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U.S. Supreme Court

State Farm Mut. Automobile Ins. Co. v. Duel, 324 U.S. 154 (1945)

State Farm Mutual Automobile Insurance Co. v. Duel

No. 115

Argued January 12, 1945

Decided February 12, 1945

324 U.S. 154


A statute of Wisconsin requires that the unearned premium reserve of every insurance company doing business within the State shall be computed by a specified percentage of premiums received and shall be shown as a liability in the annual statement required to be filed. As applied to the appellant -- a foreign insurance company which operated in some States on a membership fee plan (unlawful in Wisconsin) -- the statute as construed requires that, in computing the reserve, there be included membership fees as well as premiums received in all States. For failure to comply with the statute, appellant was denied a license to do business within the State.


1. The statute does not violate the due process clause of the Fourteenth Amendment. P. 324 U. S. 157.

(a) The reserve requirement was relevant to the financial stability of insurance companies doing business within the State, and was therefore within the power of the State for the protection of its citizens. P. 324 U. S. 158.

(b) The due process clause does not demand uniformity in the requirements of the States with respect to financial statements of companies doing a multi-state business. P. 324 U. S. 159.

(c) The statute does not regulate out-of-state activities. P. 324 U. S. 159.

2. The statute does not violate the full faith and credit clause of the Constitution. P. 324 U. S. 159.

(a) That the State of incorporation does not treat membership fees as premiums does not preclude Wisconsin's doing so. P. 324 U. S. 159.

(b) The full faith and credit clause does not bar a State from imposing stricter financial standards for corporations doing business within its borders than are imposed by the State of incorporation. P. 324 U. S. 159.

(c) The appellant, challenging the power of Wisconsin to enforce its own statutes in its own courts, did not meet the burden

Page 324 U. S. 155

of showing that the interests of the State of incorporation were superior. P. 324 U. S. 160.

3. As to the appellant's contention that the statute, as construed and applied, violates the commerce clause of the Constitution -- which question was not raised or passed upon below, but emerged after this Court's decision in United States v. South-Eastern Underwriters Assn., 322 U. S. 533 -- it appears that the appellant is not foreclosed under Wisconsin procedure from obtaining a determination of that question in the Wisconsin courts, either in the present suits or in another pending proceeding, so it is not necessary to vacate the judgment below in order that the appellant may have an opportunity to obtain the ruling. Pp. 324 U. S. 160, 324 U. S. 163.

244 Wis. 429, 12 N.W.2d 696, affirmed.

Appeal from a judgment sustaining the constitutionality of a state statute as construed and applied.

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