Lo : we Opinions Below. | The. opinion of the Court of Appeals of the State of New York is reported i in 288 N. Y. 291, the opinion of the Appel- late Divisjon in’262 App. Div. 446, and the opinion of. the Trial Term ~ 24 N. Y.S. (2d) 312. , od es \.. + Surisdiction. - This ey is ae pursuant to Section 237(a) of the - Judicial Code of the, United States as. amended (28 U.S. C. A., See. 344(a)), and Section 1 of the Act of Congress’ . + Ne _ of January. 31, 1928 (c. 14, 45 Stat. 54), as amended by the / Act of Congress of April 26, 1928 (c. 440, 45 Stat. 466), from the final judgmeift of the Supreme Court of the State. of New York, Albany County, entered on June ‘23,-1942 (R. 204), pursuant to the remittitur of the Court of Ap- _peals of the State-of New York (R. 201). . The appeal was « allowed by a member of this Court on August 6, 1942 (R: 215): . Refererice is made-to the Statement as to Jurisdic-. tion filed pursuant to Rule 12 as amended for’a concise — statement of. the grounds on which the jurisdiction of this Court is invokéd. This Court noted probable jurisdiction . ~.on October 12, 1942 cm. 325). ° Statutes Involved. The stated involved are certain portions of Section 130; Section 168, subsection 2; Section 410, subsection 1; | - Section 412, subsection 1; Section 413, subsection 2; Section ’..-415, subsection 1; Section 415, subsections 1(d) and-1(e); Section-417, subsection 1; Section 418, subsections I and 3; - Section 420; Section 421, and Section 422, subsection 1, of . _ the Insurance Law of. the State of New York. The perti- ~~ nent portions of these statutes are. summarized in the Statement as to Jurisdiction, begivning at page 2, and the statutes ‘are set out in Appendix A. The objectionable portion of Section 40, subsection 4, alleged in the. com- ' plaints having been exscinded by the legislature after the _ commencement of these suits need not hereafter be con- - sidered. The statutes indirectly involved in this appeal - are eet out in pete B. Statement of the Case. oe ‘1. Panrms. As 5 ~The seer plaintiffs beléw, . are. representatives of 4 2 '. approximately 976 persons, firms, and: corporations in the Canners Exchange suit and of approximately 2100 persons, . . firms, and corporations in the Warner Reciprocal’ Insurers suit. Thiese are class suits, under Section 195 of the New York Civil Practice Act, where the questions in each suit are of common or general interest to ‘many persons and those who might have been made parties are very numer- ~ ous and it was impracticable to vara them all peters the Court. * Smith v. Swormstedt, 57 U. S. 288, 302: - The delehteats are the Superintendent of Insur ance and the Asienay General of the State of New York. ee Daccnmiciien BeLow. 2 The appellants, being two separate“gronps of persons, _ firms, and- corporations exchanging in Illinois contracts of | indemnity against loss or damage from fire, and their — Attorney-in-Fact, brought their separate actions, later can- solidated, in the Supreme Court of theeState of New York, Albany County, on November 1, 1939,-for a declaratory judgment. By these actions the appellants ‘challenge the. validity and applicability to. these groups of certain por-- - tions of the New. York Insurance Law under the Four- teenth Amendment to the Constitution of the United States. _ Consolidation of the causes was ordered (R. 154).) A trial “ to the Court resulted in & judgment (R..149) declaring that the State of New York had jurisdiction to regulate appel- lants’ contracts of indemnity, but that certain of the ehal-’. lenged statutes were invalid under the equal protection ~ -Court.denounced the attempt to strike down thé constitu. . | ish __ tional right, stafing (p. 149); ow , | «(The Mississippi statutes, so construed, deprive the » appellant of due process of law, A state may limit or prohibit the making of certain contracts within its ‘39 L. ed. 297, 15 S. Ct. 207, ® Inters, Com. Rep. 610; _ Orient Ins. ‘Co. v, Paggs, 172 U. & 587,-565, 566, 43 L. ed. 552, 555, 556, 19 S.Ct. 281; New York L Fns. Co. - y. Cravens, 178 U. 8. 389, 398, 399, 44 L. ed11167 1123, - .- 1124, 20 S.. Ci 962) ; but it cannot extend the effect of its laws beyond its borders so .as to destroy: or qnpair the right of ¢itizens of ‘other states to make a contract not operative within its jurisdiction, and lawfui where — - - made... New York L. Ins. Co. v. Head, 234 U. 8. 149, 58 L. ed. 1259, 34 S. Ct. 879, Aetna L. Ins. Co. v. Dunken, 266 U. S: 389, 399,.69 L..ed. 342, 349, 45 5S Ct. 129. Nor may it in an. action based upon such a 4 contract enlarge the obligations of the parties ‘to ac- cord with every local statutory policy solely upon the “ground that one of the parties is its own citizen. Home dns. Co. v.- Dick, 281 U. S. 397, 407, 408, 74 Ti. ed. 926, oF 933, 934, 50 8. Ct. 338, 74 A. Le R. 701.” ¥ own territory: (Hooper v, California, 155-U. S. 648, | ; oe : ‘31 * We ¢ submit that. there is no diffgrence in. principle | be- tween the above case and the case at bar. - The Court of: Appeals limited its law to a case in the District Court, Fireman’s Ins. Co. v. Beha; 30 F. (2d): 539 Combay,! 278 U. S. 580), where the insurance contracts were admittedly entered into within the State of New York over ‘them. The sole issue in that case was whether. the ‘state could require a ‘non-resident insurer licensed’ and doing business in New York to conform to. the financial _ requirements imposed ‘upon domestic insurers as a con- - dition tg the retention of its license, although acts in re- lation thereto thight be ‘required of. the insurer outside of the state. The Court answered this question in the affirmative. The case is net in point, nor did the appellees deem it of sufficient importance ta cite in any of the courts ° below. (. licenses (R. 198), asserts that because’of these licenses the Subscribers know that the minimum ‘capital and the those. of domestic insurers, iting | Sections 42 and 90 (Appendix, B): of the Insurance Law. ‘(These considera- ‘ tions’? says the Court, ‘‘are helpful: competitively in ob ' taining insurayee. -business.”’ acaeaely owners - simply earry their own insurance, At is cooperatives i in addressing the. National Cafiners Conven- tion said (Exhibit 91-; R. 73, 314By: 1. Albert Conway, “having succeeded” James a Beha as Superinteride nt . of Inshrance of ‘New York. was substituted’ ‘as a party defendant in the Supreme Court of the United .States. He was later elected to the Court of Appeals and wrote the opinion in the instant cause in the court belowe As Superintendent of Insurance Judge Conway lieard and passed upon appellants’ applications for licenses in 1930. “(affirmed on a procedural point in Fireman’s Its. Co. v, ‘ and ‘there was no question as to the jurisdiction of the state. ‘The Court of Aneel, ‘Sinan that deiniieie derive : a pecuniary or economic benefit from their New. York | assets of the -insurers mist be substantially the same as" P) . : . The element of competition cannot be present where the as true today fis it was in 1916 when the founder of these - ‘¢Another thing I wish to impress upon you is that , s) Us Canners Exchange is cooperative and not competi. ' tive. It is not in competition with anyoné or any in- ‘surance company. It j is a plan for the canners to carry _their own insurance’and tb pay only the-cost; The - United States Steel Corporation, the Standard Oil Company and other large,corporations, we understand, carry a large part of their own insurance. They feel .. that they have a large enough namber of separate. risks to create an average and think they can there- | fore, better afford to stand a loss now and then than to _ pay premiums on all their risks, and if they have a proper average they ean. Because they do this; are . - they in the insurance business or are they in competi-— _ tion with the stock companies? Of course, not. They | are simply carrying their. own insurance... Thid is. ‘exactly what you canners are doing, except that no one of you have enough | separate risks to make an ~ ‘average, so you join. together at the office of Canners Exchange and accomplish the same result. You can really see that there is:no competition, but you are - ' merely securing your insurance at what it costs.”’ - These remarks: apply with equal force to Warner Re- | * ciprocal Insurers. Neither tobe ever been changed. - There has been no material incfease in Subscribers dur-" ing the past decade (R. 126, 142). The increase in deposits made by New York Subseribers (R: therefore: neces- sarily reflects the‘increased insurance needs ubscribers’ for the period, and the taking out of the licenses had-noth- jing to do with the increasé. The enlarged volume o deposits is readily explained, Stotks of canned goods and rroceries ‘constit te the bulk of the insured property. size and value of these stocks vary with the times, depend- ing upon crops, economic conditions, markets, and other factors. The bottom of the. cataclysmic depression having been reached early in the 1930s, values of canned goods and groceries, as well as. of buildings and equipment, ‘were | _ unprecedently low. But as business conditions improved, inventories increased, both in amount and value. Appel- 33 ants’ insurance coverage, and therefore the deposits, in- creased in proportion. This was true in New York as well as in the rest of the country. _ ThesCourt of Appeals next adverts to the lstehen (R. 200)... The discugfion is-confused. The Court says that if appellants were not authorized or licensed in New York and transacted no busi! t state, the statutes would not be. applicable, but since appellants are licensed, the sections (except Section 130 which it discusses separately) : are applicable, the Court thereby i ignoring the fundamental rule that a license cannot furnish a basis for the impositign of unconstitutional rMMilations. Section 130, which on its {gr applies only to the foreign insurer who ‘‘shall in this state issue, deliver or otherwise effectuate any contract ‘of insurance,’’ is by a piece of. judicial. amendment held to apply to appellants’ cantracts because ‘‘as indicated = they (appellants) are doing business here.’’ The holding of the Court of Appeals that thesis Sub- . seribers are. doing business i in New-York in effect compels appellants to retain their New York licenses. Thus all of the challenged statutes become applicable to them. There- - fore the Court’s, statement that the statutes apply only to authorized reciprocals is misleading. As the decision now — stands, the only escape from regulation open to the New , York Subscribers i is for them to give up their insurance. Why ‘should these business men be compelled. to give 7 up carrying their own insurance and thereby add up to fifty per cent to their insurance costs simply because the State of New York has seen fit to impose a set of untried” regulations upon them? Doubtless old “line companies would like to see these cooperatives broken ‘up. so that appellants, would be obliged to go into the open market’ and purchase insurance of thein. It seems strange that ® the Court of: Appeals would invoke a technicality to re- verse the well- -reasoned opinion of the Appellate Division e a > ~ f ” 34 in order to prevent this reasonable cooperation among business .men to lighten the-charge upon. business, where there is no public to be protected and -no one is asking. to be protected against the use of his own -credit and business standing and the saving it gives to. him. ~This is particularly true’ during the present period when “many ~ ‘small business men are struggling for existence. “We assert that cooperation among business men based“upon mutual confidence and trust ought*to be encouraged instead of discouraged or prevented altogether. Authorities cited by Trial Term on isgue of jurisdiction In making a case for jurisdi¢tion in New: ‘York State the Trial Term cited two tax cases,-referred to below, and . Osborn v. Oelin, 310 U.S. 53. Not one of these cases was ' mentidned by either the Appellate. Division or the Court of Appeais. In citing the tax cases the Trial Term over- looked the principle that although taxation in a sense is= eregulation, the right to tax does not carry with it the right to regulate. ‘The power to regulate includes the power to restrain or prohibit altogether, whereas in the case of taxation, the non-résident insurer escapes the prohibition . by paying the tax. This distinction is recognized by Mr. "9 Justice Holmes in the first of these cases, Equitable Life . Ass’n. Soc. v. Penn, 238.U. S. 148, 147, where he said: : ‘“‘The fact that the state could not prevent the . contracts, so far as that may be true, has little bear- ' ing upon its right to consider the benefits :thus an- nually extended into Pennsylvania in measuring the — _ yalue of privileges that. it does grant.”’ : And the same judge in his dissenting opinion in the second case, Compania de Tabacos v. Collector, 275°U. S. 87, 100, said: . It readily may be seen . that a state inay tax things that under the Constitution as interpreted it wannot _ prevent.’’ ; 35 “It is irrelevant that under these. cases a state may tax . a licensed foreign insurer and. measure the tax by con- tracts entered into outside of the state, where either the insured, or the property, or both, are in the state, and the ‘eqntracts are to be performed: within the state. But if this . were a-tax case the authorities cited, would still be inap- posite because here there is no performance i in New York. - In taxation cases the license is of course. important be- _eause-the taxis the price charged for it. _ relied upon by the Trial Term for its adverse conclusion regarding: jurisdiction, suit was brought by thirty-four non-resident casualty companies who maintained an elab- orate agency system in the State of Virginia. Paragraph (7), (a) of the complaint filed ‘i in the District Court alleged in effect the doing of dbusiness for the purpose of regula- tion by averring the making of contracts within the State of Virginia, the language being that “Each agent plaintiff . * * * has countersigned for his respective company er companies large numbers of contracts covering in Vir- ginia some of which were produced outside of ¥irginia and some in Virginia. * ° * Dué’to the frequency of said countersignatures the aggregate value of the services of ‘ each agent plaintiff has been very great, though the value - of furnishing a single countersignature was trivial.’’ This doing of business was also reflected in tlie finding of the District Court (#9 F. Supp. 71) that, ‘‘Customarily, con- tracts produced outside of Virginia have been counter- ‘signed by the general agents and branch office managers s, without cémpensation.’’ It goes without saying that coun- tersigning and delivering the policies within the state, . being the last effective acts to give the contracts validity, made them Virginia contracts. The District Court also found other facts that independ- ently of the foregoing constituted the doing of business in Virginia, including the finding that ‘‘The companies em- \ > Se In Osborn v. Ozlin, 310 U. S. 53, the case —principally Siok 36 ploy. field supervisors to stiniulate and guide the activ ities. - of loeal producers, to accept or reject orders for contracts ~* ° from producers, to underwrite, prepare and check con- tracts, to collect premiums’ and generally to represent the ‘company in a- particular territory. The two major classes of: field supervisors are: (a) The general agent. © °° °¢ . In Virginia, the general agents produce the bulk of the” _ local business. -(b) The branch office manager or salaried — —eompany representative who has the-same—powers—and— duties as the general agent, but is compensated by a salary and receives no commission for producing business. When- ever a branch manager negotiates a policy directly with an - . assured, the rule of the National Aésociation of Insurance -\ Agents, in which most insprers have acquiesced, requires that the contract be closed through one of the mancger’s commission agents who is’ paid the full producer’s com- ~ mission. “The manager’s function is to develop his terri-— tory through ordinary producing agents and to supervise e and assist them in the. production of desirable business” = 7 (italics supplied),—all m Virginia. This Court cay toe the above findings of fact in their entirety. ‘In addition to all this, the contracts,” anne the tai company agency system used by these conipanies, were performable Within the staté. An elaborate system of ‘*servicing’’ was maintained by these companies; casualty suits were defended within the state and losses were ad- justed and paid therein by the stock company adjusters. Other “activities within the state were directed toward: enforcing compliance.at all times by the companies ahd - assureds with the ‘‘network of legislation (which). controls. the surety and casualty business in. Virginia’ (310: U..S.