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ERIE INSURANCE COMPANY v. CONSTANCE B. FOSTER (06/15/89)

filed: June 15, 1989.

ERIE INSURANCE COMPANY, PETITIONER
v.
CONSTANCE B. FOSTER, IN HER OFFICIAL CAPACITY AS COMMISSION OF THE PENNSYLVANIA INSURANCE DEPARTMENT, RESPONDENT



PETITION FOR REVIEW (INSURANCE DEPARTMENT).

COUNSEL

Richard DiSalle, Esq., Susan Hileman Malone, Esq., ROSE, SCHMIDT, HASLEY & DiSALLE, Pittsburgh, Pennsylvania, for PETITIONER.

Kenneth B. Allen, ASST. COUNSEL, Theodie L. Peterson, Esq., CHIEF OF LITIGATION, LINDA J. WELLS, ESQ., Victoria A. Reider, DEP. CHIEF COUNSEL, INSURANCE DEPT. Harrisburg, Pennsylvania, for RESPONDENT.

Before: Honorable James Crumlish, Jr., President Judge, Honorable James Gardner Colins, Judge, Honorable Alexander F. Barbieri, Senior Judge

Author: Colins

[ 126 Pa. Commw. Page 602]

OPINION BY JUDGE JAMES GARDNER COLINS

Erie Insurance Company (petitioner) petitions for review of a September 29, 1988 order of the Insurance Commissioner (Commissioner) which reversed the Insurance Department's (Department) decision that petitioner's non-renewal of the automobile insurance policy of Bruce D. Franks (insured) was not in violation of what is commonly known as Act 78.*fn1 We reverse.

The insured, who has been deaf since birth, received notice from petitioner on October 28, 1987, of its intention not to renew his policy. This decision was based on the petitioner's discovery that the insured had misrepresented his hearing impairment on a customer questionnaire. Question No. 8 on petitioner's renewal form stated: "Does any

[ 126 Pa. Commw. Page 603]

    driver or any member of the household have a physical or mental impairment or disability or other medical infirmity? Identify such condition (heart, diabetes, epilepsy, sight/limb loss, back condition or other medical infirmity), its duration and treatment obtained and/or medication prescribed." The insured answered "no" to this question.

The insured's written request to the Department to review petitioner's notice of non-renewal was denied on December 4, 1987, because the Department determined that the petitioner's non-renewal was not in violation of Act 78. An administrative hearing was held on February 29, 1988, which resulted in the Commissioner's September 29, 1988, order reversing the Department. The Commissioner ruled the misrepresentations were not knowingly false and were not material to the risk, since the insured had a clean driving record for the previous four years. It is petitioner's appeal from the Commissioner's September 29, 1988, order that is presently before this Court.

Our scope of review is limited to a determination of whether constitutional rights have been violated, an error of law has been committed, or the findings of fact are not supported by substantial evidence. Komada v. Browne, 97 Pa. Commonwealth Ct. 19, 508 A.2d 1284 (1986). The resolution of this matter turns on the interpretation of Section 3(a)(12) of Act 78 which states:

(a) No insurer shall cancel or refuse to write or renew a policy of automobile insurance for one or ...


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