Appeal from the Order of the Pennsylvania Insurance Department in the case of In Re: Central Mortgage Company d/b/a Tri-Arc Agency and Joshua Bornstein, John W. Walleigh, Jr., and William C. McLaughlin, No. aA3-8-10.
Lawrence J. Beaser, with him, Richard L. Kremnick and Wei-Wei Chiu, Blank, Rome, Comisky & McCauley, for petitioners.
Albert J. Strohecker, III, Deputy Chief Counsel, with him, M. Hannah Leavitt, Chief of Litigation, and Paul Laskow, Chief Counsel, for respondent.
Karen M. Balaban, Balaban & Balaban, for intervenors.
Judges MacPhail and Doyle, and Senior Judge Rogers, sitting as a panel of three. Opinion by Judge Doyle.
[ 100 Pa. Commw. Page 234]
This is an appeal by Central Mortgage Company d/b/a Tri-Arc Agency (Central) from an order of the Acting Insurance Commissioner (Commissioner) which denied Central's motion for summary judgment, granted the Insurance Department's (Department's) motion for summary judgment, and revoked the insurance licenses held by Central, its officers, and an employee*fn1 with the
[ 100 Pa. Commw. Page 235]
exception of any licenses to sell credit life insurance, health and accident insurance, and to sell and underwrite title insurance.
The relevant facts are not in dispute. Central is a Pennsylvania corporation licensed as a corporate entity to engage in the insurance business in Pennsylvania. It was purchased by the Industrial Valley Title Insurance Corporation in 1964 at which time Central owned a subsidiary known as Penn Central Insurance Agency. In 1966 Central and this subsidiary merged and the insurance business continued as a division of Central. In 1972 Central began doing business under the name of Tri-Arc Agency. As of February 28, 1975 all of Central's outstanding stock was owned by Central Valley Company, a wholly owned subsidiary of Industrial Valley Title Insurance Corporation, which was in turn a wholly owned subsidiary of Industrial Valley Bank (IVB). On December 15, 1982 all of Central's outstanding stock was acquired from IVB by the Philadelphia Savings Fund Society (PSFS). Subsequently, all of Central's outstanding stock was contributed by PSFS to one of its wholly owned subsidiaries. The instant litigation arose in 1982 after Central was acquired by PSFS and concerns the question of whether Central, its officers and employees can legally retain their insurance licenses. It is undisputed that both IVB and PSFS are lending institutions falling within the ambit of Section 641(b) of The Insurance Department Act of 1921*fn2 (1921 Act), 40 P.S. § 281(b). It is also undisputed that neither IVB nor PSFS is licensed as an insurance company in Pennsylvania. Section 641(b) provides:
No lending institution, public utility, bank holding company, savings and loan holding company
[ 100 Pa. Commw. Page 236]
or any subsidiary or affiliate of the foregoing, or officer or employe thereof, may, directly or indirectly, be licensed or admitted as an insurer or be licensed to sell insurance in this State either as a broker or as an agent except that a lending institution or bank holding company, subsidiary or affiliate of a lending institution may be licensed to sell credit life, health and accident insurance and to ...