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FAIRMOUNT INSURANCE COMPANY (A DOMESTIC STOCK CASUALTY CO.) v. COMMONWEALTH PENNSYLVANIA (09/13/84)

decided: September 13, 1984.

FAIRMOUNT INSURANCE COMPANY (A DOMESTIC STOCK CASUALTY CO.), PETITIONER
v.
COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT, RESPONDENT



Appeal from the Order of the Insurance Commissioner of the Commonwealth of Pennsylvania in the case of In Re: Fairmount Insurance Company, Petition for Relief from Agency Action, Docket No. C83-10-6.

COUNSEL

William J. Kuntz, with him, William R. Balaban, Balaban and Balaban, and Alfred Sarowitz, Margolis, Edelstein, Scherlis, Sarowitz and Karemer, for petitioner.

Samuel R. Marshall, Assistant Counsel, for respondent.

Judges Rogers, MacPhail and Barbieri, sitting as a panel of three. Opinion by Judge MacPhail.

Author: Macphail

[ 85 Pa. Commw. Page 132]

This matter comes to us as an appeal by Fairmount Insurance Company (Company) from an interlocutory order of the Acting Insurance Commissioner (Commissioner) which has been certified as involving a controlling question of law as to which there is a substantial ground for difference of opinion, pursuant to Section 702 of the Judicial Code, 42 Pa. C.S. § 702. The central issue is the interpretation of Section 215(a)

[ 85 Pa. Commw. Page 133]

    of The Insurance Company Law of 1921 (Law), Act of May 17, 1921, P.L. 682, as amended, 40 P.S. § 405(a).

The Company filed Articles of Agreement which were approved by the Pennsylvania Insurance Department (Department) in accordance with Section 211 of the Law, 40 P.S. § 401. Subsequently, the Governor approved the Articles of Agreement and issued Letters Patent. The president of the Company notified the Commissioner that the Company was ready to commence doing business, seeking a Certificate of Authority. Although the Company otherwise had complied with the requirements of Section 215(a) of the Law, the Commissioner refused to issue the Certificate of Authority pending an examination of the qualifications of the incorporators and directors of the Company, pursuant to the supplemental paragraph of Section 215 of the Law, 40 P.S. § 405.

The Company argues that the Commissioner may not now refuse to issue the Certificate of Authority, the Articles of Agreement having been approved and the Letters Patent issued. The Company would have us determine that the supplemental paragraph of Section 215 requires the examination of incorporators and directors prior to the approval of the Articles of Agreement. We cannot do so.

Section 215(a) of the Law provides that:

As soon as the entire amount of the authorized capital of a stock insurance company, incorporated under this act, has been paid in, certificates shall be issued therefor to the persons entitled to receive the same, which certificates shall be transferable upon the books of the company; and the president or secretary of the company shall notify the Insurance ...


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