Zakrzewski v. American Box Board Co. , 256 Mich. 26 ( 1931 )

On October 3, 1930, the American Box Board Company, an employer operating under the workmen's compensation act (2 Comp. Laws 1929, § 8407 et seq.), canceled, to be effective October 15, 1930, its insurance policy with the Michigan Mutual Liability Company, which had been for some time carrying its risk, so notified the department of labor and industry, and procured a policy in the Metals Mutual Insurance Company, to be effective October 15, 1930, and paid the premium. The Metals Mutual Insurance Company issued its policy and filed its certificate of coverage with the department October 4, 1930. The employer advised the department to such effect October 6, 1930. The secretary of the department sent identical letters to the employer and both insurance companies to the effect that the certificate of the Metals Mutual Insurance Company could not be approved until a notice of termination or cancellation was filed by the Michigan Mutual Liability Company. November 1, 1930, such notice was given the department by the Michigan Mutual Liability Company, effective as of October 15, 1930. A death loss occurred on October 17, 1930, and the question is which insurance company should pay the loss. The Metals Mutual Insurance Company was held liable by the department and prosecutes this review.

The contest arises out of the mistaken view of the secretary of the department, as expressed in his letter. The statute, 2 Comp. Laws 1929, § 8460, provides that the insurance company carrying the risk must file a notice of termination or cancellation with the department at least 10 days before taking effect. This is for the protection of employees and to enable the employer to obtain other insurance, but is wholly unnecessary when the employer actually changes the carrier of the risk, so notifies the department, and the new carrier files its certificate of coverage. The authority of the insurance company to assume such coverage is determined by the commissioner of insurance.

The point of law presented, under the facts found by the department, is ruled by Gratopp v. Carde Stamping Tool Co.,216 Mich. 355, and not by Koopmans v. Parsons, 250 Mich. 464.

The holding of the department is affirmed, with costs.

BUTZEL, C.J., and CLARK, McDONALD, POTTER, SHARPE, NORTH, and FEAD, JJ., concurred.