THE JOB SECURITY SCHEME INSURANCE CORPORATION, by and thru its Managing Director, J. ALLIEU SWARAY, and Deputy Managing Director, D. MICHAEL YEAH, Appellant/Respondent, v. REPUBLIC OF LIBERIA, by and thru the Minister of Justice, COUNSELLOR JENKINS K. Z. B. SCOTT, and all practicing lawyers of the Ministry of Justice, Appellee/Petitioner.

APPEAL FROM THE RULING OF THE CHAMBERS JUSTICE GRANTING THE PETITION OF QUO WARRANTO.

Heard: April 25, 1985. Decided: June 20, 1985.

1. An insurance company must comply with all of the requirements of the Liberian Insurance Law in order to carry on an insurance business.
2. An insurer’s certificate of authority is subject to cancellation if the insurer fails to meet the requirements stipulated by section 4.7 of the Insurance Law. Insurance Law, Rev. Code 16:4.8
3. Under the procedure stipulated by section 4.8 of the Insurance Law, the Commissioner of Insurance may cancel an insurer’s certificate of authority. Insurance Law, Rev. Code 16:4.8.
4. The effect of a final decision of the Commissioner of Insurance cancelling the certificate of authority of an insurer in accordance with section 4.8 of the Insurance Law is that the insurer shall cease to do business in Liberia and shall forfeit any security deposit made by it in respect of such authorization, except that the insurer shall be permitted to continue to operate for the sole purpose of satisfying creditors and claims in accordance with the liquidation procedure set forth in said law.
5. If the irregularities in the issuance of a certificate of authority is traceable to the Commissioner of Insurance, the insurer shall not bear the brunt or full weight of the law which prohibits the exercise of corporate rights. Instead, it shall be permitted to exercise such rights in accordance with amendments filed upon the advice and consent of the Bureau of Insurance, and approved by the Minister of Foreign Affairs.

The Republic of Liberia, through the Minister of Justice, filed a petition for a writ of quo warranto to prohibit the respondent, Job Security Scheme Insurance Corporation, from operating as an insurance company, to revoke its corporate franchise, and to dissolve the corporation. The Republic/ appellee contended that the appellant had failed to meet the requirements of the Insurance Law of Liberia to operate as an insurance company, that the fidelity bond filed by the respon-dent was not approved by the Commissioner of Insurance, and that the respondent had continued to perpetrate fraud in operating as an insurance company. The respondent, although admitting that it had not initially met several requirements of the Insurance Law, asserted that it had amended its articles of incorporation and had been granted authority by the Commis-sioner of Insurance to operate as an insurance company. It also contended that quo warranto was not the correct proceeding to bring.
The Justice in Chambers, after hearing the arguments of the parties, granted the petition and ordered that the respondent be restrained and prohibited from operating as an insurance company, and that it be ousted from exercising the franchise of an insurance company within Liberia. From this ruling, respon-dent appealed to the full bench.

The Supreme Court, while agreeing with the Justice in Chambers that an insurance company must comply with all the requirements of the Insurance Law in order to carry on an insurance business in Liberia, disagreed with his conclusion that the respondent was exercising a franchise as an insurance company without proper documentation. The Court opined that while the respondent had not originally met the requirements of the Insurance Law to operate as an insurance company, the amendment of its articles of incorporation and the granting of its request by the Bureau of Insurance giving it authority to operate as an insurance company, with retroactive effect, cured the defect which previously existed. The Court also observed that no cancellation proceedings had been filed against the respondent as stipulated by the Insurance Law, and that even if there were irregularities in the issuance of the certificate of authority by the Bureau of Insurance, because the irregularities were traceable to the office of the Commissioner of Insurance, the respondent should not be prohibited from exercising its corporate rights. It noted that the respondent had filed amended articles of incorporation to conform to the law, that this was done on the advice of and with the consent of the Bureau of Insurance, and that the same was approved by the Minister of Foreign Affairs. Under the circumstances, the Court said, a modification of the ruling of the Chambers Justice was war-ranted. the Court therefore modified the ruling of the Chambers Justice, giving the respondent ninety days to fully meet all the requirements of the Insurance Law, failing which the Commis-sioner of Insurance was at liberty to commence cancellation proceedings to cancel the respondent’s certificate of authority.

S. Edward Carlor and Gladys K. Johnson appeared for the respondent/appellant. The Solicitor General of Liberia, David Towah, and the senior legal counsel of the Ministry of Justice, S. Momolu Kiawu, appeared for the petitioner/appellee.

