Appeal from PETITION FOR REVIEW (INSURANCE COMMISSIONER).
Michael P. Meehan, Meehan & Meehan, Philadelphia, for petitioner.
Victoria A. Reider, Asst. Counsel, Theodie L. Peterson, III, Chief of Litigation, Linda J. Wells, Chief Counsel, Ins. Dept., Harrisburg, for respondent.
Doyle and Smith, JJ. (p.), and Kalish, Senior Judge.
[ 127 Pa. Commw. Page 153]
John P. McDermond (Petitioner) appeals from an order of the Insurance Commissioner revoking all insurance licenses held by Petitioner in the Commonwealth of Pennsylvania and assessing civil penalties for violations of the Unfair Insurance Practices Act (UIPA),*fn1 the Insurance Department Act,*fn2 and the Insurance Company Law of 1921.*fn3 This Court affirms the order of the Insurance Commissioner.
The issues on appeal are whether the findings of the Insurance Commissioner were supported by substantial evidence; whether the revocation and imposition of penalties of $7500 represents an abuse of discretion; whether the Insurance Commissioner improperly made credibility determinations when she had not been present at the administrative hearing; and whether the Insurance Commissioner's proceedings against Petitioner were barred by the two-year statute of limitations set forth at 42 Pa.C.S. § 5524(5) of the Judicial Code.
The Insurance Department filed an Order to Show Cause against Petitioner in December of 1986 and after hearing before a hearing examiner, the Insurance Commissioner issued her Order and Adjudication revoking Petitioner's licenses and assessing civil penalties of $7500. Hence this appeal.*fn4
The Insurance Commissioner found that Petitioner had been a licensed insurance agent in Pennsylvania since 1979 and was employed as a subcontractor by the Investor Guaranty Life Insurance Company (IGL) in 1981 and 1982. During these two years, IGL marketed a modified term life insurance policy called the Liberty Plan Policy approved for sale in New Jersey but not in Pennsylvania. Petitioner sold
[ 127 Pa. Commw. Page 154]
eight of these policies to Pennsylvania residents between June of 1981 and May of 1982 falsely indicating on seven of the applications for policies that New Jersey was the place of sale when in fact the sales had taken place in Philadelphia, Pennsylvania in violation of Section 354 of the Insurance Company Law, 40 P.S. § 477b. Petitioner was also found to have represented that none of the eight applications for life insurance were to be replacements for already existing policies when in fact he knew that one of the applications was for a replacement policy, contrary to 31 Pa.Code §§ 81.4 and 81.7.
It was additionally found that Petitioner, in violation of Sections 4 and 5 of UIPA, 40 P.S. §§ 1171.4 and 1171.5, and Sections 637 and 638 of the Insurance Department Act, 40 P.S. §§ 277 and 278, had misrepresented the terms of the Liberty Plan Policy insofar as it related to loans against the policy causing all eight of the purchasers to erroneously believe that after two years they would be able to borrow against the face value of the policy (as opposed to the cash value) at a low rate of interest. Each purchaser testified that the insurance coverage was purchased in order to obtain its advantageous borrowing features.
Petitioner first argues that the Insurance Commissioner's findings of fact were not supported by substantial evidence. In determining whether substantial evidence exists, this Court must review and evaluate the relevant evidence relied on to determine if a reasonable person would consider it adequate to support the findings. Hammer v. Workmen's Compensation Appeal Board (Gannondale), 105 Pa. Commonwealth Ct. 356, 524 A.2d 550 (1987). A review of the record reveals that testimony was received from all eight purchasers confirming many of the allegations contained in the Order to Show Cause, and Petitioner himself admitted to having violated ...