McNall v. Metropolitan Life Insurance

The opinion of the court was delivered by Smith, J.: It is insisted by counsel for defendant in error that the law set forth in the statement was given retroactive effect by the collection, under its authority, [697] of taxes from the insurance company for the year 1899, based on business done in 1898, and that, in fact, the tax was on insurance written before the law was passed. With this contention we do not agree. Section 4 empowers the superintendent of insurance to revoke the license of any company that shall fail to comply with the requirements of the law for thirty days after January 15. As we interpret the act, it has for its purpose the annual collection of a two-percent. tax on the amount of. business done in this state by foreign insurance companies as a condition to their right to continue to transact business here. With this object in view, section 2 of the law, which requires a sworn statement to be made by such companies of the amount of all premiums received in the state during the year ending December 31 preceding, was inserted to cover cases like the present, when the company had been doing business in this state before the passage of the act. While it is a principle of statutory construction that laws are to be so interpreted as to give them a prospective rather than a retroactive effect, this rule is not infringed by sustaining the method employed, which the law authorizes, of ascertaining the amount of tax to be paid by computing it from the volume of business done in the preceding year by the company sought to be charged. The penalty prescribed for the failure on the part of a foreign insurance company to pay the tax is that the superintendent of insurance shall revoke its license to transact business. In this case, if the interpretation put on the law by the insurance company is the correct one, it might have continued to carry on its business here throughout the year 1899, to January 15,1900, without the payment of this tax, and, on the last date, have withdrawn from the state, and the su [698] perintendent would have been powerless to coerce payment of the amount due. The tax collected ih 1899 was not levied on business done in the previous year. The amount of the premiums collected during ¡the year before was used as a basis for determining the amount the company ought to pay for the privi-lege of writing insurance in this state for the subsequent year. Counsel complain that the law is unjust. The regulation of the right of foreign insurance companies to transact business in this state is admittedly within the power of the legislature, and, in our opinion, nothing more was sought to be done by the passage of the law in question than to make the payment of this tax a condition precedent to the right of the company to transact an insurance business here after January 15, 1899. The judgment of the court below will be reversed and a new trial ordered. All the Justices concurring.