Opinion
Argued September 14, 1976
December 1, 1976.
Insurance — Application for insurance agent's license — Due process — Procedural regulations — Unavailability of hearing examiner.
1. Due process guarantees are applicable to administrative as well as judicial proceedings. [250]
2. Regulations applicable to licensing proceedings of the Department of Insurance require that, when the officer presiding at the hearing is not available to participate in the required determination, another officer be appointed or the record certified to the Insurance Commissioner for decision after notice to the parties. [250]
Argued September 14, 1976, before Judges CRUMLISH, JR., WILKINSON, JR., and ROGERS, sitting as a panel of three.
Appeal, No. 1772 C.D. 1975, from the Order of the Department of Insurance of the Commonwealth of Pennsylvania in case of Thomas J. MacFarland, Petitioner, Re: Denial of Application for Licensing as Agent of Aetna Life and Casualty Company, dated October 20, 1975.
Application to the Department of Insurance for insurance agent's license. Application denied. Applicant appealed to the Commonwealth Court of Pennsylvania. Held: Reversed and remanded.
Thomas F. Burke, Jr., with him Flanagan, Doran, Biscontini Shaffer, for appellant.
John H. Isom, Assistant Attorney General, with him Paul F. Donohue, Assistant Attorney General, Andrew F. Giffin, Assistant Attorney General, and Robert P. Kane, Attorney General, for appellee.
This is an appeal from an adjudication and order of the Commonwealth of Pennsylvania, Department of Insurance (Department), denying the application of Thomas J. MacFarland (Appellant) for licensing as an insurance agent. Previous to this, by adjudication and order of the Department, Appellant's license as an agent had been permanently revoked for fraudulent conversion of insurance premiums.
A formal hearing was held on Appellant's application in December of 1974. This hearing was conducted by James Keeney, the Department hearing examiner. Following an initial order denying the application, Appellant sought Department review. On October 20, 1975, the Insurance Commissioner (Commissioner) reaffirmed his earlier order denying Appellant's application. Sometime subsequent to the initial hearing but prior to either of the Commissioner's orders, Mr. Keeney left the Department. It is Appellant's contention that the apparent nonparticipation of the hearing examiner was improper.
Framed differently, Appellant alleges a denial of procedural due process based upon an assumed non-participation by the examiner in the adjudication. It is well settled that due process guarantees apply to administrative as well as judicial proceedings. Pioneer Finance Co. v. Pennsylvania Securities Commission, 21 Pa. Commw. 447, 346 A.2d 890 (1975). The due process concept in this context is particularly important in light of the significance of Appellant's credibility to a determination of Appellant's rehabilitation in establishing his fitness for a license.
Regulation 35.203, 1 Pa. Code § 35.203, controls the issue raised by Appellant. It provides as follows:
Unavailability of presiding officer. If a presiding officer becomes unavailable to the agency, the agency head, will either designate another qualified officer to prepare a proposed report or will cause the record to be certified to it for decision, as may be deemed appropriate, giving notice to the parties.
We find nothing in the record which enables us to find compliance by the Department with the foregoing regulation.
Appellant has appended to his brief a letter dated July 31, 1975, from the Department in response to his own earlier letter of July 14, 1975. Though this letter does refer to Mr. Keeney's departure from the Department, it was not made a part of the record and we cannot rely upon it to establish compliance with Regulation 35.203.
We therefore must
ORDER
AND NOW, this 1st day of December, 1976, the order of the Department of Insurance denying the license application of Thomas J. MacFarland is hereby reversed and the matter is remanded to the Insurance Commissioner with a direction that a full hearing be held to determine the merits of the application.