MR. JUSTICE SMITH delivered the opinion of the Court.

The respondent, Job Security Scheme Insurance Corpo-ration, being dissatisfied with the ruling of our distinguished colleague, Mr. Justice Morris, presiding in Chambers of this Court, excepted thereto and announced appeal to the bench en banc.
As culled from the records, the following are the facts in the case: On the 15th day of May, 1984, the Republic of Liberia, by and thru the Minister of Justice, Honourable Jenkins K. Z. B. Scott, filed a nine-count petition for a writ of quo warranto, accompanied by a statement of the Minister based on information, all of which alleged substantially as follows:

1. That although the respondent, Job Security Scheme Insurance Corporation was incorporated to operate as a general business corporation as distinguished from an insurance company, the respondent is illegally exercising the franchise of insurance company in violation of the Insurance Law of the Republic of Liberia.
2. That under the Insurance Law, any seven or more individuals intending to operate an insurance compa-ny are required to meet certain requirements of the law before commencing operation, which the respon-dent has failed to do.
3. That upon being queried by the Bureau of Insurance for non-compliance with the law, the respondent corporation amended its articles of incorporation on the 9th day of September, 1983. However, both the amended articles of incorporation and the original articles of incorporation of June 16, 1982, filed with the Minister of Foreign Affairs, were never submitted to the Minister of Justice for his advice and opinion as required by law. Nevertheless, the respondent com-menced operating an insurance business.
4. That the fidelity bond tendered by the respondent corporation, as required under the Insurance Law, was never approved by the Commissioner of Insurance; and
5. That by reason of the continuous fraud perpetrated by the respondent corporation, the Ministry of Justice was compelled to take administrative action by freez-ing all accounts of the respondent, which resulted in prohibition proceedings being filed by the respondent in August 1983.

By reason of the allegations, as summarized herein above, the Republic of Liberia prayed for the revocation of respon-dent’s corporate franchise and dissolution of the corporation.
To this petition, the respondent corporation filed a fifteen-count returns, contending in substance as follows:

1. That the allegation that respondent corporation is illegally exercising the franchise of an insurance company is untrue because the respondent is in possession of a certificate of authorization, dated June 16, 1982, signed by the commissioner of Insurance and ap-proved by the Minister of Commerce, Republic of Liberia, to carry on an insurance business, which certificate petitioner itself proferted with its petition. Respondent asked the Court to take judicial notice of its record in this connection.
2. That in the event a duly incorporated corporation is alleged to be functioning illegally, the appropriate remedy is to resort to cancellation and not quo warranto.
3. That where certain provisions of the Insurance Law are not allegedly met by an insurance company, the proper remedy is cancellation of the corporation’s certificate of authorization, not a petition to the Supreme Court for quo warranto.
4. That the petitioner having admitted that the respon-dent corporation is a corporation granted permission to operate as general a business corporation, if the petitioner claims violation of the Insurance Law it should have specifically averred in its petition the section of the Associations Law and/or the Insurance Law which respondent had violated, in keeping with the principle of notice.
5. That under the rule of pleadings, petitioner should have alleged fraud with particularity, and where fraud is alleged, the proper legal relief to be sought is to have the respondent’s certificate cancelled through cancellation proceedings.
6. That the same defenses of petitioner in the prohibition proceeding that has already been adjudicated have formed the basis of petitioner’s petition for these quo warranto proceedings.
7. That the failure to submit articles of incorporation to the Minister of Justice by a corporation for a review and legal opinion is not a ground for a petition for a writ of quo warranto; nor is there any legal obligation on part of a corporation to do so.

8. That the fact that the certificate of authorization grant-ed the respondent corporation to carry on insurance business has not at any time been cancelled under the law, respondent cannot be said to be operating illegally.
9. That the doubt of the respondent, as expressed in its letter of July 30, 1982, having been cleared up by petitioner’s letter of August 4, 1982, to the effect that the type of business in which respondent was engaged was purely insurance business, respondent was convinced on the subject and, therefore, on the 9th day of August, 1982, requested permission of the Ministry of Commerce to ratify its articles of incorporation, by an amendment thereto, after respondent shall have met all legal requirements as contained in the Bureau of Insurance’s letter of August 4, 1982. That more-over, respondent requested the Bureau of Insurance to grant it a certificate of authorization retroactively so as to meet the legal standard of the existing business effective as of the date of respondent’s business registration with the Division of Domestic Trade, Ministry of Commerce, that is June 11, 1982, and the date of the certificate of authorization, June 16, 1982, respectively. The request was never rejected by the Bureau of Insurance or any agency of government for that matters. Therefore, respondent was operating under the strength of its certificate of authorization of June 16, 1982, which was still in force and had not been cancelled.

