(dissenting).
The plaintiff’s action sounds in tort and after the amendment of the complaint the action is directed against the defendant Lindsay, the Park District of the City of Fargo, and Western Casualty and Surety Company. Lindsay does not figure in this appeal. The Park District is a political subdivision which is insured and Western Casualty and Surety Company is the insurer. The trial court, in two orders, dismissed the plaintiff’s action against the insurer, Western, and directed the removal of the insurer’s name from the title and body of the amended complaint. It also ordered that there be stricken from the amended complaint a paragraph alleging that the Park District is insured by Western. This appeal is from both orders.
The majority of this court has reversed that portion of the trial court’s order, striking that paragraph of the amended complaint which alleges that the Park District is insured but has sustained the trial court in directing removal of Western’s name from the title and body of the amended complaint and also in dismissing the plaintiff’s action against Western. Thus, in accordance with the majority opinion, the action lies against the political subdivision but not its insurer and, in addition, holds that the insurer, Western, may not defend the suit against the Park District on the ground of governmental immunity. The majority has also advised that in the trial of the suit it would be improper for the trial court, in its instructions, to allude to the fact that the political subdivision is insured.
I concur with the result of the majority in reversing that part of the order appealed from, striking from the complaint the allegation that the Park District was insured. However, I feel the trial court also erred when it dismissed the action against the insured and directed the removal of its name from the pleadings. I am of the opinion that the Legislature, in enacting Chapter 261 of the Session Laws of 1955, intended to authorize a political subdivision to purchase direct-action liability insurance.
The statute (40-43-07, N.D.C.C.) at the time of issue in this action provided: “Any *746political subdivision of the state may insure against claims of loss, damage, or injury against such political subdivision or any department, agency,, or function, or officer, agent, or employee, of such subdivision. * * * ” It is noted from the language employed in this statute that it authorizes a political subdivision to insure against ' “claims of loss, damage, or injury * * * It does not authorize a political subdivision to insure against liability. A claim is a demand or assertion. It does not adjudicate or determine the right of the claimant nor does it impose liability upon the person against whom it is asserted. Under an indemnity policy the insured must have suffered an actual money loss before the insurer is liable, whereas under a liability policy the cause of action accrues when the liability attaches. 7 Appleman on Insurance Law and Practice, Sec. 4261. Therefore, it appears to me that the language of the statute, “insure against claims,” indicates a liability policy, not an indemnity policy. The interpretation of legislative intent is in harmony with the first part of the next sentence of the section, which provides: “This section shall not deprive any political subdivision of the state of its right to claim governmental immunity, * * * ” which protects a political subdivision from liability and resulting money loss. There is no conflict in these two provisions in the statute. It was well established by case law before the adoption of Section 40-43-07 (enacted as Chapter 261 of the Session Laws of 1955) that the State and its political subdivisions, in the absence of constitutional or statutory waiver of immunity, are not liable for their torts. Vail v. Town of Amenia, 4 N.D. 239, 59 N.W. 1092; Hadler v. North West Agricultural, Live Stock and Fair Ass’n, 61 N.D. 647, 239 N.W. 736; Holgerson v. City of Devils Lake, 63 N.D. 155, 246 N.W. 641; Fetzer v. Minot Park District (N.D.) 138 N.W.2d 601. Thus, the Legislature, in the language quoted above, by the enactment of this section, reaffirmed case law. It authorized a political subdivision to insure against “claims” as opposed to liability because the political subdivision is immune from liability in cases where it may invoke the defense of governmental immunity. The statute continues from the end of the above quote and states:
“ * * * but such immunity shall not be available to the insurance carrier furnishing such insurance and all policies providing for such insurance shall contain a waiver of such defense.”
The only time that an insurance carrier has occasion to invoke the defense of immunity is if a suit were brought against it. Obviously, in order to assert or have “available” any defense, the “insurance carrier” would have to be a party defendant.
The fact that the policy provides the insurer shall defend the suit does not make the insurer a party to the suit. In defending the suit it is entitled, on behalf of the insured, to raise all the defenses that the insured has available to it, were it defending the suit.