- 63). Virtually everything pertaining to the business of casualty insurance in this. myriad of ramifications was done within the state, and this Court assumed the doing of busi- ness within Virginia which the plaintiffs did not dispute: The. examples of. proper cases for state supervision given PaA ; aoe in thé opinion. all presuppose the existence of “Yariedictjon ‘to. regulate (310 U. S. 65,°66). There was no claim in the Osborn case that the statute requiring the coutitersigning of policies. within the state was invalid. Plaintiffs had been doing this enormous miss, of business ‘within Virginia over a period of years and had submitted to the jurisdiction of the state to ‘regulate its contracts, and the requirement that the-policies be counter- - signed within the state was part of the system of regula- tion plaintiffs had submitted to. There was no attempt by Virginia to secure jurisdiction over the policies through ‘the requirement of countersignature, and the complaint, in which three countersigning resident agents joined, al- " leged compliance. therewith. The sole griev apee was that that part of the . Virginia statute. was is_uficonstitutionat |__ which: forbade—a—salaried . representative countersigning - policies of insurance, but required the countersigning resi- dent agént to colléct all -premiums paid thereunder and _ keep not less than fifty per cent of the commissions. paid _ by the company. for procuring the business, : The contention was made that because of the large com- missions provided for the countersigning resident agent 3 by the challenged statute, insurance costs outside the state - ‘would be increased and hence Virginia in effect would ‘be. . tegulating matters beyond her jurisdiction, but this Court disposed of. this argument by saying that ‘‘The mere fact ’ that state action may have repercussions beyond state lines is of no judicial significance so long ag the action is not. within that domain which the Constitution forbids’’ (310 U. S. 62). Because of all this business. done within the state ‘‘ Virginia‘ has taken hold of a matter within her " power’? (310 U. S. 62). _ That the State of Virginia recognizes the inapplicability of the ,countersignature statutes to reciprocal insurance is shown by Sections 4235-c and°4340- of the — ” ; 38 ° Code, which specifieally except reciprocal insurance from the operation of the statutes providing for countersignature. — A eC Port II. Equal Protection of the Laws. The following sections are invalid and inapplicable because ‘they deny to. appetiante ‘the: equal, protection of the laws. - Section 412, ‘Subsection 1. Section 417, Subsection 1. " Séction 418, Subsection 1. Section 412, subsection 1.(Appendix A), prohibits the Subscribers from making ‘‘any new agreement for insur- _ ance’? who do not’ have net assets in an amount not less .than ten thousand dollars. The statute also provides that - _ {before renewing a contract of insurance with a Sub- seriber’’ similar proof of financial responsibility shall be required unless the Subscriber has accumulated the operat- | ing reserve required by Section 418, subsection 1, herein- after discussed, that is, twice the amount of the ‘annual. __ premium’’ (the term being improperly applied to the initial _ deposit) or the Subsgriber’s pro rata share, determined | on the’ basis of ‘‘annual premiums ‘in force’? ‘of one-half. of one per cent of the aggregate insurance in force. Thus a canner or. wholesale grocer who does not ave . net assets in excess of ten thousand dollars is forbidden ° to insure any new stock of goods, new equipment, new | building or ad-lition, or the -like, although he would be _ permitted to renew a contract on subject matter covered ° by a previous contract if he had the operating reserves “required by Sertion 418, subsection-1. Although the great majority of contracts entered into are on new subject — ’ matter (stocks of‘ canned goods and groceries), neither group builds\up reserves which meet the requirements of. | x a . ae s~ ¢ ° | Section 418, sebsettion 1, so as to ‘alow them the privilege of Fenewing their outstanding contracts (R, 63, 64). Thus / all Subscribers not worth the sum of ten thousand dollars” _- or over are prohibited from carrying their own insurance. Such Subscribers constitute a ‘great number”’ of the entire “membership i in both groups (R. 79). The undisputed evi vi-~ dence is that Section 412,. subsection J, is simply an ‘arbi-_ trary provision that denies to the small busiggss man the | right to carry his’ own insurance, .and that over \thirty - years’ experience has proven that no ‘neeessity exists for such a provision (R. 79 *The Trial Térm found (R. 176) the said section invalid on the ground Ahat it. denies. to the > gmall- ‘business man .the right--to,secure this insurance. “The Court of Appeals i in reversing did not even deem the tights of ‘the Subscribers i in this regard worth mentioning. Truly this is legislation based on a ‘‘man’s mere prop- . etty status,’’ which, ‘‘ out more, cannot be used by a state to test, qualify,”or limit’’ the -rights ‘of citizens. (Edwards v. Califorfia, 314 U. S. 160, 184.) There is no relation whatever,etween the requirement of this statute : , and the ability ofa Subscriber to pay a liability arising out of his insurance contract. Thus a Subscriber having net assets of $12,000 would be permitted - ‘unlimited insur- ‘ance and could incur a liability far’i in ‘excess of his worth, while ‘a Subscriber worth only $8,000 would be barred from ‘carrying any insurance, or assuming a liability therefor of .even one dollar. Other instances - showing the glaring dis- crimination of this.section could also be’ given. ‘It seems clear that this statute denies to appellants the _ equal protection of the laws. i! 4 Frost v. Corporation Commission, 278 U. 5. 518, /, @&: ‘Louisville Gas & E. Co, v. Coleman, 277 U. S. 32, | Cotting v. Godard, 183 U.S. 79, 109, 111, 112. ‘Engel v. O’Malley, ag. U. S. 128, 138. ‘ e . ‘. “% ; 40 . a @ Another objection to Section 412 2, subsection 1, is that no similar requirement is made for members of matual * ‘fire insurance companies or persons desiring to i insure their property in any insurance company. . Seetion 418, subsection 1 (Appendix A) referred to above, requires each Subscriber to build up an operating reserve | by deducting each year not less. than. one-quarter of his ‘‘earnings ag an underwriter’? until he has accumulated - the greater of these-two sums: (a)*Twice the amount of _ his premium, or (b) his pro ratasshare of an aggregate re-. _ serve of one-half of one per cent. of the egate amount:~ of insurance in force. But there is tio premium in this CO. operative insurance,nor has the provision for ‘earnings as an underwriter’’ any. application to appellants for the _ obvious reason that they have no such earnings. Instead; the unused portion of the deposit to which the Subscriber has retained title thra§ghout is returned to him each year. “Section 418, subsection 1, if applied to appellants would require the building up of unnecessarily large reserves. _ For over thirty years the present system of accumulating and maintaining reserves has proven adequate. to meet all losses, expensés and contingencies. The reserve require- ments of this section are new. No other: state requires. ‘them. There. are no comparable requirements for insur- ance companies (R. 81, 82). In-holding the statute to be | discriminatory, ‘the Trial Term stated that if New York imposed similar requirements on stock companies it would ~ - put a great many of them out ef business (R. 177). More over, the statute creates a joint liability as to ‘these re- serves—anathema to appellants’ plan. — , Section’ 417, subsection 1 (Appendix A), seine to require. appellants to amend their contracts and Powers . of Attorney so that they ‘‘shall provide for a contingent | - several liability for assessment of the ‘Subscriber as an inter- insurer on the risks ‘of every other Subscriber in an’. ag : , 41 . 4 ate (nto amount not less than otie Yor: more than ten times the ‘amount ‘of and in addition to the annual premium expressed in such contracts of insurance issued to the Subscriber by the reciprocal. insurer.’? But Section 345, subsection 1 ‘(Appendix B), of the Insurance Law relating to mutual fire insuratice companies provides no limitation: whatever to the contingent liability of members of a mutual company. To impos: Section 417, ‘subsection 1, upon appellants would require them to remake their system. Here the liability of a Subscriber is one entire liability, definite and certain: The Subscriber must pay his several, separate, fractional share of all losses and expenses at all events, and limitation upon this liability would ‘be inconsistent with the theory of the system. In contrast the term ‘‘contingent | liability’? implies two liabilities,—a fixed liability. to the extent of the deposit and an additional liability, contingent on the happening of some event not specified. The term - obviously has no application to this self-insurance. The _ use of the word ‘‘aéssessment”’ in the. statute as applied . to the case at bar is also without meaning. . _ Nor could liability be limited, as- proposed by Section 417, subsection 1, without destroying the present plan (RB. 81). This is the uncontroverted evidence. The statute would hybridize appellants’ insurance“with old line isur- ance. There is no premium or other amount of any designa- tion “expressed i in such contracts,’’—can be none. Inthe . very nature of things the cost cannot be determined until ~ the end of the period of coverage. .