The Chambers Justice heard the proceedings and entered a ruling granting the petition and ordering that the respondent be restrained and prohibited from operating an insurance company. The Chambers Justice also decreed that the respondent corporation be ousted from exercising the franchise of an insurance company within the Republic of Liberia, stating as reasons therefor on the following grounds:

1. That the respondent corporation was exercising a franchise of an insurance company without proper documentation in violation of the Insurance Law.

2. That the monetary requirements of the Insurance Law were not met by the respondent, and that the fidelity bond which respondent tendered was not approved by the Commissioner of Insurance.

3. That the amended articles of incorporation did not meet the mandatory requirements of the Insurance statute because certain provisions of the Insurance Law had not been set forth therein.

4. That after the amendment, a new certificate of authorization to carry on insurance business should have been obtained by the respondent and not a certificate with retroactive provisions as requested by respondent in its letter of August 9, 1982.
Counsel for the respondent/appellant argued before this Bench, in essence, that respondent conceded the fact that it did not meet all the requirements of the Insurance Law as pointed out by the learned Chambers Justice; but it strongly contended that respondent cannot be said to have intruded in or exercised the franchise of an insurance company not granted it by the petitioner/appellee in the face of respondent’s certificate of authorization issued it by the Commissioner of Insurance on June 16, 1982, and approved by the Minister of Commerce. Respondent asserted further that it was upon this certificate that respondent had relied in exercising such franchise, and that said instrument had not been cancelled. The respondent therefore prayed the Court, in the interest of the public good, to modify the ruling of the Chambers Justice in order to afford respondent the opportunity to operate, and by doing so, to correct the omissions complained of; and that the respondent be given them reasonable time within which to have said omission corrected, so as to have it conform to the statutory requirements.
We are in perfect agreement with our distinguished col-league in Chambers that an insurance company must comply with all the requirements of the Insurance Law in order to carry on insurance business, but we disagree with his conclusion that the respondent intruded and was exercising a franchise of an insurance company without proper documentation.
In our opinion, the circumstances attending this case warrant the modification of the ruling of the Chambers Justice in the interest of justice, fair play and the public good.

From what we have gathered from the record before us, when respondent formed the Job Security Scheme Insurance Corporation and submitted its articles of incorporation, approved by the Minister of Foreign Affairs, least did respon-dent think that its activities amounted to an insurance company. It therefore declined to be recognized as an insurance company. Hence, it did not at the time meet the requirements of the Insurance Law prior to operation. For the benefit of this opinion, we quote hereunder the letter from Managing Director J. Allieu Swaray, addressed to Mr. Naatehn of the Bureau of Insurance, Ministry of Commerce, dated July 30, 1983, as follows:

“Dear Mr. Naatehn:

We hereby acknowledge receipt of your letter dated July 27, 1982, in which you called our attention to a violation of a section of Insurance Act of the Republic of Liberia. Also to quote the letter, you stated that we have failed to meet up with the insurance requirements.

In response to your letter, we interpose no objection for your curiosity as a research officer of the Insurance Bureau, because it is your duty to find out about insurance companies in the country. Further, we shall never contravene the laws of the Republic.

For your information, we manage an employee wel-fare company and not an insurance company. The scope of our operation is more or less that of social security, dealing with only workers. We are not involved in profes-sional underwriting with regards to risk commensurately measurable in consideration to a future benefit like insurance companies do. Also, for your information, we are a legally incorporated and registered company. Please find copies of the incorporation and registration certifi-cate.

In spite of our willingness to appear, in case you may need to know more about us, we hope this serves as an official response to your letters.

Kind regards.

Very respectfully,

/s/ J. Allieu Swaray

MANAGING DIRECTOR.”
In reply to this letter, the Bureau of Insurance, thru the said Daniel Naatehn, clarified the doubt of the respondent by defining the type of operation in which the corporation had engaged itself, pointing out that the acts constituted an insurance business. Mr. Naatehn therefore pointed out that the Insurance Law had to be complied with by the Job Security Scheme Corporation. We also deem it appropriate to quote hereunder this letter, dated August 4, 1982, for the benefit of this opinion, as follows:

“Dear Mr. Managing Director:

We wish to extend our thanks and appreciation for your response to our letter dated July 27, 1982, holding you in contempt of a section of the Insurance Law.

