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§ 184. “Insurance.”

Insurance is the act of insuring or assuring against loss or damage by a contingent event. A contract whereby for a stipulated consideration, called a premium, one party called the insurer undertakes to indemnify or guarantee another party called the insured against loss, is called fire, accident or marine insurance, as the case may be; a contract whereby the insurer guarantees the insured against the negligence or default of another is called indemnity insurance; a contract whereby the insurer undertakes to pay the


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representatives or nominees of the insured a certain sum of money, upon the death of the insured, is called life insurance; a contract containing a combination of life insurance with investment, as that if the insured die before a specified time the insurance money becomes due at once and is payable to the representatives or nominees of the insured, but if the insured survives that time it is payable to himself or at his direction—is called endowment insurance.

It has recently become usual to speak of “assurance” when the contingency “assured” against is one which must happen sooner or later—e.g., death; and to speak of “insurance” when the contingency “insured” against is one which may never happen—e.g., fire or shipwreck. The word “insurance,” however, is still used generally as including both insurance and assurance, and that is clearly its scope in this sub-section. (See Historical Note, supra.)

Under the Constitution of the United States, which gives no power to Congress to deal with insurance, it has been decided that the business of insurance is not commerce; and a corporation of one State doing insurance in another is not engaged in commerce among the States. (Liverpool Insurance Co. v. Massachusetts, 10 Wall. 566.) Issuing a policy of insurance is not a transaction of commerce, and so is not subject to congressional regulation. (Paul v. Virginia, 8 Wall. 168.) A law of a State which requires insurance companies of other States to file bond and security, &c., before issuing policies in such State, is not a regulation of commerce, and is constitutional. (Paul v. Virginia, 8 Wall. 168; Doyle v. Continental Insurance Co., 94 U.S. 535.)

The Federal control over insurance extends, in the same manner as the Federal control over banking, to any form of insurance throughout the Commonwealth, except insurance organized and carried on by the government of a State and confined to the limits of the State.

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