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decided: March 4, 1988.


Appeal from the Order of the Pennsylvania Insurance Commissioner, in case of In Re: B. G. Balmer and Company, Docket No. P86-1-17.


Harvey Bartle, III, Dechert, Price & Rhoads, for petitioner.

James A. M. Zarrella, Assistant Counsel, with him, Terrance J. Fitzpatrick, Chief of Litigation, and Linda J. Wells, Chief Counsel, for respondent.

President Judge Crumlish, Jr., and Judges Barry and Colins, sitting as a panel of three. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 114 Pa. Commw. Page 240]

B. G. Balmer & Company, Inc. (Balmer), appeals a Pennsylvania Insurance Commissioner's*fn1 (Commissioner) adjudication suspending its insurance business license for fifteen days, ordering it to cease and desist from unfair practices, and directing restitution pursuant to the Pennsylvania Unfair Insurance Practices Act (UIPA).*fn2 We affirm.*fn3

The Insurance Department initiated an action against Balmer by filing an order to show cause,*fn4 alleging

[ 114 Pa. Commw. Page 241]

    that Balmer violated Section 4 and 5(a)(1)(i) *fn5 of the UIPA by charging a hidden fee to a corporate client, The Saunders House. The Commissioner denied Balmer's subsequent motion for summary judgment which alleged that the Department's action was time-barred under Section 5524(5) of the Judicial Code.*fn6 After a hearing, the Commissioner found that Balmer had charged Saunders House for risk management services which were neither contracted for nor received. The Commissioner concluded that the fee was listed as a premium in an effort to deceive Saunders House and imposed the aforementioned sanctions.

Balmer initially argues that the Insurance Department's enforcement proceeding is time-barred under Section 5524(5) of the Judicial Code. We disagree.

Section 5524(5) of the Judicial Code provides a two-year limitation for an action upon a statute for a civil penalty or forfeiture. Section 11 of the UIPA*fn7 authorizes only courts to impose civil penalties. Because the Commissioner was acting under his limited power to impose administrative penalties pursuant to Section 9 of the

[ 114 Pa. Commw. Page 242]

UIPA,*fn8 we hold that Balmer's reliance on Section 5524(5) of the Judicial Code is misplaced.*fn9

Balmer next argues that there is no substantial evidence to support the Commissioner's findings that management services were never contracted for nor provided and that the fee was deliberately concealed.

The record reveals that conflicting evidence was presented to the Commissioner as to whether Saunders House was aware of the management fee. A Balmer representative testified that a valid oral contract existed,*fn10 while the comptroller stated that he could not recall such a conversation taking place.*fn11 Additionally, the record reflects that Balmer originally billed Saunders House for a premium*fn12 and merely renamed the charge an administrative fee after the comptroller's inquiry.*fn13

[ 114 Pa. Commw. Page 243]

The Commissioner's findings represent credibility determinations which, as a matter of administrative law, we cannot review on appeal. Yuhas v. Workmen's Compensation Appeal Board (City of Pittsburgh), 82 Pa. Commonwealth Ct. 390, 393, 476 A.2d 1377, 1379 (1984).

Finally, Balmer contends that the Commissioner's order suspending Balmer's license for fifteen days and directing restitution is an abuse of discretion. Department of Environmental Resources v. Mill Service, Inc., 21 Pa. Commonwealth Ct. 642, 347 A.2d 503 (1975).

The Commissioner is empowered to suspend the license of a violator under Section 9 of the UIPA. Having found substantive support for the violation, we hold that a fifteen-day suspension is reasonable in light of the Commissioner's conclusion that Balmer's practices were "unfair and deceptive."*fn14

In support of the restitution order, the Commissioner argues that although not expressly granted, restitutionary power is implied in the UIPA.

Section 8(e)*fn15 of the UIPA instructs the Commissioner to state "what remedial action, if any, is required of the person charged." (Emphasis added.) Additionally, the UIPA provides the Commissioner with equitable remedies. Section 9 authorizes the Commissioner to issue a cease and desist order while Section 10 of the UIPA*fn16 permits the Commissioner to seek an injunction if a cease and desist order is not complied with.

In Fahringer, McCarty & Grey, Inc. v. Workmen's Compensation Appeal Board (Green), 107 Pa. Commonwealth Ct. 597, 529 A.2d 56 (1987), we interpreted

[ 114 Pa. Commw. Page 244]

Section 413 of The Pennsylvania Workmen's Compensation Act (Act)*fn17 as conferring remedial restitutionary powers upon the Board. While certain remedial powers were specifically granted in Section 413, the authority to order restitution was not mentioned.

Likewise, we believe that the Commissioner is not precluded from employing certain equitable principles in fashioning a remedy where, as here, Balmer's charging Saunders House a fee for services not provided resulted in unjust enrichment. In this case, because a violation of the UIPA resulted in unjust enrichment, restitution was an appropriate remedy within the Commissioner's power.*fn18

Therefore, in light of the applicable statutory provisions, the Commissioner's order of restitution is not an abuse of discretion under the circumstances. We affirm the order of the Commissioner.


The order of the Insurance Commissioner, No. P86-1-17 dated February 6, 1987, is affirmed.



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