We wish to note that paragraph two of your letter gives us the impression that you are of the belief that the Bureau of Insurance intends to obstruct the smooth operation of your corporation; no, this is not our intention and we wish to clarify your mind on this, in that, we are only asking you to have some records about your activities and operations in this country.

For further clarification, insurance may be defined as a social device providing financial compensation for the effects of misfortune, the payments being made from the accumulated contributions of all parties participating in the scheme. Although you are claiming that you manage an employee welfare company and not an insurance company per se, we hold the belief that some kind of fund, into which all who are insured/protected, will pay an assessed contribution (called a premium). In return, those insured will have the right to call on the fund for any appropriate payment, should the insured event occur. This is exclusively the aim of social security, which you associate the scope of your corporation with, and which in essence is purely insurance from our professional point of view in this field.

Based on the proceeding facts mentioned supra, you are requested to submit to the Bureau of Insurance all information surrounding your activities/operations and the kinds on behalf and/or compensations provided for the effects of a misfortune should it befall a member of the scheme.

We wish we have clarified our position and that you will comply as per our letter.

IN THE CAUSE OF THE PEOPLE, THE STRUGGLE CONTINUES:”
Very truly yours,
/s/ Daniel F Naatehn

RESEARCH OFFICER & OFFICER RESPONSIBLE FOR THE INSURANCE OF AGENTS LICENSES”

It would seem that from the contents of this letter, the res-pondent corporation was convinced that its operation amounted to an insurance business, and therefore requested permission to rectify the articles of incorporation by amendment so as to meet the requirements of the provision of the Insurance Law. The respondent also requested that it be issued a certificate of authority to legitimize its existing business and that the said certificate be issued retroactively to have it conform to respondent’s registration date with the Ministry of Commerce. For the benefit of this opinion, we also quote hereunder the respondent’s letter of August 9, 1982, to this effect and the certificate of authorization obtained by it to carry on insurance business. The certificate was issued by the Commissioner of Insurance on June 16, 1982, and approved by the Minister of Commerce. The letter and the certificate read, respectively, as follows:

“Dear Mr. Naatehn:

Your letter dated August 4, 1982, explaining to us sections of the Insurance Laws of the Republic of Liberia which classified our business as an insurance company is hereby acknowledged.

Based upon Liberian categorization of our business, we agree and accept our operation as an insurance company. However, we wish to request your office con-sideration in permitting us to rectify our existing articles of incorporation by amendment, upon meeting all neces-sary requirements stipulated in the Insurance Laws, to conform to the provision as indicated in your letter of August 4, 1982. Meanwhile, we would appreciate it if the Bureau will grant us a certificate of authorization to legitimize our existing business as of the date of our registration with the Domestic Trade within the Ministry of Commerce, Industry and Transportation.

Kind regards.

Very truly yours,

/s/ J. Allieu Swaray

MANAGING DIRECTOR”.

“REPUBLIC OF LIBERIA

MINISTRY OF COMMERCE, INDUSTRY AND TRANSPORTATION

MONROVIA

OFFICE OF THE COMMISSIONER

BUREAU OF INSURANCE

This is to certify that pursuant to chapter 4 of Title 16, the Insurance Law approved March 7, 1973, and published by authority October 8, 1978, that

JOB SECURITY SCHEME CORPORATION

has completed all the requirements to carry on insurance business in the Republic of Liberia, and has accordingly been granted this CERTIFICATE OF AUTHORIZATION to engage in the said insurance business.

Affixed in the City of Monrovia,

Republic of Liberia,

this 16th day of June, A. D. 1982.

_________________ _____________________________

MINISTER OF COMMERCE COMMISSIONER OF INSURANCE, R. L.

INDUSTRY & TRANSPORTATION, R .L.

The above quoted certificate of authorization bearing date June 16, 1982, is retroactive based on the request of the respondent as contained in its letter of August 9, 1982, quoted supra, and conforms to respondent’s existing business registration certificate issued by the Ministry of Commerce in June, 1982. If at all there exists a prior certificate of authorization issued for the respondent to carry on insurance business without the respondent first complying with the requirements of the Insurance Law, there is no evidence of its cancellation as provided by sections 4.7 through 4.9 of chapter 4 of the Insurance Law which read as follows:

Ҥ 4.7. Cancellation of authorization; grounds.

