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period the policy shall remain in force nor until a copy of the form thereof has been filed at least thirty days with the insurance commissioner, and has been approved by him.

SECTION 2. If the insurance commissioner refuses to approve the form of policy aforesaid, he shall notify the proper officer of said company, with a statement of the reasons of said commissioner for the refusal of his approval; and said company may, within a reasonable time after the receipt of such notification, petition the supreme court to review the said action of the insurance commissioner.

Insurance against bodily injury or death by accident and upon the health of individuals is authorized by St. 1907, 576, § 32, as amended by St. 1908, c. 248, which provides that:

Ten or more persons residents of this commonwealth may form an insurance company for any one of the following purposes:

Fifth, To insure any person against bodily injury or death by accident, or any person, firm or corporation against loss or damage on account of the bodily injury or death by accident of any person, or against damage caused by automobiles to property of another, for which loss or damage said person, firm or corporation is responsible, and to make insurance upon the health of individuals.

It is well established that the Legislature may prescribe a standard form of policy for any one or more of the kinds of insurance authorized under the section above quoted, or may enact substantive provisions for all policies (New York Life Insurance Co. v. Hardison, 199 Mass. 190; Hewins v. London Assurance Corporation, 184 Mass. 177; Quinn v. Fire Association, 180 Mass. 560; Boyden v. Massachusetts Masonic Life Assn., 167 Mass. 242; St. 1907, c. 576, §§ 60, 91 and 93), and may empower the Insurance Commissioner to pass upon and approve or disapprove both the form and substance of insurance policies submitted to him, in regard to such standard form or to any other requirement of law, vesting in the court the authority to review such finding upon petition of any company aggrieved thereby. Aetna Life Insurance Co. v. Hardison, 199 Mass. 181; Provident Savings, etc., Society v. Cutting, 181 Mass. 261; St. 1907, c. 576, § 75.

It is to be observed, however, that the authority of the Insurance Commissioner to approve or disapprove the form or substance of a policy of insurance, in the cases above cited, rests upon some statutory declaration of the essentials which such policy shall contain, and that the function of the commissioner is to determine, as a ministerial officer and in the management of the details in the administration of the law, whether or not such policy conforms to the requirements of law, his determination being subject to judicial review. New York Life Insurance Co. v. Hardison, supra, p. 197.

With respect to the kinds of insurance here under consideration, to wit, accident, health and disability insurance, the Legislature has not established any standard form of policy, nor directed what in substance the contract shall contain; and in approving or disapproving any policy submitted to him under the provisions of section 1 of the proposed statute, the Insurance Commissioner must act upon his own unguided judgment, discretion and experience. In other words, the act in effect authorizes the Insurance Commissioner to establish such standard form or forms as he may deem applicable or proper in the premises, without in any particular indicating what shall be included therein. An authority so sweeping cannot be deemed to be the mere working out of details under a legislative act, or determination of facts upon which the application of a law has been made to depend, or discretion in its execution (see Commonwealth v. Sisson, 189 Mass. 247), but is rather an authority to make or change the law itself. In other jurisdictions, where no standard form or other requirement has been established for ́contracts of insurance, a power vesting in the Insurance Commissioner, or some other officer with like duties, to formulate and prescribe the nature of such contracts, has been held to be unconstitutional as a delegation of the legislative authority to a ministerial officer. King v. Concordia Fire Insurance Co., 140 Mich. 258, 268; O'Neil v. Insurance Co., 166 Pa. St. 77; Anderson v. Assurance Co., 59 Minn. 182; Phoenix Insurance Co. v. Perkins, 19 So. Dak. 59; Dowling v. Insurance Co., 92 Wis.

To the Insurance

73; and I see no reason to doubt the application in this Commonwealth of the principals so established.

I am therefore of opinion that section 1 of the proposed act is unconstitutional, for the reason that it purports to delegate to and vest in a ministerial officer authority which may be constitutionally exercised only by the Legislature itself. Constitution of Massachusetts, Bill of Rights, Article XXX.

I may add that in my opinion section 2 of the proposed act is objectionable upon like grounds, since it purports to impose upon the Supreme Judicial Court duties which are ministerial and not judicial in their nature. Case of Supervisors of Elections, 114 Mass. 247.





