108 Kan. 257 | Kan. | 1921
The state brings this proceeding to require the superintendent of insurance to pay into the state treasury certain sums of money paid under protest to him on a disputed interpretation of certain provisions of statute governing the right of fire insurance companies chartered in other states and in foreign countries to transact business in Kansas. These insurance companies are made defendants, and they assume the burden of the defense, the superintendent merely taking the attitude of awaiting an authoritative interpretation of the pertinent law governing his duty in this matter.
The statute reads:
“Every insurance, guaranty and accident company or association not organized under the laws of this state shall, as hereinafter provided, annually pay a state tax upon all premiums received, whether in cash or in notes, in this state, or on account of business done in this state, for insurance of life, property or interests in this state, or guaranty companies, at the rate of two per cent per annum, which amount of tax shall be assessed by the superintendent of the insurance department, as hereinafter provided.” (Gen. Stat. 1915, § 5467.)
“Every such company or association shall, on or before the 15th day of January in each year, make a return, verified by the affidavit of its president and secretary or other chief officers, to the superintendent of the insurance department, stating the amount of all premiums received by said company, whether in cash or notes, in this state, during the year ending on the 31st day of December next preceding. Upon receipt of such returns the superintendent of the insurance department shall verify the same, and assess the taxes upon the various companies on the basis and at the rate provided for in section 1 of this act, and proceed to collect the same from the insurance companies and cover the same into the state treasury.” (Id., § 5468.)
“Every insurance, guaranty and accident company or association organized under the laws of any foreign country shall, as hereinafter provided, annually pay a state tax upon all premiums received, whether in cash or in notes, in this state, or on account of business done in this state, for insurance of life, property or interests in this state, or guaranty companies, at the rate of four per cent per annum, which amount of tax shall be assessed by the superintendent of the insurance department as hereinafter [hereinbefore] provided.” (Id., § 5469.)
The defendant insurance companies which have been impleaded file answers in which it appears that it is their custom, as soon as they accept fire insurance risks and issue policies to their insured patrons therefor, to cede a part of such in
We think not. Once the two-per-cent or four-per-cent tax on all premiums received on account of fire insurance business done in this state is paid, there is an end of the matter. While the state and its insurance department may have a proper interest in this general subject of reinsurance, may question or supervise the business policy, prudence, foresight, economy, and the like, of these elaborate schemes of apportioning and dividing the liabilities and premiums received therefor among companies associated in these “treaty” compacts, yet the statute under which the tax is imposed does not concern itself with these matters. The person who obtains the insurance protection and who pays the premium therefor has no direct
It must therefore be held that when the proper percentage, two or four per cent, of the premiums collected for insurance business done in this state is paid to the superintendent of insurance, the statute is fully satisfied; and there is no further lawful demand upon the defendants for additional percentages of those premiums on the mere division of them among other companies which by contract undertake to aid or indemnify the insuring company in carrying the risks for which the premiums were originally paid.
This simple and obviously correct interpretation of our statute renders it unnecessary to consider whether the- statute, if susceptible of another construction, would reach the premiums divided under these reinsurance contracts if all the business pertaining thereto were transacted outside of this state. We note, however, that the courts which have had to consider that aspect of the matter, as well as the phase of the question which we have discussed, have uniformly arrived at the conclusion that the premiums collected for insurance are subject only to one toll by the state, not successive tolls as the insuring companies’ liabilities are apportioned or reapportioned under reinsurance arrangements. (See State v. Continental Ins. Co. [Ind. App.], 116 N. E. 929; In re Continental Casualty Co. [Iowa], 179 N. W. 185; People v. American Central Ins. Co., 179 Mich. 371.)
The state suggests that if this interpretation of the statute be the correct one, we should also hold that the entire tax should be paid by the original insurance company which collected the premium. This seems to be a matter lying wholly within the sound administrative discretion of the superintendent of insurance, and he can require it to be paid in the most direct, convenient and accurate way for the efficient conduct of his departmental business.
Writ denied.