The majority has deprived the Park Board of the defense of governmental immunity because it is insured under a policy which provides the insurer shall assume the duty of defending or settling the plaintiff’s claim against the Park Board. This holding may result in judgments against political subdivisions in excess of policy limits and may require the political subdivision to pay judgments before being entitled to indemnity from its insurer or, if the insurer becomes insolvent, to absorb the loss. It flies squarely in the face of the statute which has preserved the defense of governmental immunity for the political subdivision in clear, unambiguous language. The insurer, in assuming the defense for its insured, is deemed the agent of the insured and must have available to it all the defenses of its principal, and because ordinarily in direct-action liability policies an insurer also has available to it all the defenses of its insured the Legislature provided for the exception. The clear import of this language to me is that the insurer may be sued directly by a third-party claim*747ant without first establishing the liability of the insured. The statute reaffirms the defense of governmental immunity on behalf of the insured political subdivision in a suit against it and waives it as a defense in a suit against its insurer.
In 1967, the Legislature, by the enactment of Chapter 244 of the 1967 Session Laws, amended and reenacted Section 40-43-07, North Dakota Century Code, and waives governmental immunity in a suit against the insured political subdivision to the extent of its insurance coverage and policy limits. This statute provides as follows:
“Political subdivisions authorized to carry liability insurance — Waiver of immunity to extent only of insurance purchased.—
“1. Any political subdivision of the state may insure against claims of loss, damage, or injury against such political subdivision or any department, agency, or function, or officer, agent, or employee, of such subdivision.
“2. If a political subdivision insures against a claim, then the political subdivision waives its immunity to suit only to the extent of allowing a determination of liability to the extent of the waiver of the immunity against liability described in subsection 3.
“3. If a political subdivision insures against a claim, then the political subdivision waives its immunity against liability only to the types of its insurance coverage and only to the extent of the policy limits of such coverage.
“4. If a dispute exists concerning the amount or nature of the insurance coverage, the dispute shall be tried separately before the main trial determining the claims and damages of the claimant.
“5. This statute confers no right for a claimant to sue the insurer directly.”
It is noted in paragraphs 2 and 3- of this section that the Legislature has now specifically provided that the insured political subdivision waives its immunity to suit to the extent of allowing a determination of liability against it within its insurance coverage and the policy limits. This statute also affirmatively provides that it “confers no right for a claimant to sue the insurer directly.” These are very material changes in the original statute and must be presumed to indicate a legislative intent to change the law, not to interpret what it was originally intended to provide. Walker v. Weilenman, N.D., 143 N.W.2d 689; Jager v. Grommesh, N.D., 77 N.W.2d 873.
It appears to me that the court, by its majority opinion, has accomplished by interpretation of the prior statute, the same objective as the Legislature accomplished by its amendment, but without the limitations prescribed in the amendment. It is true, as indicated by the majority, that the Legislature has indicated an intention to partially abrogate by waiver the doctrine of governmental immunity. However, I do not think such an intention was indicated until the passage of the 1967 Act. My reasoning on this is affirmed by a former opinion of this court. See Fetzer v. Minot Park District, N.D., 138 N.W.2d 601 (November 29, 1965). In that case we held that a park district was entitled to governmental immunity in a negligence case. In discussing the question, we stated in part, as follows:
“But the strongest argument for governmental immunity is that the Legislature of this State, as recently as the 1965 Session, has recognized the doctrine. Chapter 266 of the 1965 Session Laws, which amends and reenacts Section 40-43-07 of the North Dakota Century Code, provides for motor vehicle liability insurance for the State and its municipal subdivisions. After providing for such *748insurance, the Legislative Assembly further provided:
‘This section shall not deprive any political subdivision of the state of its right to claim governmental immunity or immunity of any employee but such immunity shall not be available to the insurance carrier furnishing such insurance * *
“The courts cannot legislate, regardless of how much we might desire to do so. Therefore, regardless of how worthy a claim against a municipal corporation might be, we cannot assume the functions of the Legislative Assembly. Our power is limited to passing on laws enacted by the Legislature, and, if the Legislature fails to act, we cannot change the law by judicial decision. The question here presented is one that should be addressed to the Legislative Assembly, and not to the courts. As was said by the Honorable A. M. Christianson, in his concurring opinion to Anderson v. Board of Education of City of Fargo, 49 N.D. 181, 190 N.W. 807:
‘If the rule is wrong, the Legislature has ample power to change it. It is the duty of the courts to enforce the law as it exists.’ ”
It appears to me that the majority has now adopted a view which is contrary to that adopted in Fetzer, supra. In that case y/e affirmed a summary judgment of the dismissal of a tort claim against the Park. District on the ground that the Park District was entitled to governmental immunity.
