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NORWOOD A. MCDANIEL AGENCY v. CONSTANCE B. FOSTER (02/01/88)

decided: February 1, 1988.

NORWOOD A. MCDANIEL AGENCY, PETITIONER
v.
CONSTANCE B. FOSTER, INSURANCE COMMISSIONER, COMMONWEALTH OF PENNSYLVANIA AND THE AETNA CASUALTY AND SURETY COMPANY, RESPONDENTS



Original Jurisdiction in the case of Norwood A. McDaniel Agency v. Constance B. Foster, Insurance Commissioner, Commonwealth of Pennsylvania and The Aetna Casualty and Surety Company.

COUNSEL

Michael A. Dillon, with him, William R. Balaban, Balaban & Balaban, for petitioner.

Karen Gantt, with her, Terrance J. Fitzpatrick, Linda Wells, Chief Counsel, for respondent, Insurance Commissioner.

M. Hannah Leavitt, Baskin, Flaherty, Elliott, Mannino & Beren, for respondent, Aetna Casualty & Surety Company.

Judge Doyle. Opinion and Order by Judge Doyle.

Author: Doyle

[ 117 Pa. Commw. Page 228]

Before us in our original jurisdiction is an application for peremptory mandamus and preliminary injunction filed by the Norwood A. McDaniel Agency (Petitioner). Petitioner is engaged in the insurance business in Pennsylvania and is an "agent" as that term is defined in Section 1 of the Act of September 22, 1978, P.L. 763, as amended, 40 P.S. ยง 241 (Act 143). Respondent Aetna Casualty and Surety Company (Aetna) is an insurer as defined in Section 1 of Act 143 and is licensed by Respondent Insurance Department.

By letter dated July 22, 1987 Aetna notified Petitioner that the agency agreement which had existed between the parties for twenty-nine years was terminated insofar as it affected Petitioner's rights to write personal property and casualty lines with Aetna (essentially home owners and automobile liability policies). The letter gave October 31, 1987 as the effective date of termination, but this date was later extended by agreement to January 1, 1988. The July letter advised Mr. McDaniel,

[ 117 Pa. Commw. Page 229]

    head of the Petitioner agency, of his right to request review of the termination decision by the Insurance Commissioner.*fn1 Petitioner timely requested review in a letter dated July 29, 1987.*fn2

Section 2 of Act 143 provides in pertinent part:

(d) Administrative review. -- Any agent may within 30 days of receipt of notice of termination, request in writing to the Insurance Commissioner that he review the action of the insurer for the purpose of determining that said termination was in compliance with the provisions of this section.

(e) Restriction on termination. -- No insurer shall terminate its contract with an agent due to the adverse experience of a single year. Prior to such termination it shall be the obligation of the insurer to demonstrate that it ...


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