Md. Cas. Co. v. Indus. Comm'n

• Decision Date: 05 February 1929
• Citation: 198 Wis. 202,223 N.W. 444
• Parties: MARYLAND CASUALTY CO. v. INDUSTRIAL COMMISSION ET AL.
• Court: Wisconsin Supreme Court

198 Wis. 202

223 N.W. 444

MARYLAND CASUALTY CO.

v.INDUSTRIAL COMMISSION ET AL.^a1

Supreme Court of Wisconsin.

Feb. 5, 1929.

On rehearing. Former opinion reversed, and judgment of the circuit court affirmed.

For former opinion, see 221 N. W. 747.--[By Editorial Staff.]

ROSENBERRY, J.

On the motion for rehearing and in another case the questions dealt with in the first opinion filed in this case have been reargued and reinvestigated. In the first opinion it was said that the question of whether or not the employer was indemnified was not a controversy with respect to compensation under the Workmen's Compensation Act (St. 1925, § 102.16, subd. 1). Further study and consideration convinces us that we were in error in so concluding.

[1] It may be observed in the beginning that the power of the state to deal with the entire subject in including assurance that the workmen entitled to compensation shall receive compensation is very broad. New York Central Railroad Co. v. White, 243 U. S. 188, 37 S. Ct. 247, 61 L. Ed. 667, L. R. A. 1917D, 1, Ann. Cas. 1917D, 629;Mountain Timber Co. v. State of Washington, 243 U. S. 219, 37 S. Ct. 260, 61 L. Ed. 685, Ann. Cas. 1917D, 642. A state, having the power to require an employer to pay certain sums into a fund to be administered by the state for the purpose of guaranteeing to injured employees compensation for their injuries under the act, must necessarily have very broad powers of regulation. When it does not pursue that method and permits the employer to pursue within certain limitations other means of assuring compensation to his employees, it must be furnished upon the terms prescribed by the state. Attention was called in the original opinion to the fact that the act requires, in the absence of special permission by the Industrial Commission, that every policy insuring against liability for workmen's compensation shall in its coverage be coextensive with the provisions of the statute. The statute also provides:

“Section 102.31 (2). No company shall enter into any such contract of insurance unless such company shall have been approved by the commissioner of insurance, as provided by law.”

The plaintiff company is a foreign corporation and is required to comply with certain provisions of the Wisconsin statutes as a condition of doing an insurance business within the state of Wisconsin (section 201.38). When licensed, such foreign insurance corporation may transact in this state only such kinds of business as under the laws of this state a like domestic corporation is authorized to transact, and may not transact any business in this state not specified in the certificate of authority granted by the commissioner of insurance (section 201.40). So that a foreign corporation stands upon the same footing with respect to the laws of the state of Wisconsin that a domestic corporation stands.

[2] A study of the Workmen's Compensation Act (chapter 102, Wis. Stats.) convinces us that, with respect to insurance, the statutory scheme was intended to do more than merely protect the employer against liability on account of injuries sustained by his employees. The quite evident purpose of the whole scheme is to guarantee payment of compensation in accordance with the terms of the act to the injured employee. Instead of providing for a fund to be administered by the state, the act (St. § 102.28) requires the employer to “insure payment of such compensation in some company authorized to insure such liability in this state unless such employer shall be exempted from such insurance by the industrial commission.” And an employer failing to comply with this statutory requirement is guilty of a penal offense and subject to fine and imprisonment.

It is then provided: “Section 102.31 (1). Every contract for the insurance of the compensation herein provided for, or against liability therefor, shall be deemed to be made subject to the provisions of sections 102.03 to 102.34, inclusive, and provisions thereof inconsistent with sections 102.03 to 102.34, inclusive, shall be void. Such contract shall be construed to grant full coverage of all liability of the assured under and according to the provisions of sections 102.03 to 102.34, inclusive, notwithstanding any agreement of the parties to the contrary unless the industrial commission has theretofore by written order specifically consented to the issuance of a contract of insurance on a part of such liability.”

There are also certain restrictions on the right of the insurance carrier to cancel or revoke its policy. In addition to the powers of visitation which the insurance commissioner has with respect to the insurance company, the Industrial Commission is also given authority to examine the books and records of any insurance company issuing policies on account of liability of employers under the Workmen's Compensation Act.

The legislative purpose is further indicated by section 102.30 (2): “The failure of the assured to do or refrain from doing any act required by the policy shall not be available to the insurance carrier as a defense against the claim of the injured employee or his defendants.” The insurance carrier is likewise given a right to reimbursement in the event of recovery against a third party, and many other provisions of the statute confer broad powers upon the insurance carrier with respect to the proceedings before the Industrial...