Armed Forces Co-op. Insuring Ass'n v. Department of Ins.
| Decision Date | 31 December 1980 |
| Docket Number | No. 5274,5274 |
| Citation | 622 P.2d 1318 |
| Parties | ARMED FORCES COOPERATIVE INSURING ASSOCIATION, Appellant (Petitioner), v. DEPARTMENT OF INSURANCE, State of Wyoming, Appellee (Respondent). |
| Court | Wyoming Supreme Court |
James C. Logan of James C. Logan & Associates, Kansas City, and Ward A. White of Guy, Williams, White & Argeris, Cheyenne, for appellant.
John D. Troughton, Atty. Gen., Gerald A. Stack, Deputy Atty. Gen., Crim. Div., and Samuel A. Soule', Sr., Asst. Atty. Gen., Cheyenne, for appellee.
Arthur A. Aparicio, Jr., Lieutenant Colonel, U. S. A. F., amicus curiae, and Franklin J. Smith, Cheyenne.
Before RAPER, C. J., McCLINTOCK, THOMAS and ROSE, JJ., and ARMSTRONG, District Judge, Retired. *
This is an appeal from a judgment of the district court entered January 24, 1980, affirming an order of the Insurance Commissioner entered December 27, 1976. The Commissioner's order assessed $5,000.00 and a 21/2% premium tax against appellant, Armed Forces Cooperative Insuring Association (hereinafter AFCIA or the "Company" or the "Association") for 1975 and ordered it to desist from further collection of insurance premiums upon various Wyoming risks until it had obtained a certificate of authority from the Wyoming Department of Insurance.
An administrative complaint was filed against AFCIA September 15, 1976, by Merle Johnson, Assistant Insurance Commissioner, which alleged that the Company was transacting insurance business within the State of Wyoming without the benefit of a certificate of authority, in violation of § 26-3-105 1 and § 26-32-109 2, W.S.1977, and had not paid a premium tax to the State of Wyoming on insurance written on Wyoming risks, as required by § 26-4-103, W.S.1977 3. Service of the complaint and ten-day notice of the hearing was mailed to Fort Leavenworth, Kansas, where the Association has its headquarters.
At the Commissioner's request, the insurance contract of Lt. Col. Arthur J. Aparicio, Jr., Amicus Curiae, was cancelled and his full year's premium returned to him by the Association under protest and without prejudice to contest such action. There are eight other policies like the Aparicio policy presently in full force and effect in Wyoming. On October 28, 1976, AFCIA filed its Special Appearance and Motion to Dismiss on multiple grounds herein urged. The Insurance Commissioner overruled this motion, whereupon AFCIA filed its Special Appearance and Special Answer preserving all objections to in personam jurisdiction over AFCIA and the statutory and constitutional power of the Commissioner to conduct such hearing and to regulate and tax AFCIA and to subject it to civil penalties. The hearing resulted in an order favoring the position of the Commissioner.
AFCIA's petition for review was duly filed and the case was heard in district court at Cheyenne, Wyoming, May 8, 1978, whereupon additional testimony and exhibits were received. Lt. Col. Arthur J. Aparicio, Jr., a member of AFCIA, appeared as Amicus Curiae by consent of the court.
AFCIA is an unincorporated "Non-Profit Military Association" organized in 1877, with its headquarters continuously located on the United States Military Reservation at Fort Leavenworth, Kansas, where, it contends, it has its only offices, agents 4 and employees. The Association comprises some 88,000 active and retired members of the armed services. 5 On the many military reservations around the world, AFCIA is organized, authorized and designated by both the Department of the Army and Department of the Navy (including the Marine Corps) as an official "Non-Profit Military Association." It is also recognized by the Department of Defense as a "Non-Profit Military Association."
The Association is physically headquartered on property owned by the United States, and is regulated by an executive committee of five members who are senior officers on active duty at Fort Leavenworth. Although elected by the membership, these officers must obtain written approval of their Commanding General at Fort Leavenworth and they serve on the executive committee at his pleasure. The Association neither has nor maintains any office or paid employee or representative outside the boundaries of the Fort Leavenworth military reservation and has no office, property, employee, representative, agent, telephone, post office box or address within the State of Wyoming or within the state civil-court jurisdictions and boundaries of any other state.
AFCIA always has and does now operate as an unincorporated association, whose members are limited to the Armed Forces of the United States of America. The membership is further limited to warrant officers and commissioned officers for whom casualty insurance coverage is available. This last-mentioned insurance is available to military personnel in the three highest enlisted grades, who, however, are not eligible for membership in the Association. Applications for membership and applications for insurance are made to AFCIA at Fort Leavenworth by mail, telephone, or personal visit, and require approval at a meeting of the executive committee. AFCIA is not authorized to, nor has it issued, any capital stock.
No salesmen or agents are employed by AFCIA and no commissions are paid by it to anyone. All insurance contracts of the Association are prepared at Fort Leavenworth, some of which are mailed to policyholders in the State of Wyoming, and some premium payments therefor are mailed from Wyoming to the home office of AFCIA at Fort Leavenworth, and are acted upon there. All claims which may be allowed Wyoming insureds are paid by AFCIA to the accounts of the claimants at the Army National Bank (unaffiliated with AFCIA), Fort Leavenworth, Kansas, subject to withdrawal according to the pleasure and direction of the respective claimants.
Most claims are paid solely on the word of the insured, but a claimant who resides in Wyoming may designate an advisory board of not more than three members of AFCIA, who serve without remuneration, or other persons eligible for membership, to examine the attendant circumstances and assess the loss claimed. If such persons are not available, however, the claimant may obtain a statement from the officials of the local fire department, other local officials and/or other disinterested witnesses, none of whom receive pay for their services. The claimant has the option of selecting and obtaining the services of a professional adjuster if he deems this necessary to the formulation and preparation of his or her claim. All claims are reviewed and decided upon by the staff and Executive Committee of AFCIA at Fort Leavenworth.
AFCIA is not presently transacting new business with respect to residents and risks located in Wyoming, but it does continue collection of premiums on and the servicing of such Wyoming policies as remain in force at this time.
There are presently 99 AFCIA policies in force in Wyoming, 84 of which had been issued by AFCIA before the insureds moved here. Three of the individuals who had not been insured by AFCIA before moving to Wyoming reside on the Warren Air Force Base. Total premiums received by AFCIA on 1976 coverage from the aforesaid 84 persons is $9,144.16, and from the aforesaid remaining 15 persons is $1,861.54.
The Association does not now have, nor has it ever had, a Certificate of Authority to do insurance business in this state, and one has never been applied for.
AFCIA has never filed an annual report or paid an annual premium tax, but is willing to file its annual report voluntarily with the Wyoming Department of Insurance if so requested.
The Association has issued casualty and property insurance covering personal property situated inside the boundaries of federal military reservations, and has issued casualty and property insurance on both personal and real property outside the confines of military reservations within the boundaries of the State of Wyoming.
The appellant calls attention to the following issues for review:
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