American Sur. Co. v. Jones

Decision Date11 November 1943
Docket NumberNo. 27076.,27076.
Citation51 N.E.2d 122,384 Ill. 222
PartiesAMERICAN SURETY CO. et al. v. JONES, Director of Insurance.
CourtIllinois Supreme Court

OPINION TEXT STARTS HERE

Petition for review by American Surety Company and others against Paul F. Jones, Director of Insurance of the State of Illinois, to set aside an order and decision of the defendant granting renewal of a certificate of authority to underwriters at Lloyds London to transact business in Illinois. From a judgment of the Appellate Court, 316 Ill.App. 197, 44 N.E.2d 762, affirming a judgment of the circuit court dismissing their petition, plaintiffs appeal.

Judgment affirmed.Appeal from Appellate Court, Third District, on Appeal from Circuit Court, Sangamon County; Lawrence E. Stone, Judge.

Gillespie, Burke & Gillespie, of Springfield (Edmund Burke and George B. Gillespie, both of Springfield, of counsel), for appellants.

George F. Barrett, Atty. Gen. (John F. Spivey, Jr., of Springfield, of counsel), for appellee.

FULTON, Justice.

The plaintiff-appellants, seventeen in number, are foreign insurance companies authorized to conduct a surety business in this State. They filed a petition in the circuit court of Sangamon county on July 26, 1941, seeking to review certain orders and decisions of the Director of Insurance entered on July 1, 1941. The order about which they complain granted the renewal of a certificate of authority to underwriters at Lloyds London to transact business in Illinois. The appellants had filed on June 7, 1941, with the Director of Insurance, their petition opposing the renewal of said certificate of authority and further asking that they be heard by the Director in support of said petition. At the time the Director issued the said certificate of authority he further held that the appellants were not proper parties to be heard on objections to the issuance of such certificate.

The petition filed by the appellants in the circuit court alleged that on June 7, 1941, they filed a petition with the Director of Insurance stating that underwriters at Lloyds had not complied with certain provisions of the Illinois Insurance Code in that said underwriters have not maintained in Illinois cash or securities of a character conformable to the requirements of section 125 of the Illinois Insurance Code (Ill.Rev.Stat.1941, c. 73, § 737) for domestic companies at least equal at all times to the minimum of admitted assets required by article V of the said Illinois Insurance Code for a domestic Lloyds doing the same kind or kinds of business and asking that the appellants may be heard in opposition to the issuance by the Director of a certificate of authority to the underwriters to transact insurance business in the State of Illinois during the year beginning July 1, 1941; that the issuance of a certificate to the underwriters would cause the appellants to be aggrieved thereby; that on July 1, 1941, the Director issued an order and decision that the underwriters at Lloyds London had qualified under the pertinent provisions of the Illinois Insurance Code and further expressed his opinion that the issuance of a certificate of authority to a company is a matter of compliance with the law by the applying company, and that other companies licensed to do the same kind of business are not proper parties to be heard on the application of the applying company, and that at the same time the Director issued a certificate of authority to the underwriters at Lloyds.

The appellants alleged that they are aggrieved by this order and decision and prayed that the order and decision of the Director be set aside and that the certificate of authority issued to Lloyds be declared of no force and effect.

The Director moved to dismiss the petition of the appellants for review, assigning various grounds, all of which finally resolve themselves into the question as to whether, under the provisions of section 407 of the Illinois Insurance Code, the appellants were parties aggrieved within the meaning of said section and thus proper parties to invoke the jurisdiction of the court.

The trial court sustained the Director's motion to dismiss and, on February 16, 1942, dismissed the petition of the appellants, holding that they were not such companies or persons as may have a review under section 407 of the Insurance Code and that an aggrieved company or person within said section is one directly affected and not indirectly or consequently affected. On appeal to the Appellate Court, Third District, the judgment of the trial court was affirmed. Petition for leave to appeal to this court was allowed.

It is the contention of the appellants that:

1. Under the terms of section 401 of the Illinois Insurance Code, the Director of Insurance has the power to conduct such examinations, investigations and hearings in addition to those specifically provided for as may be necessary and proper for the efficient administration of the insurance laws of the State; that this section, therefore, empowered and required the Director to conduct the hearing requested by the appellants.

2. That under the terms of section 407 of the Illinois Insurance Code the appellants are companies or persons aggrieved whose interests are adversely affected and, having complied with the requirements of the code, acquired the right to transact insurance in the State of Illinois to the exclusion of companies not so complying.

3. Statutes giving the right of review should be liberally construed so as to allow the public and any other interested party to intervene. The legislature did not intend to and could not deprive the courts of the judicial power to inquire as to whether the Director, in the issuance of a certificate of authority to Lloyds acted within or beyond his jurisdiction.

For a proper determination of the questions involved, it is necessary to set forth pertinent provisions of the Insurance Code.

Section 121 (Ill.Rev.Stat.1941, chap. 73, par. 733) makes it unlawful for anyone to do an insurance business in Illinois without a certificate of authority from the Director of Insurance.

Section 111 (Ill.Rev.Stat.1941, chap. 73, par. 723) provides that: ‘Before a certificate of authority to transact business in this State is issued to a foreign or alien company, such company shall satisfy the Director that * * * (d) * * * if a Lloyds it meets the requirements of Article V.’

Section 401 (Ill.Rev.Stat.1941, chap. 73, par. 1013) provides in part: ‘The Director is charged with the rights, powers and duties appertaining to the enforcement and execution of all the insurance laws of this State. He shall have the power * * * (b) to conduct such investigations as may be necessary to determine whether any person has violated any provision of such insurance laws; and (c) to conduct such examinations, investigations and hearings in addition to those specifically provided for, as may be necessary and proper for the efficient administration of the insurance laws of this State.’

Section 114 (Ill.Rev.Stat.1941, chap. 73, par. 726) so far as material to this case, provides for the renewal of a certificate of authority as follows: (1) The Director shall renew for one year the certificate of authority of a foreign or alien company on the first day of July of the calendar year following the calendar year in which it is admitted to transact business in this State and annually thereafter, without application by the company, upon payment of the annual privilege tax imposed by this Code, if any, provided the Director is satisfied that (a) none of the facts specified in this article as grounds for revoking a certificate of authority exists; and (b) the company is complying with the conditions for admission, except for surplus requirements in excess of those which similar domestic companies transacting the same kind or kinds of business are required to maintain. (2) Except in case of non-payment of taxes, the Director shall give notice of his intention to refuse to renew the certificate of authority of a foreign or alien company and the grounds therefor at least twenty days before the end of the term for which the existing certificate was issued, and, the company shall be given an opportunity for a hearing before the end of such term.’

Section 407 (Ill.Rev.Stat.1941, chap. 73, par. 1019), relative to court reviews of orders and decisions, provides: (1) Any order or decision made, issued or executed by the Director, except an order to make good an impairment of capital or surplus or a deficiency in the amount of admitted assets, whereby any company or person is aggrieved,...

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