Many States have enacted statutes enabling an injured person or a person whose property is damaged to proceed directly against the liability insurer, and such statutes have very generally been upheld. It has also been held that they are within the police power of the State and do not violate the due process clause, the equal protection clause, or the contract impairment clause of the Federal Constitution.
“In many states, statutes have been enacted enabling an injured person, or person whose property is damaged, to proceed directly against the liability insurer; * * *. While these statutes vary greatly in detail, all of them are alike in that they permit suit directly against the insurer by the injured person. In such respect these statutes are deemed reasonable in their purpose and effect, and their constitutionality has very generally been upheld. They are within the police power of the state, and do not violate the due process clause, the equal protection clause, or the contract impairment clause of the Federal constitution.” 29A Am.Jur. Insurance, Sec. 1486.
See also 46 C.J.S. Insurance § 1191(1), p. 114, wherein it is stated:
“Under statutes in a number of jurisdictions which expressly provide for direct liability of insurer to the injured person or which require insurer to include in the policy a provision for direct liability to the person injured, which statutes have been held to be valid, an injured person may sue to have the insurance money applied to his claim or judgment by an action or proceeding directly against insurer. Such a statute has for its purpose the protection of persons who may be injured, and in effect it makes the injured person a third party beneficiary of the policy to the extent that the statute gives him a remedy. 46 C.J.S. Insurance, § 1191(1), p. 114.
See also 8 Appleman on Insurance Law and Practice, Section 4833.
We held in James v. Young, 77 N.D. 451, 43 N.W.2d 692, 20 A.L.R.2d 1086, that a city ordinance requiring proprietors of licensed taxicab lines to file with the city auditor insurance policies indemnifying persons using such lines and the general public against personal injuries for which taxicab proprietors are legally liable, allows the insurer to be made a party defendant together with the insured in an action for damages on the ground that the ordinance makes *749the insurer directly liable to the injured person on proof of the insured’s liability. I recognize that this case may be distinguished from the present case on the basis that the ordinance required the insurance and it is cited only for the purpose of pointing out that this Court has allowed a direct suit by a third party against an insurer.
The fact that the policy is limited to indemnity does not take it out of the provisions of Section 40-43-07, North Dakota Century Code. All polices or contracts of insurance must be construed in the light of the statute by which they are governed. The statute becomes a part of the contract to be construed therewith. Montgomery v. Whitbeck, 12 N.D. 385, 96 N.W. 327; Bach v. North Dakota Mutual Fire Insurance Company of North Dakota, 56 N.D. 319, 217 N.W. 273.
"A statute enabling the injured party to recover from insurer of the party causing the injury must be read into the insurance contract, and it cannot be modified or rendered ineffective by provisions of the contract. * * * ” 46 C.J.S. Insurance, § 1191(2), p. 116.
I also believe the “no action” clause of the policy which prohibits direct action against the insurer until the amount of the insured’s obligation has been determined is void and of no effect. The policy must be construed in the light of the statute and not in the light of the terms of the policy.
It is my belief that it was the intent of the Legislature, in enacting Chapter 261 of the Session Laws of 1955 (40-43-07, N.D.C.C.) to provide that political subdivisions could purchase liability insurance and that it authorized a direct proceeding against the insurance company by the claimant as a third-party beneficiary.
For the reasons herein stated I would reverse both orders of the trial court.