In the 1914 case of State of South Carolina, ex rel. Phoenix Mutual Life Insurance Company v. McMaster, the U.S Supreme Court dealt with a dispute over insurance regulation. The Phoenix Mutual Life Insurance Company, based in Connecticut, challenged an order by the South Carolina state insurance commissioner that required it to deposit $15,000 with him as a condition for doing business in the state. The company argued this was unconstitutional because it violated their rights under both due process and equal protection clauses of Fourteenth Amendment since other companies were not subjected to similar requirements. The court ruled against Phoenix Mutual Life Insurance Company stating that states have broad powers to regulate businesses within their borders including requiring deposits from out-of-state insurers for policyholder protection purposes. It further noted that there was no violation of equal protection clause as different treatment can be justified if there is reasonable basis which existed here considering potential risks associated with out-of-state insurers.

In the dissenting opinion for this case, it was argued that South Carolina's insurance law violated the Fourteenth Amendment by depriving Phoenix Mutual Life Insurance Company of its property without due process. The justice believed that the state had no right to force an out-of-state company to deposit securities before conducting business within its borders, especially when such a requirement wasn't imposed on in-state companies. This unequal treatment was seen as discriminatory and unconstitutional. Furthermore, they disagreed with the majority's view that insurance is not commerce but rather a personal contract between parties; thus exempt from federal regulation under interstate commerce laws. They maintained that insurance transactions involve multiple states and should be considered interstate commerce subject to federal oversight.