In the 1918 case of La Tourette v. McMaster, Insurance Commissioner of the State of South Carolina, the Supreme Court examined whether a state could regulate insurance rates for foreign companies operating within its borders. The plaintiff, an Ohio-based insurance company represented by Mr. La Tourette, argued that such regulation violated their rights under the Commerce Clause and Fourteenth Amendment due process protections. However, Justice Day delivered a unanimous opinion upholding South Carolina's right to regulate these rates as part of its police powers to protect public welfare and safety. The court found that while states cannot discriminate against out-of-state businesses or impede interstate commerce unnecessarily, they can enact reasonable regulations in areas traditionally left to state control like insurance.

In the dissenting opinion for La Tourette v. McMaster, Justice Holmes disagreed with the majority's ruling that South Carolina could not require an Ohio insurance company to deposit bonds in South Carolina as a condition of doing business there. He argued that states should have the right to impose reasonable conditions on out-of-state companies seeking to do business within their borders, and he did not believe this requirement was unreasonable or discriminatory. According to him, it was merely a way for South Carolina to protect its citizens from potential losses if the insurance company failed. Furthermore, he noted that other states had similar laws and they were generally accepted as valid exercises of state power. Therefore, he would have upheld South Carolina's law requiring foreign corporations selling life insurance in their state make certain deposits with them.