In the case of United States v. Maryland Savings-Share Insurance Corp., 1970, the U.S. Supreme Court had to decide whether a state-chartered private insurance corporation was exempt from federal income tax under Section 501(c)(14)(B) of the Internal Revenue Code. The court ruled in favor of Maryland Savings-Share Insurance Corporation (MSSIC), stating that it did qualify for exemption as it fell within the definition provided by Congress for "nonprofit mutual or cooperative insurer[s] other than life." MSSIC's primary function was insuring member savings and loan associations against losses on their share accounts, which according to Justice Thurgood Marshall who delivered the opinion, served a public purpose similar to those performed by federal agencies such as Federal Deposit Insurance Corporation (FDIC). Therefore, despite being privately owned and not directly regulated by any government agency, MSSIC qualified for tax-exempt status due its role in promoting financial stability among savings institutions.

In the dissenting opinion for United States v. Maryland Savings-Share Insurance Corp., Justice Harlan disagreed with the majority's view that a state-chartered, privately funded insurance corporation was not entitled to immunity from federal taxation. He argued that this interpretation of tax law could potentially undermine the financial stability of state-sponsored programs and institutions which are crucial for public welfare. The justice believed that such entities should be treated as instrumentalities of the states and thus exempted from federal income taxes under intergovernmental tax immunity doctrine, even if they were privately insured. He also expressed concern about potential negative impacts on cooperative federalism principles due to this ruling.