-Appellants’ initial deposit is made for convenience only. . The reserve requirements of Section 418, subsection 1, _ - as compared with the reserve requirements for insurance _ companies, is a denial to appellants of the equal protection _ of the laws. Likewise the requirements of Section 412, — ~ ° subsection 1, and Section 417, subsectien 1, as ‘compared = “s (poe ee = ° 7 - with members of mutual fire apa is a denial to appel- lants of equal protection of the laws.” Concordia Fire Insurance Co. v. linois, 292 U.S. 535, 545, 549. . Hartford. Steam Boiler Ins. Co. ¥. Sheahan 301 « . ; U.S. 459, 461. Mayflower Farnis v. Ten Eyck, 297 U. S. 266, 272, @ 274. , Frost v. Corporation Commission, 278 v. S. 515, §22. Louisville Gas and E.. Cox. Coleman, 277 U. S. 32, 37. : McFarland v. American cue Refining Co., 241 U. 8. 79, 86.° Point Il. . - Unreasonable Regulation. : . The statutes are invalid and inapplicable on the ground of unreasonable regulation. : In addition to violating the equal protection of the laws clause, each of the above three statutes is invalid and in- applicable as unreasonable and. discriminatory regulations and prohibitions. The other statutes will now be con- sidered in relation to the due process clause on the ground — _ of unreasonable regulation: The following authorities ik: ~ * lustrate the general principles applicable. Nebbia v. New York, 291 U. S. 502, 525. McLean v. Arkansas, 211 U. 8. 539, 548. C. B. é Q. R. Co. v. McGuire, 219 U.S. 549, 589. Truax v. Corrigan, 257 U.S. 312, 332, 333. 43 Section ‘130. "Section 422, Subsection 2. We contend t t the construction given Section 130 (Ap- . - “pendix A) by the Court of Appeals /does violence to the. plain-meaning of words:because it emasculates the section of the- condition precedent to its application, to- wit, that - the foreign insurer ‘‘shall in this state issue, deliver or - otherwise effectuate any contract of insurance,’” and sub- stitutes therefor ‘‘doing business here,’’ as defined by’ the Court of Appeals, The effect of this construction being to confirm the jurisdiction of the State of New York over: appellants’ contracts, we maintain that Section 130, as now . construed, is invalid as an extraterritorial usurpation | for- ..bidden by the due: process clause.” ° In general all risks fall into two classes: (a) The fac: ‘tories and warehouses|of canners and the stores and ware- houses of wholesale grocers; (b) Stocks of canned goods and groceries. The contracts | in relation to the first class : of risks are simply reriewed from time to time. In the second class, new contracts are issued on inventories: as- they- accumulate. The ‘‘turn-over’’ of these inventories is frequent: When a Subscriber receives a new stock he simply telephenes, wires or writes the office in Chicago toy cover the goods. ‘There is never any. difficulty. The par- ties do not deal at arm’s length; on the contrary, a rela- tion of mutual trust and confidence exists. Therefore transactions are frequently informal. If a mistake should be made it is easily corrected. . There is nothing in the . relation of appellants to require the superintendence of an ‘ outsider—at twenty-five per cent: additional cost to the Subscriber. . : : | Moreover, these being highly ‘specialized risks, only a professional insurance engineer is qualified to ‘service’ _ them. Ordinarily the resident. agent wonld. not be so = a i af oa i | ay qualified (R. 76, 77).. And the risks being limited to one or two in particular vicinity inorder to eliminate the ~ conflagration hazard, it would be impracticable for the ' so-called resident agent to visit Ahem. © This the evidence | shows’ 4 ® %. h: >) See nalts Section 130 should ‘be read with Section 499, subsection 1 (Appendix A), which requires the maintenance of at least .. One office in the State of New York. Section 110, subsec- ‘tion 3 (Appendix B), requires. the agent to be a soliciting agent compensated on a commission basis. We believe that one of the reasons for demanding that appellants cause. their contracts to be-countersigned by a residetit agent is to secure commissions to the local agents. Manifestly the — agency system’has no place in this self-insurance; it would arbitrarily adi approximately twenty-five per cent (R. 75) to the cost.' It is not denied in the- record that the enfore- ~.ing of Retions 130 and 422, subsection 1, against appel- — lants, would result in the ultimate destruction of the system -(R. 77, 83).- We assert that the statutes aré harsh, arbi- trary; and unreasonable regulations. : ¢ = ‘de 168, Subsection 2. as ; This statute (Appendix A) provides that ‘‘no policy or - contract of fire insurarice * * * shall be made, issued or- ‘delivered * * * on any property ‘in this state, unless it shall conform ‘in all particulars’? to the standard fire in- surance policy of the State of New York. The present section was repealed after the commencement of this liti- gation, and a. hew statute enacted, to take effect July 1, 1943 (Ch. 900, Laws 942). The new statute carries ‘forward the same general objection as the present statute. .The question is whether appellants are to be permitted -. to make‘such changes in the New York standard policy us | are necessary under their system of inter-insurance. Obvi- 1. See O'Gorman € — v. as se be Fire Ins. ‘Co., 282 U.* S. 251, 255 et seq. ; : t 45 ously the statutory form of policy was prepared for insur- ance corporations, and, the adaptation thereof -to appel- lants’ use has required many changes. Thus at the top of the first page of the. contract (Exhibits 7, 9; R. 59, 228, 935) is substituted a paragraph containing a full descrip- _tion of the individuals, partnerships, and corporations who exchange the contracts. Next, the contract as adapted incorporates the Power of Attorney. Becatise a premium or ptcp for this insurance cannot be stated, the ustial language relating to premium has ‘been ¢liminated, and the consideration stated is the exchange of insurance by the Sabscribers. his is of-the very essence of the insur- ance, and the requirement t#&t a premium be stated’ is carried forward in the new statute. Toward the bottom . of the same page of the policy is substituted another full paragraph setting forth the several nature of the Sub- scribers’ liability and the manner in which it is deter- > amined. ’ The contracts required to be used therefore cannot _ be made to ‘‘conform in. all particulars’’ to the form pre- scribed without completely destroying the plan of insur- ance. The Trial Term (R. 176) permitted-sufficient -lati- - ‘tude to make the statute workable. We contend that the statute is void because unreasonable, arbitrary, and ca- pricious, as well as because of lath of jurisdiction. - Section 410, Subsection 1: “” Section 415, Subsection 1(d). The first of these’ statutes (Appendix A) jas to do with the ‘“‘advigory committee’’ which, subject to the Articles of Association and Subscribers Agreement has ultimate powers of management. The Trial Term held that since appellants’ Power ot Attorney is in negatien of such power , the provision is rendered meaningless (R. 176). The Court _ of Appeals did not dissent from this construction. Section . 415, subsectio# 1(d) (Appendix A) provides for a ‘method - 46 \ of electing advisors not unlike the one used by the canners group but differing from the one used by the wholesale grocers. As to'the latter group the statute is one more | unnecessary regulation ,(R. 80): ; P - ‘9 Section 415, Subsection 1. ° The statute (Appendix A) requires s bscribers ’ to - execute and &cknowledge the Power of Attorney “fy a tiati- ner sufficient for the acknowledgment of conveyances. of real-property to be recorded in the state in which such Sub- scriber is domiciled.”” The statute is of nation-wide ap-. plication and it is difficult to instance a clearer case of extraterritorial legislation. New Subscribers cannot be ac- cepted by any such loose method as would ever admit of a forgery or mistake in identity. It is a cumbersome and burdensome regulation, being unreasonable, arbitrary, and capriciaus (R: 80). “i Section 413, Subsection 2. ‘. Section 418, Subsection 3. > tes Section 420. Section 413, subsection 2 (Appendix A), requires the ac- cumulation of a special contingent surplus, or guaranty — _— surplus, at the rate of one per cent of the. insurers’ net premium income for each such year until A minimum sur- plus of at least 250 thousand dollars is built up (Seetions 411, subsection 4,,and Section 341, subsection 1(a) (Ap- * pendix B)). The statute also provides that the fund thus accumulated shall not be impaired except upon liquidation. Not that appellants .do not have reserves in. excess of © the requirement of Section 41°, subsection 2..-The 1939 statement. of Warner.Reciprocal Insurers (Exhibit 11; B. ), 247) shows reserve funds in exeess of 400 thousand dollars, exclusive of unreturned savings of 228 thousand dollars, while the corresponding statement .for Canners a ce - Exchange Subscribers (Exhibit 12; R. 65, 255) shows re- serve funds i in. excess of 2 million dollars, exclusive of 850 thousand dollats of ‘unretuyned savings; and the reports of the convention examinations of the National’ Conyen- tion of Insurance Commissioners made in 1937 (Exhibits . 