The opinion of the court was delivered by: Senior Judge Flaherty
Argued: September 13, 2010
BEFORE: HONORABLE BONNIE BRIGANCE LEADBETTER, President Judge HONORABLE P. KEVIN BROBSON, Judge HONORABLE JIM FLAHERTY, Senior Judge
David E. Robbins (Petitioner) petitions this court for review of a September 21, 2009 decision of the Insurance Commissioner (Commissioner), which affirmed the decision of the Insurance Department (Department) which held that USAA Casualty Insurance's (USAA) refusal to write an automobile insurance policy for Petitioner did not violate Sections 2001-2013 of the Act commonly known as "Act 68", Act of May 17, 1921, P.L. 682, as amended, added by Section 1 of the Act of June 17, 1998, P.L. 464, 40 P.S. §§991.2001 - 991.2013. We affirm.
USAA is a Texas domiciled reciprocal insurance company providing insurance to active, retired and separated military personnel and their dependents. Because membership in that class is a prerequisite to obtaining a policy, non-members are not eligible to receive a USAA policy on the voluntary market. USAA, as a condition of doing business in Pennsylvania, however, is also required to write policies for individuals through the Pennsylvania Assigned Risk Plan (Plan).
In 1991, the Plan assigned Ms. Gilla Mendels, Petitioner's future wife, to USAA and the company provided coverage to her. In 1994, Ms. Mendels married Petitioner. Her policy (a.k.a. Gilla Robbins) was amended to add Petitioner as a named insured by USAA. Petitioner owned one vehicle in his own name. Petitioner presented USAA bills and documents for 2007 which contained both Petitioner's and Ms. Mendels' name. Petitioner further stated that he was covered by USAA for over ten years and paid the premiums to USAA throughout that time. In 2008, Ms. Mendels and Petitioner separated. USAA's policy does not cover a non-resident spouse. USAA removed Petitioner from Ms. Mendels' policy. Petitioner requested insurance coverage from USAA but the company refused to write a policy for him, as he did not meet the membership requirements.*fn1
Petitioner requested that the Department's Bureau of Consumer Services review USAA's actions. Petitioner contended that USAA cancelled his automobile insurance coverage and did not offer any written notice to him. USAA contended that Petitioner was not the policyholder, as his coverage arose from his wife's original assigned risk policy. After investigating the matter, the Department issued an investigative report holding that USAA's actions complied with Act 68, which governs the issuance and termination of automobile insurance policies. Petitioner appealed the Department's determination and requested an administrative hearing.
The Commissioner affirmed this ruling on August 20, 2009. It determined that Petitioner was never assigned to USAA by the Plan nor had he applied for a policy on his own through that system. It determined that, inasmuch as Petitioner's wife had added Petitioner to her policy, such action was not an issuance of a policy to Petitioner, but rather a modification of Ms. Mendels' policy. According to the Commissioner, "USAA did not terminate that policy but rather continues it in accordance with the law, Plan Rules and Insurance Department regulations. The policy was not canceled and [the] limitations on cancellation are irrelevant." Commissioner's opinion, August 20, 2009 at 8. Petitioner appealed to this court.*fn2
Petitioner contends that the Commissioner erred in rejecting Petitioner's objection to evidence and materials presented by the insurance carrier's representative who was not licensed to practice law in Pennsylvania; in permitting USAA to avoid Act 68, which limits the permissible reasons for terminating a non-original insured's coverage and requires specific notice to non-original insureds, when insurer initially provided automobile insurance coverage to a person on an assigned risk basis and thereafter provided coverage to that person and her (then new) spouse for a period of over ten years and where the contract reflects both husband and wife as named insureds and the couple then separates and the USAA treats the spouse as requiring new insurance; and, where both spouses were identified as 'named insured' and the USAA treated one as not a direct insured and terminated the non-direct insured without meeting the notice and other provisions of Act 68.
Initially, Petitioner argues that the Commissioner erred in rejecting Petitioner's objections to evidence and materials presented by USAA's representative who was not licensed to practice law in Pennsylvania.
At the opening of the December 3, 2008, hearing, presiding Officer Johnson acknowledged that Mr. Joy was present on behalf of USAA. Mr. Joy identified himself as Assistant Vice President and representative for USAA and his appearance is listed on the hearing notes as "Representative for the Insurer." R. at 54a. The docket sheet further reflects that Mr. Joy did not enter an appearance as counsel on behalf of USAA. R. at 1a. Petitioner did not object to the presence of Mr. Joy at that time or at any point during the hearing. Had he done so, Officer Johnson could have addressed the objection in a timely fashion with both Mr. Joy and Petitioner. Mr. Joy could have clarified any misperceptions about his role, if necessary, and a factual record on the issue could have been created. "The administrative tribunal must be given the opportunity to correct its errors as early as possible.." Goods v. Pennsylvania Board of Probation and Parole, 590 Pa. 132, 912 A.2d 226 (2006).
The Commissioner properly determined that Petitioner waived any issues as to the participation of Mr. Joy at the hearing, as Petitioner failed to object at the time of the hearing. A legal theory is waived when it is not timely raised before the administrative tribunal. Dehus v. Unemployment Compensation Board of Review, 545 A.2d 434 (Pa. Cmwlth. 1988).*fn3
Next, Petitioner argues that where an insurer initially provides automobile insurance coverage to a person on an assigned risk basis and thereafter provides coverage to that person and her (then new) spouse for a period of over ten years and where documents of insurance reflects both husband and wife as "named insureds", that the couple's separation should not be treated by the insurer as a basis for treating the non-original insured as requiring new insurance and thus avoiding Act 68, which limits the permissible reasons for terminating the non-original insured's coverage and requires specific notice to non-original insureds.
The Commissioner properly affirmed the Department's determination that USAA's refusal to write an automobile insurance policy for Petitioner did not violate Act 68. The conduct of insurers in their cancellation of automobile insurance policies and in their underwriting decisions to refuse to write policies or to refuse to renew policies is regulated by Pennsylvania statute. Beitler v. Department of Transportation, 811 A.2d 30, 34 (Pa. Cmwlth. 2002), appeal denied, 576 Pa. 714, 839 A.2d 353 (2003). In the present controversy, Petitioner's ...