State ex rel. Covenant Mutual Benefit Ass'n v. Root

Cassoday, J. The relator claims to be a beneficiary association furnishing life insurance upon the assessment plan, organized under the laws of another state, within the meaning of ch. 418, Laws of 1891, and that as such it is entitled to a license to do business within this state, upon complying' with the conditions of that chapter. The defendant, as commissioner of insurance, being in doubt as to the true construction of the chapter, at first hesitated as to -whether such license should be issued, and finally, after considering the matter for some time, and on June 26, 1891, he gave or assumed to give to the relator temporary parol .permission to engage in such business until further — 680 — notice. From July 8, 1891, to December 22, 1891, a discussion was carried on between the relator and the defendant, which finally terminated in the issuing of a license to the relator; dated back to June 26, 1891, and which, by its terms, would expire March 1,1892; and for which the relator paid the sum of $25. Prior to the expiration of that license, the relator filed with the defendant its annual statement, as required by the act. March 3, 1892, the defendant, in a letter sent to the relator, acknowledged the receipt of the statement so sent, and stated, in effect, that the same had been “fully examined and found satisfactory;” that “the taxes and fees are as follows: Filing annual report, $10. On receipt of this amount, your company will be promptly licensed.” The sum so named was then paid by the relator, and thereupon a second license was issued by the defendant to the relator, dated back to March 1,1892, but limited to expire April 15,1892. Before the issuing of that license it was mutually understood between the relator and the defendant and attorney general that an amicable suit should be commenced in'this court, in order to secure a construction of said ch. 418, Laws of 1891, and this suit was commenced accordingly. It is to be regretted that the language of the act is not sufficiently explicit to preclude doubt on the part of the administrative officers of the state. Undoubtedly the legislature has the authority to prescribe such conditions and restrictions upon foreign insurance companies doing business in this state as it may see fit to impose. State v. United States Mut. Acc. Asso. 67 Wis. 629; Stanhilber v. Mutual Mill Ins. Co. 76 Wis. 291, and cases -there cited. As indicated in these cases, such “ legislation does not pertain to matters of interstate commerce, nor the privileges or immunities of citizens in the several states,” but is a matter of state policy, resting entirely in the discretion of the legislature. We are only called upon, therefore, to — 681 — ascertain, if possible, the intention of the legislature as expressed in the act in question; and, of course, whatever may be the result, it is subject to immediate change or modification by that body, which is about to assemble. The general laws in respect to life insurance corporations, as contained in the Revised Statutes of 18Y8, are found in secs. 1947-1955, and which corporations will, for convenience, be herein designated as “regular life companies.” By cb. 204, Laws of 1879, “ the secret, beneficiary, charitable, and benevolent orders ” therein specifically named, being thirty-six in number, are thereby “ declared not to be life insurance companies in the sense and meaning of the general laws of this state relating to life insurance and life insurance companies, and such societies, orders, and associations are, and shall hereafter be, exempt from the provisions of said general laws;” and such orders are, for convenience, herein designated as “ exempt life associations.” Those provisions respecting such exempt life associations remained substantially the same down to 1889, except that other similar orders were from time to time, by amendments of the act, added thereto,, until the number so specifically named exceeded seventy, as will appear by the citations in 1 S. & B. Ann. Stats, sec. 19535/ and since that time another has been added by ch. 441, Laws of 1891. By ch. 334, Laws of 1889, all so-called “ fraternal assessment insurance corporations ” doing business in this state, and included in those designated above as “exempt life associations,” were thereby required to report to and be under the jurisdiction of the insurance commissioner, as therein prescribéd; otherwise to be excluded from doing business in the state, and their oflncex’s and agents subjected to punishment. 1 S. & B. Ann. Stats, secs. 1955a, 1955b. By sec. 4, ch. 418, Laws of 1891, all beneficiary corporations, societies, orders, or associations theretofore organized or incorporated in this state, or admitted to do business' therein — 682 — under the provisions of said act, and all such “ exempt life associations,” are thereby “ declared to be mutual benefit associations, and exempt from the provisions of the general insurance laws of this state,” and thereby made subject only to the provisions of said act; and by sec. 5 of the act every such “ mutual benefit corporation, society, order, or association,” as thus defined in sec. 4, is required to report to the insurance commissioner as therein prescribed. Thus it appears that all such specifically named “ exempt life associations ” were required by law to report to and be under the jurisdiction of the insurance commissioner. Ch. 418, Laws of 1891, was published and went into effect May 9, 1891, and is entitled “An act to regulate mutual, beneficiary and fraternal corporations, societies, orders, and associations providing insurance on the assessment plan.” Prior to that enactment there does not appear to have been any general law in this state for the organization of such fraternal or beneficiary corporations, societies, orders, or associations furnishing life or casualty insurance or indemnity upon the mutual or assessment plan, nor