18, 19; R. 72, 284, 300) show the accuntulated reserves sub- - stantially in excess of the minimum requirement of Section © 413, subsection 2, ‘but these reserves are of a totally dif- ferent kind from those purported to be required by said Section 413, subggction 2. The reports of examination commend the ‘‘excellent’’ cash position of both ‘groupe (Id.). : Our: reasons for dialtonsind Biition 413, subsectién 2,°— are as follows: It is a fundamental principle of this self- - insurance that each Subscriber retain title to all deposits and otfier-funds, and that no one Subscriber’s funds be used, ta pay the liability of another Subscriber, that is to say, that no joint liability be imposed, and that upon with- drawing from the plan a Subscriber shall get his money back. The statute, however, seeks to interpolate into the Power of Attorney provisions wholly subversive of this | principle of several, separate ownership of the funds. Thus ‘the statute provides that the surplus may not be ‘‘im- — paired’? by ‘‘dividend distributions’’ to the Subscriber or _ by refunds or returns of continuing or retiring Subscribers’ ‘reserves or deposits except in the event of liquidation, and for the building up of reserves ‘‘at the rate of one per cent of its net premium income.’’ The ‘Trial Term held that, a premium is alien to this insurance, ‘‘and the plaintiffs may not be compelled to introduce (into the poli¢y) such false provision.”’ ( R. 175, 176.) Nor is there any measure by which. tnese reserves are to be built up. The statute also refers to ‘‘dividends”’ to Subscribers,’ with the provision / against ‘‘impairment’’ by “dividend. distributions,’’ which /_ plainly is not applicable except by .a‘loose analogy to the return of the unused portion of the deposit as a saving. 48 2 5 o - The worst feature of the statute is that it would eliminate the separate individual ownership of the funds making up the aggregate surplus and substitute therefor a joint fund. Thus title to the reserves would pass out of the Subscriber. Upon -the Subscriber’s- withdrawal, the money would not ‘be returned to him. In over thirty years of experience the Subscribers have never been obliged to fall back upon the reserves to pay.a single loss or other obligation — (f. 285), and any reserves built up under Section 413, ‘subsectior2> would .probably constitute a permanent fund. Only in-. solvency or liquidation would rescue the fund from per- — manent alienation; even then it would not be returned to the Subscriber. ,; .¢) The above considerations also apply to Section 418, sub- - seétion 3 (Appendix A), held invalid: by the Trial. Term (R. 177), and to Section 420. . “In challenging. these statutes uppellants believe that they present no mere question of legislative policy, but a question of statutes actually prohibiting the continued ex- istence of the system (R. 79, 80). To save this self-insur- ance is the reason the instant litigation was commenced: Moreover, appellees admit that no necessity exists for mak- - ing the fundamental changes required by these sections. We contend that Sections 413, subsection 2, 418, sub- section 3, and 420-are invalid onthe ground of unreason- able regulation, as well as on the ground.of lack of jects. diction. ware or ‘Sechion 421. This statute ( Appendix A) deals with accounting pro- cedure. In so far as it requires the Attorney-in-Fact to maintain a separate account for each Subscriber, it cor- responds. with appellants’ plan and no objection is made. But in attempting to apply such terms as ‘‘premiums earned by him—as-an—underwriter”’ and ‘‘operating re- serves’’, both of which are alien to appellants’ inter-insur- ance, this section must fall with Section 418, subsection 1, ae 49 as unreasonable regulation, as well as for lack of jurisdic: tion (R. 82, 83). . -Pomr IV. Conclusion. | It has been said that the present tendency of ‘the deci- | sions of this Court is to allow the states a wider latitude than heretofore in legislation concerni orety Toca alias matters. We believe the necessary corollary to this view is that state legislation should be examined with increased — ‘serutiny to make certain that, in. the exercise of these _ broader powers, the state has not been guilty” of exceéding the beunds of its jurisdiction or of denying rights guar- anteed by the equal protection of the Jaws clause. _ The practical effect.of the New York statutes under con- — sideration is to deny to all citizens of the United States in ange of New York fhe right to_carry their own insur- For if appellants were forced te comply -with. the | Yew “York statutes their cooperative insurance plan would | cease to be, and some entity type of insurer, the precise na- ture of which is not certain, would be’ substituted. If it be - required ‘that the. insurance contract. state a premium or price charged for the insurance, if joint liability. be sub- stituted for the present several liability, if ‘the individual ownership of the funds be eliminated, if the agency system be forced on these groups—then appellants’ system of inter-insurancé as it is known today will have passed out of existenc® and one of the finest examples of cooperation . among American business men will have become but a memory. | 7 | We pray that the judgment, of the Court of Appeals of the State of New York be in all things reversed. Respectfully submitted, Feasxus D. Tevesiso, Cras R. Jonxsox, ; ee I for Appeltant:. . - . . .? . . . . . . ‘ » ‘ eg ae a ciel me —— ; . » z E . os . \ - i ; . | e - 8 : os . . Z : e . ve . ‘ . * . . . i « Se . ? : m ; - ’ 3 ‘ a . . e , 3 ? ° . . ; e., . . . : © ° bd ; ° . 3 c ¥ i - . . 4 = is a . , = “ . $ . . . ° ° . . F e . -_ mm APPENDIX A. | Statutes Sued Upon. (Showing in italics particular provisions alleged.) Insurance ‘Law of 1939 of the State of New York: Section 40, sussection 4, ‘(Objectionable portion re- * pealed during pendency of this litigation.) Section 130, sussection 1. ‘Except as provided in sub- section two, no licensed foreign or-alien insurer shall in “this state issue, deliver or otherwise effectuate any con- tract of insurance covering either persons resident in “this state or property situated in this state, or covering any risk incident to the performance or non-performanée of any’ _ contract or obligation to be performed in this state, or © covering any risk incident to any ‘obligation or duty -which is governed by the laws of this state though actually to be performed elsewhere, unless such contract of insurance is. - _tssued or effectuated through, or countersigned by, a.resi- dent licensed insurance agent of this state. Within the meaning of this. section, a licensed individual insurance -agent shall be deemed to be resident. in this state. if he has his domicile or his principal place of business in this state, and a licensed corporation insurance agent shall be deemed to be resident in this state if it maintains a law- fully established place of business in this state; and a - licensed firm or association insurance agent shall be deemed . to be resident in this state if it maintains an established — place of business in this state.’’ | Section 168, sussection 2. ‘‘No policy or contract of fire insurance, including a renewal of such policy or contract, shall be made, issued or delivered by any ixsurer or by any agent ‘or representative thereof, on any property in this state, unless it shall conform-in all particulars as.to oo 52 size of type, as to location of blank spgces, and as to all provisions, agreements a conditions, with such printed blank form of policy (the standard form of the National Convention of Insurarice Commissioners; section 168, sub- section 1); and no other or different provision, agreement ‘or condition shall be in any manner made a part of such contract or policy, except as follows:’’ (Repealed as of July 1, 1943.) 7 re Section 410, sussection 1. ‘‘Within the meaning of this _ chapter the term ‘reciprocal insurer’ shall mean. any’ ag- gregation of persons, firms or corporations, herein called ‘subscribers,’ who or which under a common name engage in the business of inter-insurgnee or exchanging contracts of insurance on the’ reciprocal: plan through an attorney- in-fact having authority to obligaté the subscribers sev- ‘erally, within: such limits as may lawfully be specified in the power of attorney, oh contracts of insurance made with any subscriber as a policyholder through such attorney- in-fact acting on behalf .of all other subscribers. For the purposes of this chapter, the term ‘reciprocal ‘insurer’ shall include any reciprocal or inter-insurance exchange, by whatever name known, and any reference thereto as an insurer shall be deemed to mean any such aggregation of inter-insurers operating through«an attorney-in-fact in- dividually and collectively as an insurance organization for the benefit of its policyholders. The term ‘advisory committee’ as used in.this chapter, shall. be deemed to in - cludé any official body, by whatever name called, which is _ chosen by the subscribers of a reciprocal insurer, and which ' has, subject to the articles of association and subscribers’ agreement, ultimate power and responsibility in the man- agement and control of the affairs of a reciprocal insurer.” Section 412, sussection 1. ‘“‘No authorized reciprocal insurer shall make any new agreement for insurance with any person, firm or private corporation who or which does not have assets-in his, their or its own right in an amount wt less than ten thousand dollars in excess of liabilities, ss shown by a commercial agency report, as hereinafter provided, or by a sworn’statement on file with the attorney- in-fact, verified, by such subscriber or by an officer of a oration subscriber. Before renewing a contract of inauvaince with a a sub- _ swriber, similar proof of financial responsibility shall. be. required“unless the subscriber has accumulated and main- sins the subscriber’s operating reserve required by section four hundred eighteen. The report of an éstablished com. agency having one hundred thousand or more sub- «ribets shall be deemed presumptive evidence of the finan- ial condition of a subseriber.’’ Section 413, sussection 2. ‘‘ Every authorized reciprocal insurer, at the end of the first and every succeeding cal- t year following the effective date of this chapter, and | the case of a reciprocal insurer hereafter authorized, at end of each full calendar year of doing business in this te, shall accumulate and maintain a speciai -ontingent rplus, or guaranty surplus, by whatever name called, at. rate of one per cent of its net premium income for each h year as reported i in its annual statement, until such ingent surplus shall be at least equal to the amount of two hundred fifty thousand dollars). Such contingent — plus shall not .be impaired by dividend distributions or reyumde or returns 0 of continuing -or retiring subscrib- - ’ reserves or deposits except in the event of the liquida- of such reciprocal insurer under order of a court. such reciprocal insurer may set aside the entire amount the contingent surplus herein required or accumulate wh surplus at a rate in excess of that herein required; such contingent surplus, onée set aside, shall be there- er maintained unimpaired except as to the amount; if | , in excess of the\minimum surplus required by section hundred eleyen.”” = intmum surplus required in section four hundred eleven _ . - 54 ee : Section 415, sussEction 1. ‘‘Every’subscriber of an au. thorized reciprocal insurer shall have executed -a sub- seriber’s agreement, and every subscriber hereafter execut- ing such a subscriber’s agreement shall execute and duly acknowledge the same, in a manner sufficient for the ac- _ knowledgment of conveyances of real property to be recorded in the state in which such subscribers is domiciled; _and every subscriber’s agreement shall be identical in ternis, except as to the date and the name and address of the subscriber, with all other subscriber’s agreements cur. rently in force and effect with all.other subscribers of such- . reciprocal insurer. Every such subscriber’s agreement > shall contain in substance the following provisions: ae) ‘ e o 2 os e _@ (d) ‘A provision that there shall be an annual meeting of the subscribers, in person or by proxy, at a time and “place to be determined in accordance with such agreement,. of which each-subscriber shall be duly notified and at which each subscriber shall have power to vote in person or by proxy for all members of the serena committee to be chosen or appointed at’ such time.’ (e) “A provision specifying the powers aud duties of the advisory éommittee, which-shall include the power and — duty to regulate the compensation, powers and duties of the - attorney-in-fact, if ‘not specifically provided in the sub- scriber’s agreement, and shallélso include the power to- make regulations for the efféctive control and custody of the funds and investments of the reciprocal insurer:’ (Applicable only to Warner Reciprocal Insurers.) - Section 417, sussection 1. ‘‘Every. contract of insur- ance and ev ery power of attorney of the attorney-in-fact or subscriber's agreement under or by which covitracts of insurance are issued or exchanged by any authorized reciprocal insurer shall provide for a continge nt several ' liability for assessment ‘of the. subscriber as an inter-w- : surer on the risks of every other subscriber in an amount ~ > 55 not.less than one nor more than ten times the amount of. _and in addition to the annual premium expressed in such contracts of noupnace issued to the subscriber by the reciprocal insurer.’ : =, Section 418, sussection 1. ‘‘Every subscriber of an authorized reciprocal insurer shall be required to accu- mulate a minisnum operating reserve, to be credited to such snbscriber on the books and records of. such reciprocal in- surrer, by authorizing the attorney-in-fact to credit to sueh account at the end of the fiseal year of such recipro- cal insurer, an amount not less than ané. quarter of such subscriber’s earnings as an_underwriter ‘during such pe- ried. Such aceumulation shall be made if and at least #0 long as such subscriber’s operating reserve is less than the larger of the following amounts: ( a) Twice the amount of the an- ‘nual preminm or premiums in force as of such date on all policies issued to such subseriber by the.reciprocal insurer; - or (b) such subscriber's pro.rata share, determined on the basis of.annual premiums in force, of an aggregate oper- ating reserve for such reciprocal insurer equal to one-half of ome peytent of the agareante amount of fire insurance in force in such reciprocal insurer as of sueh date.’ “Ssetiqx 418, scasectioxn 3. “‘No subscriber shall hare a.secured ar preferred claim against any assets 6f the re- eiprocal insurer arising out of such operating reserve. but all assets held by such insurer shall be available for the payment of claims of policyholders and creditors of such reciprocal insurer im preference to any claim for with- drawal by a subscriber as such. Any sabseriher’s operat- ing reserve accumulated: by any such reciprocal insurer “shall be maintained at all times, exeept that a subseriher ‘may, upon withdrawal from membership and eancelatior of all insurance contracts held by-him in snech insurer, and after ziving to the attorney-in-fact written notice of with- _ drawal at least stxty days in advanee, withdraw the amonnt af his operating reserve less Jsuch surrender charges as ‘may be deducted pursuant to ‘the subscriber’s. agreement. No such ‘withdrawal shall be permitted after an order of — liquidation of, or the appointment of a receiver or liqui- dating trustee for, any such reciprocal insurer. »» _ Sercrion 420. “‘All. of the assets of any reciprocal in-, surer including subscribers’ operating reserves shall be liable. primarily for payment of all liabilities incurred un- der its policies or other contracts. No part of the surplus funds of such reciprocal insurer shall be subject to the | claims of general creditors of any of the individual sub- | scribers of such insurer until all policies under which any — such subscriber is obligated have been terminated and in ° no event be yond the amount of such subscriber's operating reserve, The contingent lability of subscribers for addi: tional premiums or assessments shall not be included as an ‘asset in the financial statement of a reciprocal in- surer. Subscribers’ operating reserves for which notice * of withdrawal has ‘been given shall be reported as liabili- - ‘ties until paid. In any statement or report of the financial. condition of a reciprocal insurer filed in this state, the sur. plus to ‘policyholders, after providing for the unearned premitim reserves, loss resérves and other Nabilities, as _ required by this "apter, shall be‘ reported as follows: 1. Special ‘contingent surplus; 2. Subscribers’ operat. . ing reserves; 3. All-other surplus, if any.”’ Section 421. ‘‘The attorney-in-fact, in addition tothe books of account of the: collective transactions of all sub- scribers of the. reciprocal insurer, shall keep and” maintain . “_--® separate account for each individual subscriber setting forth ‘the entries determining the operating reserve, if any, of: such subscriber. Each subscriber’s account. shall be credited with the premiums earned by him as an under: writer on the policies issued by the exchange, and charged with his proper share of all losses incurred. under such policies as well as with the cxpenses incurred by the in surer. Earnings and interest income from investments of ae 57 . all subscribers’ operatirig réserves , shall be apportioned and credited to subscribers .on the basis of their accumu- | lated operating reserves and all other interest and invest- ‘ment income may: be apportioned and credited to the sub- scribers on the basis of their premsians earned as under. writers.’’ Section 422, sussection 1. ‘‘The superintendent may, in his discretion, pursuant to section forty-two, issue 4a 7 license to a reciprocal insurer domiciled in, or organized under the laws of another state or of any province of the Dominion of Canada, to do in this state such kind or kinds» of: insurance business as a domestic réciprocal insurer , may be authorized to do in this state. Such foreign or alien reciprocal insurer shall comply with’ substantially the same requirements of this chapter which are applicable to domestic reciprocal insurers hereafter to be organized and authorized to do the same kind or kinds of insurance “business and in addition every such alien reciprocal shall . he subject to the provisions of this chapter relating to alien insurance companies authorized to do the same kind or kinds ‘of insurance business. ° Nothing herein contained ‘shall be deemed’ to require. that the attarney-in-fact of a foreign or alien reciprocal insurer shall be resident or domiciled in this state. or shall maintain his or its princi- _ pal’ office in this state, or shall be organized under the laws of’ this state; but every authorized reciprocal insurer : shall maintain at least one office in this state.”” : : 7 . 5 ‘a APPENDIX B. Statutes Indirectly Involved. Amendment of 1936 to the Insurance Law of the State ‘of New York: The Censolidated tow of New’ York Annotated, Book 21, Insurance. Law. _ Section 69, sussecTion-a. Issuance through resident-agents of insurance risks by certain for- eign imsurance ‘companies. “No insurance company or insurer organized or: existing under the laws of any other state or country shall issue or deliver any policy or make _ any, contract of insurance ‘on either persons or property. in this gtate, or covering any hazard or risk in.the perform- ance or non-performance of.any duty relative to any con- | tract or obligation, performed or to be perfornied in this . state, ,or in connection with any ‘obligation or duty which is governed or controlled by the laws of this state, but ac- tually to be performed by any individual, firm-or corpora- tion not resident in this state, ‘unless such policy or con- tract is issued “through or-countersigned by a lawfully con- stituted and licensed resident agent of this state, provided "nothing in this section shall be congtrued to apply to con- * tracts or policies of life insurance, or. to tertificates of fraternal benefit societies, or to insurance covering the rolling stock of any railroad or any vessel, airplane, or mo- tor bus aised in interstate commerce, or to property in. transit, or to reinsurance between companies. Insurance Law of 1939 of the State of New York: Section 41, sussecTion 3. The term ‘‘doing an insurance | business, ’” within the meaning of this chapter, shall be deemed to include (a) the making, as insurer, or prepovng to make as insurer, of any insurance contract, a ) the making, as guarantor « or surety, or the proposing to make . 59 8 / as guarantor. or surety, of any contract of guaranty or suretyship as a vocation and not as merely incidental to any other legitimate business or. activity of the guarantor or surety, and (c) the doing.of any kind of business, includ- ing a reinsurance business, specifically recognized as con- stituting the doing of an insurance business ,within the _ | meaning of this chapter and (d) the doing or proposing to. do any. business in substance equivalent to any of the © foregoing in a manner designed to evade the provisions of _° this chapter. | . \ Section 42. Requirements for foreign or alien insurer’s license. 1. Before issuing a license to do business, ex- cept by way of a renewal license; to any foreign or alien insurer the superintendent sliall require it to submit for filing a certified copy of its charter, and of its by-laws, if any, currently in force, and such other do¢uménts as may be necessary to show the kind .or kinds of business * which it is empowered-or authorized to do, and also a full ’ statement verified by two officers or responsible representa- tives in manner-as the superintendent shall prescribe, . _ showing its assets, liabilities and financial condition. The ‘superintendent may also require a full statement of its income and disbursements, business done, and other facts required ‘to be shown in the annual,statement of such an -insurer. Before issuing any such license the superin- | tendent may make an examination of the affairs of such insurer at its principal office within the United States, or he may accept in lieu thereof a report of an examination made by the insurance department or other insurance su- _ pervisory Official of any other state or of any government outside the United States. Before issuing any new or renewal license to any foreign or alien insurer hereafter applying for the same, the superintendent may require — satisfactory proof, either in the charter of such insurer or by an agréement evidenced by a duly certified resolu- tion of its board of directors, or otherwise as the super- 60 intendent may require, that such insurer will not engage in any insurance business in contravention of ‘the provi- sions of this section, nor any insurance business which it is not empowered or authorized to do by its charter. 2. The superintendent shall issue a renewal license to any foreign or alien insurer’if he shall be satisfied, by such proof as he may require, that such an insurer is not de- _jinquent with respect to any requirement imposed by this — chapter and that its continuance in business in ‘this state will not be hazardous‘or prejudicial to the best interests ‘p of the people of this state. 3. No foreign insurer shall be licensed to do in this state any kind of insurance business, or combination ‘of _ kinds of insurancé business, which are not permitted to be done by domestic insurers hereafter to be licensed ‘under the provisions of this chapter. No foreign insurer shall be authorized to do business in this state if it does in this state or elsewhere any kind of business, other than an _ingurance business and such business as is necessarily or properly incidental to the kind or kinds of insuranée busi- ness which it is licensed to do in this state. 4, No alien insurer shall be licensed to do in this state any - -kind of insurance business, or any combination of ‘kinds of insurance business, which are not permitted to be done by domestic insurers hereafter to be licensed under the provisions of this chapter. No alien insurer shall be authorized to do an insurance business in this state if it deés anywhere within the United States any kind of busi- ness other than an insurance business and such business as is necessarily or properly incidental to the kind or kinds of insurance business which. it is authorized to do in this state. gi 5. Except as otherwise specifically. pesshded in this chapter no foreign insurer and no United States branch of an alien insurer shall be or continue to be authorized to 61 do an insurance business in this state if it fails to comply . substantially with any requirement or limitation of this chapter, applicable to similaY-domestic insurers hereafter to be organized, which in the judgment of the superintend- - ent is reason@jly necessary to protect the interests of the people of this state. No-foreign insurer and no United States branch of an alien insurer which does outside of this state any kind or combination of kinds of insurance business not permitted to be done in this state by similar domestic insurers here- after: organized, shall be or continue to be authorized to do an insurance business in this: state, unless in the judg- ment of the superintendent the doing of such kind or com- bination of kinds of insurance business will not be prejudi- cial to the best interests of the people of this state. — This subsection shall not be deemed to affect. the require- ments of section forty or of: subsections one and two of -section one hundred ninety-three. Pee 6. Notwithstanding the provisions offbubssction three, | any foreign insurance company which has been licensed to do the business of life insurance in this state continuously during a period of twenty years next preceding the effec- tive date of this chapter may continue to be licensed, in the discretion of the superintendent, to do the kind or kinds . — of insurance business which it was authorized to do im- mediately prior to the taking effect of this chapter. ’ Section 90. Investments of foreign and alien insurers. 