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PHILLIP SEIDMAN v. INSURANCE COMMISSIONER COMMONWEALTH PENNSYLVANIA AND GEORGE F. GRODE (10/22/87)

decided: October 22, 1987.

PHILLIP SEIDMAN, T/A PHIL SEIDMAN INSURANCE, PETITIONER
v.
THE INSURANCE COMMISSIONER OF THE COMMONWEALTH OF PENNSYLVANIA AND GEORGE F. GRODE, ACTING COMMISSIONER OF THE COMMONWEALTH OF PENNSYLVANIA, RESPONDENTS



Appeal from the Order of the Insurance Commissioner of the Commonwealth of Pennsylvania, in case of In Re: Phillip Seidman t/a Phil Seidman Insurance, No. A85-5-6.

COUNSEL

Malcolm H. Waldron, Jr., for petitioner.

Jean M. Callihan, Assistant Counsel, with her, Regina L. Matz, Assistant Counsel, Linda J. Wells, Chief of Litigation, and M. Hannah Leavitt, Chief Counsel, for respondents.

Michael A. Dillon, with him, William R. Balaban, Balaban and Balaban, for amicus curiae, Professional Insurance Agents of Pennsylvania, Maryland and Delaware, Inc., and John T. Abram.

Judge Colins, and Senior Judges Barbieri and Narick, sitting as a panel of three. Opinion by Senior Judge Barbieri.

Author: Barbieri

[ 110 Pa. Commw. Page 403]

Phillip Seidman appeals an order of the Insurance Commissioner (Commissioner) suspending his broker's license for ninety days and fining him $5,000.00 for violations of the Insurance Department Act of 1921,*fn1 Section 4 of the Unfair Insurance Practices Act*fn2 and a regulation requiring the speedy remittance of premium payments to the Pennsylvania Automobile Insurance Plan*fn3 (Plan).

Petitioner is a licensed insurance agent and broker in the Commonwealth of Pennsylvania. On May 15, 1985, the Insurance Department filed an Order to Show Cause alleging that on four occasions during January and February of 1984, Petitioner required clients to pay a fee for placement in the Plan and accepted cash for premium payments in violation of Plan rules and 31 Pa. Code ยง 33.29(d). In three of the four instances, the Order to Show Cause also alleged delays between the application date and remittance to the plan.

The Insurance Commissioner found that Petitioner requires each client to sign an agreement stating that

[ 110 Pa. Commw. Page 404]

    they agree to pay Phillip Seidman Insurance a twenty dollar fee for the following services: "office consultation, credit evaluation, money order services, record keeping, computer service, telephone inquiry service, claim application service and other related services." The agreement also expressly provides that the client has been informed that no fee is charged for making application for insurance or placing insurance as that is paid to the agency as a commission by the insurer.

Section 21(3) of the Pennsylvania Automobile Insurance Plan provides:

The Pennsylvania Insurance Department prohibits licensed insurance agents and brokers acting as producers from making any additional charge or charging any fee for the placing of any coverage in the Plan. Producer remuneration shall be limited to the commission allowance on the collected earned premium.

Further, Department regulations provide in pertinent part:

Upon original applications, premium monies to the producer of record shall be in the form of a postal money order, cashier's check, certified check, or personal check made payable to the 'Pennsylvania Automobile Insurance Plan.' The producer of record shall ...


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