In the 1898 case of Connecticut Mutual Life Insurance Company v. Spratley, the U.S Supreme Court was tasked with determining whether a life insurance policy could be considered an asset in bankruptcy proceedings. The court ruled that it could not, as long as there were stipulations within the policy protecting its value from creditors. This decision came after Mr. Spratley filed for bankruptcy and his trustee attempted to claim his life insurance policy's cash surrender value to pay off debts owed to creditors. However, since Mr. Spratley had named his wife as beneficiary and she had not consented to using this money towards her husband’s debt repayment, the court held that these funds were protected under Tennessee law where they resided.

In the dissenting opinion for Connecticut Mutual Life Insurance Company v. Spratley, it was argued that the majority's decision to uphold a state law requiring out-of-state insurance companies to pay taxes on premiums collected in Tennessee violated the Commerce Clause of the U.S. Constitution. The dissent contended that this taxation constituted an unfair burden on interstate commerce and exceeded states' rights under federalism principles by allowing one state (Tennessee) to impose its tax laws onto businesses operating across multiple states. It was further asserted that such a ruling could set a dangerous precedent, potentially leading other states to enact similar legislation and thereby creating an untenable situation for national corporations trying to navigate differing tax codes across various jurisdictions.