In the 1936 case of Hartford Steam Boiler Inspection & Insurance Co. et al. v. Harrison, Insurance Commissioner, the U.S Supreme Court was tasked with determining whether a state insurance commissioner had the authority to regulate and license out-of-state insurance companies operating within their jurisdiction. The plaintiff, an out-of-state insurer (Hartford), argued that it should not be subject to regulation by California's insurance commissioner because its business activities were interstate commerce and thus protected from state regulation under the Commerce Clause of the Constitution. However, in a unanimous decision led by Justice Benjamin Cardozo, the court ruled against Hartford stating that while selling insurance across state lines constituted interstate commerce; states still retained regulatory power over such transactions as long as they did not discriminate against or unduly burden interstate businesses. This ruling affirmed states' rights to oversee and regulate all insurers operating within their borders regardless of where those companies are based.

In the dissenting opinion for Hartford Steam Boiler Inspection & Insurance Co. v. Harrison, Justice Cardozo disagreed with the majority's decision that a state insurance commissioner could not regulate an out-of-state company providing boiler inspections and insurance policies in conjunction with those inspections. He argued that such regulation was within the purview of states' rights to protect their citizens from potentially harmful business practices, even if those businesses were based elsewhere. Furthermore, he contended that these services constituted part of an integrated business model rather than separate entities as suggested by the majority ruling; thus they should be subject to regulatory oversight like any other insurer operating within a given state's borders.