U.S. Supreme Court
Robertson v. California, 328 U.S. 440 (1946)
Robertson v. California
Argued January 8, 9, 1946
Decided June 3, 1946
328 U.S. 440
Section 703(a) of the California Insurance Code makes it a misdemeanor for any person, except one licensed as a "surplus line broker," to act "as agent for a nonadmitted insurer in the transaction of insurance business" within the State. Section 1642 provides that "[a] person shall not act as an insurance agent, broker, or solicitor until a license is obtained from the commissioner, authorizing such person so to act." Appellant was convicted in a state court for violations of §§ 703(a) and 1642 committed subsequently to the decision of this Court in United States v. South-Eastern Underwriters Assn., 322 U. S. 533 (holding that the business of insurance conducted across state lines is interstate commerce), but prior to the enactment of the Act of Congress of March 9, 1945, 59 Stat. 33 (authorizing state taxation and regulation of the business of insurance). The evidence showed that appellant, without a license of any kind, had acted within the State as agent of a nonadmitted foreign insurer conducting a mutual benefit type of insurance business.
1. Section 1642, considered with other requirements of the state law, being designed and reasonably adapted to protect the public and applicable without discrimination to agents of local and foreign companies acting in California, was not in violation of the Commerce Clause of the Federal Constitution, since it neither discriminates chanroblesvirtualawlibrary
2. Considered apart from other provisions of the Code, the requirements for issuance of a surplus line broker's license -- that the Commissioner shall find the applicant to be trustworthy and competent to transact an insurance brokerage business in such manner as to safeguard the interest of the insured, payment of a $50 filing fee, and posting of a $5,000 fidelity bond -- were not in violation of the Commerce Clause of the Federal Constitution. P. 328 U. S. 450.
3. Even though the Code provisions regulating the admission of foreign insurance companies to do business within the State, together with provisions regulating activities of surplus line brokers, operated to forbid either foreign or domestic companies to do within the State a life insurance business on other than a legal reserve basis, except as to companies engaged in doing such business there prior to January 1, 1940, no unconstitutional discrimination against interstate commerce was involved, and the result is not precluded by the South-Eastern decision. P. 328 U. S. 455.
(a) The conditions prescribed apply alike to domestic and foreign corporations. P. 328 U. S. 456.
(b) The provision differentiating between companies organized or admitted to do business within the State prior to January 1, 1940, and others, does not involve any discrimination as between domestic and foreign or interstate and intrastate insurers. P. 328 U. S. 456.
(c) The distinction does not become discriminatory, in any sense now pertinent, merely because the preexisting companies are allowed to continue their business under somewhat less burdensome reserve requirements than those under which new companies are permitted to enter. P. 328 U. S. 456.
4. For failure to meet its reserve requirements, a State may exclude foreign insurance companies, or their agents, from doing business within the State. P. 328 U. S. 458.
(a) State regulation of interstate business done within the State's borders is not rendered invalid by the mere fact that the regulation is in form a "license." P. 328 U. S. 458.
(b) The Commerce Clause is not a guaranty of the right to import into a State whatever one may please, absent a prohibition by Congress, regardless of the effects of the importation upon the local community. P. 328 U. S. 458.
(c) The reserve requirements of the State cannot be deemed, either on the face of the statute or by any showing that has been made in this case, to be excessive for the protection of the local chanroblesvirtualawlibrary
interest affected, nor designed or effective either to discriminate against foreign or interstate insurers or to forbid or exclude their activities. P. 328 U. S. 459.
5. Appellant's objections founded on the provisions relating to the placing of surplus line insurance with nonadmitted insurers lack merit in view of the power of the State, through it reserve requirements for admission and related prohibitions, to forbid entirely the placing of insurance of the sort here involved, whether with domestic, admitted, or nonamitted companies. P. 328 U. S. 460.
6. The requirements of the state law do not operate to regulate activities of the appellant or the foreign insurer beyond the borders of the State, and do not on this score violate the due process or equal protection clause of the Fourteenth Amendment. P. 328 U. S. 461.
7. The result in this case is reached independently of the Act of March 9, 1945; wherefore, no question a to possible ex post facto operation of that Act is involved. P. 328 U. S. 461.
Appellant was convicted in a state court of violating certain provisions of the California Insurance Code, which he challenged as being contrary to the Commerce Clause and the Fourteenth Amendment. The conviction was affirmed by an intermediate state court, which was the highest state court to which an appeal e and the Fourteenth Amendment. The conviction was affirmed by an intermediate state court, which was the highest state court to which an appeal e and the Fourteenth Amendment. The conviction was affirmed by an intermediate state court, which was the highest state court to which an appeal could be taken. Ins.L.J. May, 1945, p. 273. Appellant appealed to this Court. Affirmed, p. 328 U. S. 462. chanroblesvirtualawlibrary