In the case of Travelers Insurance Company v. Prewitt, Insurance Commissioner of Kentucky in 1905, the U.S Supreme Court ruled on a dispute between an insurance company and a state regulator. The issue at hand was whether or not the State of Kentucky had jurisdiction to regulate policies issued by Travelers Insurance Company to residents outside of Kentucky but who later moved into the state. The court held that once policyholders became residents within its borders, they were subject to local laws and regulations regardless if their policies originated elsewhere. Therefore, it upheld that states have authority over insurance contracts within their jurisdictions even when those contracts were made out-of-state prior to relocation.

The dissenting opinion in the case of Travelers Insurance Company v. Prewitt, argued that Kentucky's insurance law did not violate the Fourteenth Amendment's Equal Protection Clause. The justice disagreed with the majority view that this state law discriminated against foreign corporations by imposing higher taxes on them than domestic ones. He contended that states have a right to regulate businesses within their borders and protect local industries from unfair competition, including through taxation policies. Furthermore, he asserted that there was no constitutional requirement for states to treat all entities equally when it comes to taxation; they could legitimately differentiate based on reasonable classifications such as domicile or nature of business operations. Therefore, according to him, Kentucky’s differential tax treatment between domestic and foreign insurers was constitutionally permissible.