Appealed From No. PH94-07-006 and PH95-03-07. State Agency, Department of Insurance.
Before: Honorable Joseph T. Doyle, Judge, Honorable Rochelle S. Friedman, Judge, Honorable Charles A. Lord, Senior Judge. Opinion BY Judge Doyle.
The opinion of the court was delivered by: Doyle
Before us in our appellate jurisdiction are the consolidated appeals of the Erie Insurance Company and the Erie Insurance Exchange (collectively, Erie) from two orders of the Pennsylvania Insurance Commissioner (Commissioner) affirming two determinations rendered by the Pennsylvania Insurance Department (Department), which held that the cancellation of the insurance policies of Kimberly Ann Mack and John Angelini violated the Act of June 5, 1968, P.L. 140, No. 78, as amended, 40 P.S. §§ 1008.1-.11 (Act 78 or Act).
Kimberly Ann Mack was initially issued an automobile insurance policy by the Erie Insurance Company in 1985 under her maiden name Kimberly Ann Garber. She remained an insured of that company thereafter and renewed her policy for the relevant policy period of August 7, 1993, through August 7, 1994. In February of 1994, Ms. Garber married John Joseph Mack, Jr., after which she contacted Erie to request that her name be changed accordingly on her automobile insurance policy. On May 13, 1994, Erie mailed a Notice of Cancellation to Kimberly Ann Mack, which stated the following:
John Joseph Mack, Jr.'s Pennsylvania Motor Vehicle Record, secured by Equifax Services . . . reveals the following: 3/12/92 -- suspension for 140 days, and 10/2/93 -- suspension for one year. John Joseph Mack, Jr.'s Pennsylvania operator's license is suspended. As John Joseph Mack, Jr.'s operator's license is currently suspended, we are cancelling your policy.
(Mack Notice of Cancellation; Reproduced Record (R.R.) at 23a.) The Notice of Cancellation was addressed only to Mrs. Mack and named only "Kimberly Ann Mack" as the named insured. Mrs. Mack was the only person named on the declarations page of the policy, and John Joseph Mack was at no time listed on the policy as a named insured.
After receiving the Notice of Cancellation, Mrs. Mack filed a timely request for review of the policy cancellation with the Department. The Department issued an Investigative Report/Order on June 17, 1994, in which it found that Erie had violated Act 78 in cancelling her policy. Erie subsequently appealed the order to the Commissioner. On September 14, 1994, a hearing was held before a duly-appointed hearing officer, after which former Commissioner Linda S. Kaiser issued an Adjudication and Order, dated September 24, 1996, affirming the Department's prior determination. The Commissioner's order also directed Erie to cease and desist from cancelling Mrs. Mack's automobile insurance policy. Erie subsequently appealed from the Commissioner's September 24, 1996 order to this Court.
The other consolidated appeal in this case involves substantially similar facts. On February 28, 1995, Erie mailed a Notice of Cancellation to John N. Angelini, which stated in relevant part:
According to Mrs. Angelini's Pennsylvania Motor Vehicle Record, secured by Equifax Services . . . her license was suspended for one month effective October 26, 1994. We are cancelling your policy because of her license suspension during the policy period.
(Angelini Notice of Cancellation; R.R. at 88a.) The Notice of Cancellation was addressed to John Angelini and lists only Mr. Angelini as the "named insured." Mrs. Angelini at no time appeared on the policy as a named insured.
Upon receiving the Notice of Cancellation, Mr. Angelini filed a timely request for review of the policy cancellation by the Department. The Department issued an Investigative Report/Order on March 10, 1995, in which it found that Erie had violated Act 78 by cancelling Mr. Angelini's policy. Erie filed a timely appeal of the Investigative Report/Order with the Commissioner, and, on June 22, 1995, a hearing was held before a duly-appointed hearing officer. By order dated January 2, 1997, Commissioner Kaiser affirmed the previous determination of the Department and further directed that Erie cease and desist from cancelling Mr. Angelini's automobile insurance policy. Erie subsequently appealed from that order.
This Court's standard of review on appeal from an order of the Insurance Commissioner is limited to a determination of whether constitutional rights have been violated, an error of law was committed, or whether the findings of fact were supported by substantial evidence. Nationwide Mutual Insurance Company v. Foster, 134 Pa. Commw. 585, 580 A.2d 436, 438 (Pa. Commw. 1990).
In this case, the governing statutory provisions of Act 78 are at odds with the contractual definition of "named insured" in both automobile insurance policies involved in this appeal. This case, therefore, presents the issue of whether or not the definition of the term "named insured" contained in the insurance ...