A Massachusetts cor ration maintaining a department store, which, in combination with certain other corporations, persons and co-partnerships within and beyond the Commonwealth, has given to a resident in the State of New York a power of attorney to make contracts of insurance in its behalf with each of such other corporations, persons and co-partnerships which all of the other corporations, persons and co-partnerships bear a proportionate and distinct liability, is transacting the business of insurance within the provisions of St. 1907, c. 576, § 3, which provides that "a contract of insurance is an agreement by which one party for a consideration promises to pay money or its equivalent or to do an act valuable to the assured upon the destruction, loss or injury of something in which the other party has an interest . . ." If, however, such contracts are made in the State of New York, and no act in connection therewith is done within this Commonwealth, such corporation is not engaged in the business of insurance within the Commonwealth.

You ask my opinion upon the question whether or not a Commissioner. Massachusetts corporation maintaining a department store for

1909 April 23.

the sale of dry goods and other merchandise, upon the facts stated by you, should be held to be engaged in the business of insurance, and with respect thereto subject to the regulations and restrictions imposed by the laws of the Commonwealth upon the conduct of the business of insurance.

Upon the facts submitted it may be assumed that the corporation in question, and other persons, copartnerships and corporations within and beyond the Commonwealth, have given to a person resident in the State of New York their several powers

of attorney which authorize such person to make contracts of insurance with each of such persons, copartnerships and corporations, in which all of the other persons, copartnerships and corporations shall bear a proportionate and distinct liability. By the powers of attorney so given an association has been created for the purpose above stated, which is managed and directed by a committee of five, representing those who have executed such powers of attorney, which committee has the power to disqualify and close the account of any member of such association; to maintain a general supervision over the acts of the attorney in fact; and to take charge of money received by him, subject to the deduction of his compensation, and to invest the same.

Upon these facts two questions are presented; first, whether or not the transactions above described constitute the business of insurance as defined by the provisions of the laws of the Commonwealth; and, second, if such transactions do constitute the business of insurance, whether or not such business may be regulated in accordance with the insurance laws.

No difficulty is presented by the first question. St. 1907, c. 576, § 1, provides that:

In this act, unless the context otherwise requires:

"Company" or "insurance company" includes all corporations, associations, partnerships or individuals engaged as principals in the business of insurance.

Section 3 provides:

A contract of insurance is an agreement by which one party for a consideration promises to pay money or its equivalent or to do an act valuable to the assured upon the destruction, loss or injury of something in which the other party has an interest, and it shall be unlawful for a company to make a contract of insurance upon or relative to any property or interests or lives in this commonwealth, or with any resident thereof, or for any person as insurance agent or insurance broker to make, negotiate, solicit or in any manner aid in the transaction of such insurance, except as authorized by the provisions of this act or the laws relating to "fraternal beneficiary corporations" and "assessment insurance." All contracts of insurance on property, lives or interests in this commonwealth shall be deemed to be made therein.

The transaction of the corporation in question, in my opinion, clearly constitutes the business of insurance. The corporation by its authorized agent receives a contract of insurance under which, in case of loss, each member of the association is severally and distinctly bound to pay a proportionate part. Such corporation, also through its agent, makes with each and every other member a similar contract, upon which it in turn is severally liable for its proportionate share of the total amount of insurance provided for in such contract. It follows that the corporation, through its agent, has made as many separate contracts of insurance as there are persons, copartnerships or corporations which have filed powers of attorney with the common agent; or, in other words, it has participated in separate contracts of insurance equal in number to the total number of such powers of attorney. It is to be observed that this is not the case of a corporation which insures in a mutual insurance company, thereby binding itself by a single contract to pay assessments wherever loss is incurred by any member of the company; the distinction being that in such case there is but a single contract, providing for the payment of such assessments as may be necessary, while here the corporation has written as many separate contracts of insurance as there are members of the association, and it will continue to write additional and separate policies as often as new members are admitted thereto.

I am confirmed in the view already expressed by section 91 of chapter 576 of the Acts of 1907, which provides for the regulation of associations of individuals who conduct the business of insurance in the manner known as Lloyds, "whereby each associate underwriter becomes liable for a proportionate part of the whole amount insured by a policy."

Upon the second inquiry a more difficult question is presented. Although it is not specifically so stated, I assume that the contracts made under authority of the power of attorney given by the corporation in question are made in New York, that payments upon them by way of premiums or other charges and payments of losses are there made, and that no business is in fact conducted within this Commonwealth. This being so,

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