for the licensing of foreign associations of the'character indicated, to do business in this state. Sec. 1 of the act prescribes the manner in which such corporations, societies, orders, or associations might thereafter be organized or incorporated in this state; and provides that whenever one is so organized and “ approved by the commissioner of insurance, he shall issue a certificate authorizing ” the same “ to engage in the business of insurance on the assessment plan set forth in said articles of incorporation or constitution and by-laws,” and the same thereafter is lawfully entitled to transact business in accordance with said act. Sec. 2 of the act provides, in effect, that “ no fraternal or beneficiary corporation, society, order, or association furnishing life or casualty insurance or indemnity upon the mutual or assessment plan, organized under the laws of any other state, . . . — 683 — nor any voluntary fraternal or beneficiary corporation, society, order, or association having its principal place of business outside of the state of Wisconsin, and not ” then included in such “ exempt life associations,” “ shall transact business in this state, until it has- filed with the commissioner of insurance ... of this state an application for admission, upon a form prescribed by the commissioner of insurance; setting forth” the several things therein mentioned. Such application appears to have been duly made and filed by the relator prior to May 11, 1891, as found by the trial court in its sixth finding, mentioned in the foregoing statement. The proviso in that section is merely for the purpose of relieving the applicant from certain conditions here present, and need not, therefore, be considered. Sec. 3 of the act provides, in effect, that upon such application being so made the insurance commissioner shall investigate the character and standing of such applicant, and, if the same is approved by him, and such conditions have been complied with, he shall notify such applicant of his approval; whereupon such applicant shall appoint in writing such insurance commissioner to be its attorney, upon whom all legal processes may be served; and, such “ conditions having been complied with, the commissioner of insurance shall issue to such” applicant “a license, after which it shall have authority to transact business in this state; and said license shall continue in force until revoked in accordance with the provisions of this act.” As found and indicated above, such investigation was had, and such appointment and approval were made.' The final refusal to continue such license appears to have been based, as found by the court, principally upon the alleged agreement by the relator in Exhibit C to pay the assured a definite sum, and at the same time fixed an absolute rate of assessment upon its members beyond which the company could not go. But this seems to be fully an — 684 — swered by another clause of the findings, to the effect that the relator does not have what is known as a “ legal reserve,” but merely an “ emergency fund; ” and “ reserves the right in its contract to increase or lower the rates of assessment specified in said contract as the basis of assessment, according as the needs of the corporation may demand or permit.” Among the conditions required by sec. 2 of the act, and contained in this application, is that the relator “ has accumulated a fund equal in amount to one assessment upon all its members, and that said accumulation is permitted by the laws of the corporation, and that said funds are safely invested as provided by the laws of the state where organized, and can only be used as provided by the laws of such state.” Such accumulation is expressly authorized by sec. 11, ch. 418, Laws of 1891, which appears to have been copied from the Illinois law under which it was secured to the relator. Besides, as found by the court, to remove the objection of the defendant to such admission of the relator, the latter did, March 13,1892, lawfully amend its rules and regulations, and modified its form of certificate and contract, so as to expressly authorize it to levy an assessment beyond the amount named in its table; and thereupon the relator’s constitution, by-laws, rules, and regulations, as amended, and such new form of contract, were filed with the defendant, and a demand made upon him to issue such license; and since that time the relator has used such new form of contract. It seems to us that the relator is a beneficiary association furnishing life insurance upon the assessment plan, within the meaning of the act in question. The mere fact that the relator was authorized to receive calls or premiums in advance does not destroy its character as such insurance association. It sufficiently appears that- at the time of the application the laws of Illinois did not prevent the admission of fraternal or beneficiary corporations, societies, or — 685 — ders, or associations, organized under the laws of this state, except as under the same or similar restrictions as provided in the act in question. See note to this case in 19 L. R. A. 271. — Rep. It is contended that the admission or exclusion of such foreign association is wholly discretionary with the insurance commissioner. It is true the law requires him to investigate the character and standing of such applicant; but when, as here, he finds, upon such investigation, that the conditions named in sec. 2 of the act have been complied with, then he is thereby required to notify such association and issue a license to the same. In other words, the law regulates the conditions upon which such foreign association may do business in this state, and upon complying with the conditions they have a right to the license. The relator may, at its option, take the license as. of April 15, 1892. By the Court. — A peremptory writ of mandamus is hereby directed to be issued in accordance with the prayer of the relator’s petition.