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argued that the statute conferring personal jurisdiction on the court was
unconstitutional. In upholding the statute and reciting the minimum contracts
that the defendants had with the State of Iowa, the Supreme Court of Iowa
reasoned: "This situation is a little like a marriage: While it was [the in‐state
company] who proposed, the [out‐of‐state company] accepted, and the
resulting relationship makes it relatively insignificant which party started it all."
Missouri State ex rel. Missouri State Life Ins. Co. v. Hall, 330 Mo. 1107, 52 S.W.2d 174
(1932). The court upheld the constitutionality of the liquidation provisions of
the insurance code, and the insurance commissioner's authority to initiate such
proceedings.
New York
Attorney‐General v. North America Life Ins. Co., 82 N.Y. 172 (1887). The New
York court of appeals found that an insurance company was not
unconstitutionally deprived of its property without due process, as the
insurance code gave the insurance company the right to be heard before the
state courts.
In the Matter of the Application of the Attorney‐General of the State of New
York v. The North America Life Ins. Co., 82 N.Y. 172 (1880). The court held that
the provisions of the insurance code which allow for "arresting the business of
a company, when its further prosecution will be injurious to the public interest"
and permit the appointment of a receiver do not deprive persons of their
property without due process of law.
Oklahoma Cockrell v. Grimes, 740 P.2d 746 (1987). The insurance commissioner, as
receiver of an insolvent carrier, was sued by an agent to secure payment of
commissions on renewal premiums for policies issued by the insolvent carrier.
In ordering payment of the commissions, the Court of Appeals of Oklahoma
opined that the language of the agent's contract with the carrier provided the
agent with a vested right to the commission portion of the premium collected
by the receiver. The court noted that, "protection of the policyholders of an
insolvent insurer may not be done at the expense of the vested property rights
of another private citizen." 740 P.2d at 749.
Authority to Initiate Proceedings
Seventh Circuit
Cook v. Illinois Banker's Life Ass'n., 46 F.2d 782 (U.S.C.C.A. Ill. 1931), cert. denied
52 S. Ct. 12, 284 U.S. 627, 76 L. Ed. 534. Policyholders of a life association sought
injunctive relief against an insurance association and insurance company and
requested the court to appoint a receiver and set aside the reinsurance
contract between the association and the insurance company. The court
stated that such relief could only be granted to "... the Attorney General on his
own motion or ... by the Auditor of Public Accounts..." and thus held that the
policyholders had no right to maintain the action.
Cullam v. Traders' Ins. Co., 163 F. 45 (7th Cir. 1908). Illinois statute authorizing
voluntary dissolution of insurance company upon application of majority of
shareholders is constitutional.
Daniel v. Layton, 75 F.2d 135 (7th Cir. 1935), cert. denied, 295 U.S. 753 (1935).
Claimants were held not to be entitled to have property sold and affairs of
company liquidated and thereby frustrate the reinsurance plan and defeat
rights of policyholders, whose claims were about fifty times as great as those
of claimants.