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Michigan Daniel v. Citizens' Mutual Fire Ins. Co. of Jackson, 149 Mich. 626, 113 N.W. 17
(1907). Where an attorney of creditors of a mutual insurance company
procured the resignation of the liquidator receiver and the consent of a third
party to act as such, and induced the commissioner of insurance to petition for
the third party's appointment, and the attorney acted for the third person as
receiver, and there was no understanding that the third person should do
anything to favor the creditors, it was held not to warrant the setting aside of
the orders accepting the resignation and appointment of the third person
upon an action of the company's stockholder.
Gauss v. Central West Casualty Co., 266 Mich. 159 253 N.W. 252 (1934). The
court held that although judgment creditors of an insolvent insurer were
entitled to intervene in a suit by the insurance commissioner to take over the
company's assets, such intervention must be in subordination to the
commissioner's petition and order thereon.
Minnesota
Mississippi
Missouri
State v. Educational Endowment Ass'n of Minneapolis, 49 Minn. 158, 51 N.W.
908 (1892). The Attorney General brought suit against an insolvent insurance
company, and the company argued that the statutory procedures, which
required a report from the insurance commissioner to the Attorney General to
the effect that the insurance company should not transact business, were not
followed. The court held that the procedures outlined in insurance insolvency
statute were not the exclusive method for proceeding against an insolvent
insurance company. The court held that an insolvent insurance company may
be proceeded against under general corporate laws which allow the district
court to enjoin a company from exercising any corporate rights on complaint
of the Attorney General, or on the complaint of any creditor or stockholder.
Sanders v. Neely, 197 Miss. 66, 19 So.2d 424 (1944). The court held that there
was no inconsistency between the right of a stockholder to inspect the books
and records of the company and the rights conferred on the insurance
commissioner by the insurance code. The commissioner does not examine the
company for information for the stockholder but to determine the company's
financial soundness. This examination takes place periodically, whenever the
commissioner deems it prudent or upon the request of five stockholders, or
five others pecuniarily interested in the company, who submit an affidavit with
their reasons for believing the company is unsound. The court pointed out
that the stockholder cannot make an affidavit of unsoundness without access
to the facts of unsoundness. The powers given to the commissioner to
suspend the licenses of insolvent companies, of those failing to comply with
the law or of those hazardous to the policyholders or public and to request
court appointment of a receiver are to protect the interests of policyholders,
creditors and the public, not the stockholders. The court stated that the
statutes were not intended to deal with the relation between a company and
its stockholders or to require the commissioner to deal with the internal affairs
of a company unless it was unsound.
Ainsworth v. Old Security Life Ins. Co., 685 S.W.2d 583 (Mo. App. 1985). In
denying the sole shareholder's application to intervene in receivership of an
insolvent insurance company, the court noted the shareholders of an insolvent
insurer do not have the right to notice and the right to participate in every
matter coming before the receiver or the liquidation court. Further, the
intervention statute in Missouri based on the statutory language was
construed to not allow intervention under the circumstances. It was noted
that the shareholder had been designated an "interested party" and in fact
was receiving notices of all proceedings and had been allowed in every