An insurer’s certificate of authorization shall be subject to cancellation if the insurer does any of the following:

(a) Fails to maintain unimpaired the minimum capital and minimum surplus required of it; or

(b) Fails to maintain the margin of solvency applicable to it; or

(c) Fails to retain in Liberia at least ten percent of its gross annual premiums derived from policies pertaining to risks or undertakings in Liberia; or

(d) Fails to maintain the security given by it as protection for creditors; or

(e) Fails to submit an annual report, record or document requited by this title or the Commissioner within the prescribed time, or within a reasonable time thereafter not to exceed thirty days; or

(f) Fails to comply with any other procedural or operating requirement under this title after first being notified of such failure by the Commissioner and thereafter failing to remedy the defect within the prescribed time; or

(g) Ceases to carry on business in this country; or

(h) Requests that its certificate be cancelled; or

(i) Fails to satisfy a final judgment obtained against it in any Liberian court of competent jurisdiction within thirty days after such judgment is entered.

Ҥ 14.8. Cancellation of authorization; procedure.

The following procedure shall govern proceedings to cancel an insurer’s certificate of authority:

(a) If the Commissioner finds that an unauthorized insurer has subjected itself to cancellation of its certificate of authority on any of the grounds set forth in section 4.7, he shall convey such findings with supporting evidence to the Minister of Justice with recommendation that the insurer’s certificate of authority be cancelled. If the Minister of Justice concurs in the Commissioner’s findings and recom-mendation, the Commissioner shall immediately notify the insurer in writing of his intention to cancel its certificate of authority.

(b) Upon receipt of such notice, the insurer shall have thirty days to request an informal administra-tive hearing before the Commissioner at which it may introduce any evidence which is relevant and material without regard to formal rules of evidence. The Commissioner, acting on advice of the Minister of Justice, shall consider the evidence so presented and issue a final decision within thirty days, either affirming or rescinding the proposed cancellation and assigning written reasons in support thereof.

(c) If the Commissioner should reaffirm his decision to cancel the certificate, the insurer shall have the right of judicial review in a court of competent jurisdiction in accordance with established proce-dures.

(d) During the period of such review, the insurer shall be prohibited from soliciting new contracts or policies of insurance, but nevertheless is required to process all claims and other normal business in connection with existing contracts or policies.”

Ҥ 4.9. Effect of final decision of cancellation.

When the Commissioner’s decision to cancel the certificate of authority of an insurer becomes final, the insurer shall cease doing business in Liberia and further shall thereafter be subject to forfeiture of the security deposited under section 4.4(e) and of its other assets in Liberia to satisfy creditors and claims for policyholders in accordance with the liquidation procedure set forth in this title. Any unused assets shall be returned to the insurer involved.”

On the other hand, if the irregularities in the issuance of the certificate are partly traceable to the Commissioner of Insurance, then, in our opinion, the respondent should not bear the brunt or the full weight of the law by being prohibited from exercising its corporate rights for which it filed an amended articles of incorporation upon the advice and consent of the Bureau of Insurance, and which was duly approved by the Minister of Foreign Affairs.
Under the foregoing circumstances, coupled with the fact that hundreds of Liberians in the public and private sectors have invested hundreds of dollars in this wholly and solely Liberian owned business venture, it is our considered opinion that to close down the respondent corporation which has in its employ over one hundred Liberians, as argued by its counsel, will do more harm to the country than good, especially so since the only ground of the petition is that the respondent had not complied with the Insurance Law of Liberia.
In view of this holding, it is our considered opinion that the ruling of the Chambers Justice should be, and the same is hereby affirmed, with the modification that on the condition that it deposits with the Commissioner of Insurance, as security for creditors, $50,000.00 cash or bank guarantee or bond in the same amount as required by law, the respondent shall continue to operate and exercise the franchise as granted by its certifi-cate of authorization issued by the Commissioner of Insurance and approved by the Minister of Commerce. The accounts of the respondent/appellant should therefore be unfrozen. And since the respondent has not met all of the requirements, which it admits, respondent is given ninety (90) days from the date of this opinion to meet with the Commissioner of Insurance and comply with the requirements of the law. If the respondent fails to meet said requirements within the ninety (90) day period, the Commissioner of Insurance shall proceed to cancel its certificate of authorization with immediate effect, except such failure cannot be attributed to respondent’s own fault. And it is hereby so ordered.

Ruling affirmed.