Employers Casualty Co. v. Hobbs
| Decision Date | 07 December 1940 |
| Docket Number | 35019. |
| Citation | 152 Kan. 815,107 P.2d 715 |
| Parties | EMPLOYERS CASUALTY CO. v. HOBBS, Commissioner of Insurance, et al. |
| Court | Kansas Supreme Court |
Syllabus by the Court.
The so-called retaliatory clauses in insurance statutes are not in fact retaliatory provisions but are clauses based upon principles of "comity", and are designed to create substantial equality of burdens upon foreign and domestic corporations. Gen.St.1935, 40-253.
Determination of the appropriate tax to be exacted from a foreign insurance company requires that the Insurance Commissioner consider the laws of the foreign company's domicile for purpose of determining what tax that state would exact from a Kansas insurance company operating there under the same conditions and circumstances as the foreign company is operating in Kansas. Gen.St.1935, 40-253.
Where under Texas law, a Kansas insurance company doing business in Texas would be required to pay a tax on gross premiums collected in Texas of 3.25 percent. unless company had invested fifty percent. of its assets in Texas securities, a Texas insurance company which had invested no part of its assets in Kansas securities was properly required under the so-called retaliatory provision of Kansas statute to pay tax on gross premiums collected in Kansas of 3.25 percent. as condition of doing business in Kansas. Gen.St.1935, 40-225 40-253; Vernon's Ann.Tex.Civ.St. art. 7064.
1. So-called retaliatory clauses in insurance codes of states and countries are not in fact retaliatory provisions but are based upon principles of comity and are designed to create substantial equality of burdens upon foreign and domestic corporations.
2. In order to determine the appropriate tax to be exacted from a foreign insurance company operating in this state, the insurance commissioner of this state is required to consider the laws of the domicile of that company for the purpose of determining what tax that state would exact from a Kansas insurance company operating there under the same conditions and circumstances that the foreign company is operating in Kansas.
3. An original proceeding in mandamus instituted by a Texas insurance company against the commissioner of insurance of this state to compel the refund of a tax assessed by defendant under the so-called retaliatory provision of our law, and paid under protest, the motion for the writ, the answer of defendant and the motion for judgment on the pleadings examined and held, in assessing the tax against the Texas company defendant properly considered the fact plaintiff had invited none of its assets in securities of this state, and the fact that if a Kansas insurance company operating in Texas, had invested none of its assets in Texas securities, the tax exacted of it by the state of Texas would have been the exact tax which defendant assessed against plaintiff.
Original proceeding in mandamus by the Employers Casualty Company against Charles F. Hobbs, Commissioner of Insurance, and Walter E. Wilson, Treasurer of the State of Kansas, to compel repayments of the so-called retaliatory tax assessed by the Insurance Commissioner and paid under protest. On motion for an alternative writ.
Motion denied.
Clayton E. Kline, M. F. Cosgrove, Balfour S. Jeffrey, and Robert E Russell, all of Topeka, for plaintiff.
Jay S. Parker, Atty. Gen., and C. Glenn Morris, Asst. Atty. Gen., for defendants.
This was an original proceeding in mandamus brought by the Employers Casualty Company, an insurance company, incorporated under the laws of the state of Texas, against the commissioner of insurance and state treasurer of this state to compel repayment of a so-called retaliatory tax, assessed by the insurance commissioner of this state and paid under protest. The proceeding comes to us for decision on a motion for judgment on the pleadings, consisting of a motion for an alternative writ and the answer of defendants. The defendant, state treasurer, is named merely as a stakeholder of the fund, and we shall refer to the insurance commissioner as the defendant.
There is really no dispute concerning material facts. The conceded facts are: Plaintiff is an insurance company and writes casualty and other forms of insurance in this state as well as in the state of Texas, the latter state being its domicile. On February 29, 1940, plaintiff filed with defendant a statement of its condition as of December 31, 1939, as required by G. S.1935, 40-225, together with a verified statement of the amount of all premiums received from its business in this state for the year ending December 31, 1939, as required by G.S.1935, 40-252. At the same time it also tendered payment to defendant of taxes, fees and charges amounting to $2,797.92, which amount is conceded to be the correct amount under the primary law of this state, G.S.1935, 40-252. The primary tax on all premiums received in this state during the preceding year is two (2) percent. G.S.1935, 40-252 (B). The motion for the writ disclosed plaintiff had invested more than fifty percent of its entire assets in Texas securities. Under the laws of the State of Texas plaintiff would be required to pay a tax on gross premiums collected in Texas of 3.25 percent unless plaintiff had invested in certain tax securities to the extent of fifty percent of its assets. If plaintiff invested fifty percent of its assets in Texas securities, the rate of taxation on gross premiums collected in Texas was .625 percent or 5/8ths of one percent. Plaintiff had invested no part of its assets in Kansas securities. Defendant concluded plaintiff, on the basis of the Texas law, was therefore liable to this state for gross premiums received in this state for the year ending December 31, 1939, at the rate of 3.25 percent or for a total tax in the sum of $4,592.67. That was $1,794.75 more than the primary tax under the laws of this state. In order to obtain a renewal of its certificate of authority to do business in Kansas, plaintiff paid $1,794.75 under protest. That is the amount plaintiff seeks to recover in this proceeding.
Whether plaintiff can prevail depends upon the proper interpretation and application of so-called retaliatory legislation to the particular circumstances of this case. While the provisions of G.S. 1935, 40-253, our so-called retaliatory statute, and similar statutes of other states are designated as retaliatory clauses in insurance circles, the real purpose of these statutes is not...
To continue reading
Request your trial
-
St. Louis Union Trust Co. v. State
...Ins. Co. v. Lowe, 354 Ill. 398; Home Ins. Co. v. Swigert, 104 Ill. 653; State ex rel. Baldwin v. Ins. Co., 115 Ind. 257; Employers Casualty Co. v. Hobbs, 107 P.2d 715; Clay v. Dixie Fire Ins. Co., 168 Ky. 315; v. Ins. Co., 71 Neb. 320, 91 A. L. R. 795. (b) The reciprocity statute is not sub......
-
In re Insurance Tax Cases
... 161 P.2d 726 160 Kan. 300 In re INSURANCE TAX CASES. AETNA INS. CO. v. HOBBS, Com'r of Insurance, and fifteen other cases. Nos. 36418, 36421-36429, 36445, 36448, 36449, 36466, ... Jeffrey, and Robert E ... Russell, all of Topeka, on the brief for plaintiff Employers ... Casualty Co ... A. B ... Mitchell, Atty. Gen., and Harry W. Colmery, of Topeka ... ...
-
Republic Insurance Co. v. Commissioner of Taxation
...of the leading authorities on the issue, including State v. Fidelity & Cas. Inc. Co., 39 Minn. 538, 41 N.W. 108; Employers Cas. Co. v. Hobbs, 152 Kan. 815, 107 P.2d 715; Massachusetts Mutual Life Ins. Co. v. Hobbs, 163 Kan. 289, 181 P.2d 512; Occidental Life Ins. Co. v. Holmes, 107 Mont. 48......
-
American Southern Ins. Co. v. State, Dept. of Revenue, 95-2588
...20 L.Ed.2d 86 (1968); Republic Ins. Co. v. Commissioner of Taxation, 272 Minn. 325, 138 N.W.2d 776 (1965); Employers Casualty Co. v. Hobbs, 152 Kan. 815, 107 P.2d 715 (1940). See also Republic Ins. Co. v. Oakley, 637 S.W.2d 448, 449-50 (Tenn.1982) (Where both Tennessee and Texas reduced tax......