1. The superinterident may refuse a new or renewal li- cense to.any foreign insurer, if he finds that its invest- ‘ments do ‘not comply in Substance with the investment — requirements and limitations imposed by this chapter upon like domestic insurers hereafter organized to do the same kind or kinds of insurance busine The superintendent may recognize like securities of the home state of a foreign insurer as minimum capital inyestments in lieu of the 62 securities specified in paragraphs (b) and (4) of section seventy- nine. 2. No alien insurer shall be authorized to do- business in this state unless its general ‘state deposits and its trus- - teed assets comply in substance with the requirements and limitations of this chapter applicable to like domestic in-. ‘surers hereafter organized to do. the same kind or kinds of insurance business, exéept that foreign investments _ shall be allowed to the following extent only: (a) Bends, notes or other evidences of indebted- ness issued or guaranteed by the government of the - - country in which such alien insurer was organized or ‘by any _provirice or other major political subdivision thereof’ and: not in default as to principal or interest, may be recognized as reserve investments under see- tion eighty-one in an:amount not exceeding the mini- mum capital required of a “domestic stock insurer hereafter organized to do the same kind or kinds of ' Insurance business. (b)° Bonds, notes or einai valid and legally author- ized obligations issued, assumed or guaranteed by the Dominion of Canada or any province thereof ‘which are not in default as to principal or interest may be included in the trusteed assets of such alien insurer in an amount not exceeding ten’ per cent of the total _ admitted assets of the United. States eect of such insurer. : ~ Section 110, SUBSECTION 3. The term Pp reeetr agent” as used in this article, means any authorized or acknowl- edged agent of an insurer or fraternal benefit society, and any sub-agent or other representative of such an agent, who acts as such in the solicitation of, negotiation for, or — procurement or making of, an instirance or annvity con- tract, other.than as a licensed insurance broker; except. that the term ‘‘insurance agent’’ shall not include any regular salaried officer or. employee of a licensed insurer. - or fraternal benefit society or of a licensed insurance agent, who does not outside of an. office of such insurer or agent a cone 63. solicit or accept from the public applications or orders for any such contract, if such officer. or employee does not receive for his services a commission or other compensa- tion directly dependent upon the- amount of business. donc. Section 168, SyBSECTION 1. Fire insurance contract ; standard policy provisions; permissible variations; tem- porary contracts; combination policies; ‘mutual’? and. . “stock’’ required. 1. The printed form of a policy of fire insurance, adopted on the twelfth day of December, nineteen hundred sixteen by the National Convention of Insurance Commissioners (now known as the National As- - sociation of Insurance Commissioners) at ‘its meeting in the city of New York and heretofore filed by the superin- tendent in his office pursuant to section three of chapter four hundred forty of the laws of nineteen hundred seven- teen, together with such additions, omissions and modifica- tions, similarly adopted from time to time by said associa- tion, as may be approved by the superintendent, shall be “known and designated as the ‘‘standard fire insurance policy of the state of New York.” Upon the payment of - a fee of ten cents the superintendent shall furnish a true copy of such form to any person requesting the same. Section 341, sussection 1(a). Stock fire and marine _ insurance companies; .organization; powers -and financial requirements. 1. A stock company may be organized in the manner prescribed in section forty-eight and be 1li- ‘eensed to do an insurance business of the following kind or kinds, : as specified i in section forty-six, with the following requirements as to minimum paid-i in capital, and with an ‘additional requirement of paid-in initial surplus. in each instance at least equal to the amount of its paid-in capital, and every such company shall at all times thereafter main- tain a minimum capital at least equal to thet hereinafter specified : | . * (a) If organized to do the business, of fire insur- ~. agee, as specified in paragraph four of section forty- 64 ‘ six, it shall have a capital at least equal to two hundred fifty thousand dollers, and it may in addition do any one or more of the. kinds of business specified in paragraphs five, six, twelve, nineteen and twenty (ex- cluding insurance in respect to, appertaining to or in connection with, any and all risks or perils of naviga- tion, transit, or transportation, including war risks, . on, over or under any seas, and excluding insurance against loss. or damage and against liability for loss or damage, by reason of injury to the person) without having additional capital or surplus. | = Section 345, suBsection 1. Mutual fire insurance com- panies; contingent: ligbility; assessments; extraordimary reserve. 1.” Except as provided in section fifty-eight, ‘every domestic mutual fire insurance company shall in its .by-laws and policies prescribe the contingent mutual lia- bility of its members for the payment of assessments, in such a way that each member shail be liable to pay his proportionate share, subject to the limitations hereinafter specified, of the amount of any assessment or assessments necessary to make good an impairment of the minimum surplus of such company.- The contingent liability of a - member may be limited to an amount not less than one additional annual premium on each policy held by him. No such insurance company shall make, issue or -deliver ‘any policy of insurance, except. as provided in section fifty-eight, which does not prescribe the contingent liability of the policyholder. i in clear and explicit language printed in type not smaller than eight. point. Section 410, susszetiqn 1. Definition of reciprocal in- surer; doing business without license; licensing. 1. Within the meaning of this chapter the term “reciprocal insurer” -shall'mean any aggregation of persons, firms or corpora- tions, herein called ‘‘subscribers,’’ -who or which under a common name engage in the business of inter-insurance or exchanging contracts of insurance on-the reciprocal plan - through an attorney-in-fact having authority to obligate 65 . the subscribers severally, within such limits as may law- fully be specified in the power of attorney, on contracts of insurance made with any subscriber as a policyholder — through such attorney- in-fact acting on behalf of all other . subscribers.. For the purposes of this chapter, the term “reciprocal insurer’* shall include any reciprocal or inter- insurance exchange, by whatever name known, and any reference thereto as an insurer shall be: deemed to mean any such aggregation of inter-insurers operating thropgh an attorney-in-fact individually and collectively as an in- surance organization for the benefit of its policyholders. The term ‘‘advisory committee,’” as used in this. chapter, shall be deemed to include any official body, by whatever ‘name galled, which is chosen by the subscribers of a re- ciprocal insurer and which has, subject to the articles. of association and subscribers agreement, ultimate power and responsibility in the management and centrol of the affairs ofa reciprocal insurer. | Section 410, sussection 2. No, person, firm, corporation — or association as an underwriter or underwriters, and no reciprocal insurer, shall do any insurance business in this state; nor shall any person, firm, corporation or association _ as attorney-in-fact or other representative of any recip- rocal insurer do or cause to be done within this state any act which effects, aids or promotes the doing of an insur- _ ance business in this state by any reciprocal insurer, unless ~ authorized so to do pursuant to the provisions of this article. Section 411, suBsEcTIon 4. If within one year thereafter the superintendent finds,-after such investigation and ex- amination as he may see fit to make, that each subscriber - has deposited in cash with the attorney-in-fact an amount at least equal to the premium specifiefl in such declaration, and that a fund, at least equal to the amount of the mini- — mum capital required of a domestic stock insurance com- pany hereafter organized under the provisions of this 66 , 3 chapter to do the same kind or kinds of insurance business (Section 341, subsection 1(a)), has been: advanced by the subscribers as a minimum surplus for policyholders, and is: in the possession of the attorney-in-fact or invested subject to the control of the advisory committee, and that other requirements of this chapter applicable to such reciprocal insurer have been complied with, he may issue to such reciprocal insurer a license to do business. Section 414, eupsecTion 2. Every such existing recip- rocal insurer and every authorized foreign reciprocal in- surer, shall, within one year after the effective date of this chapter, have so revised its subscribers. agreement and its articles of association, if any, a8 to conform to the require- ments applicable to. reciprocal insurers hereafter to be - ‘organized under the provisions of this article. = © SSA --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386403_0127%3A4. Public record. Not legal advice.