Opinion
Argued September 15, 1981
December 31, 1981.
Insurance — Refusal to renew auto policy — Scope of appellate review — Violation of constitutional rights — Error of law — Findings of fact — Substantial evidence — Act of June 5, 1968, P.L. 140 — Basis for refusal to renew — Accidents.
1. Review by the Commonwealth Court of Pennsylvania of an order of the Insurance Commissioner is to determine whether constitutional rights were violated, an error of law was committed or findings of fact were unsupported by substantial evidence. [545]
2. An insurance company is not permitted to refuse to renew an automobile policy for any reason or any combination of reasons set forth in Section 3(a) of the Act of June 5, 1968, P.L. 140. [545]
3. An insurance company is not permitted to refuse to renew an automobile policy on the basis of one accident within a specified period under Section 3(b) of the Act of June 5, 1968, P.L. 140, although the insured in the same period was involved in incidents set forth in Section 3(a) of the statute. [546]
Argued September 15, 1981, before President Judge CRUMLISH and Judges MENCER, ROGERS, BLATT, CRAIG, MacPHAIL and PALLADINO.
Appeals, Nos. 160 C.D. 1980 and 161 C.D. 1980, from the Order of the Insurance Commissioner in case of In Re: Appeal of Travelers Insurance Company pursuant to the Act of June 5, 1968, P.L. 140, No. 78, as amended ( 40 P. S. § 1008.1 et seq.), Policy No. 161-42-935-101-2, Robert, J. Clark, Docket No. P79-7-4; and in case of In Re: Appeal of Travelers Indemnity Company pursuant to the Act of June 5, 1968, P.L. 140, No. 78, as amended ( 40 P. S. § 1008.1 et seq.), Policy No. 18520289-101-2, Joseph Koch, Docket No. P79-7-2.
Non-renewal of insurance policies appealed by policyholders to Department of Insurance. Renewal ordered. Insurer appealed to the Insurance Commissioner. Renewal ordered. Insurer appealed to the Commonwealth Court of Pennsylvania. Held: Affirmed.
S. Walter Foulkrod, III, Foulkrod, Peters, Frank Wasilefski, for petitioner.
Hannah Leavitt, Assistant Attorney General, with her James R. Farley, Assistant Attorney General, and Edward R. Biester, Jr., Attorney General, for respondent.
Travelers Indemnity Company of America appeals two Insurance Commission orders directing Travelers to renew two automobile insurance policies. We affirm.
Travelers refused to renew two policies based on Sections 3(a) and 3(b) of the Act of June 5, 1968, P.L. 140, as amended, 40 P. S. § 1008.3, which provides in part:
(a) No insurer shall cancel or refuse to write or renew a policy of automobile insurance for one or more of the following reasons:
(1) Age.
. . . .
(13) Any accident which occurred under the following circumstances:
(i) auto lawfully parked (if the parked vehicle rolls from the parked position then any such accident is charged to the person who parked the auto);
(ii) the applicant, owner or other resident operator is reimbursed by, or on behalf of, a person who is responsible for the accident or has judgment against such person;
(iii) auto is struck in the rear by another vehicle and the applicant or other resident operator has not been convicted of a moving traffic violation in connection with this accident.
(14) Any claim under the comprehensive portion of the policy unless such loss was intentionally caused by the insured.
(b) No insurer shall cancel or refuse to renew a policy of automobile insurance on the basis of one accident within the thirty-six month period prior to the upcoming anniversary date of the policy. (Emphasis added.)
Both policies were non-renewed because the insureds were involved in more than one incident listed in Section 3(a) and one accident described in Section 3(b).
Our scope of review of an Insurance Commission order is limited to a determination of whether constitutional rights have been violated, an error of law was committed or the findings of fact were not supported by substantial evidence, Crown Life Insurance Co. v. Department of Insurance, 39 Pa. Commw. 94, 394 A.2d 1305 (1978).
Travelers first contends that Section 3(a) merely prohibits non-renewal based on a single reason listed, but allows refusal to renew based on more than one circumstance enumerated. In effect, Travelers would have us substitute the word "one" for "any" in Section 3(a)(13) and (14). We find this interpretation patently absurd. It is clear that the wording and intent of this statute prohibits an insurer from cancelling, or refusing to write or renew a policy for any, whether it be one or more of the reasons listed in this section. These reasons and incidents constitute either immutable characteristics such as age and race or are incidents which were not the fault of the insured, or for which the insurer was not required to make any payment.
One of the insured's daughters had been driving for approximately two years when she was involved in one of the accidents listed as a reason for non-renewal. The Insurance Commissioner held, and we agree that, "inexperience" was in this case a subterfuge for basing non-renewal on age, which is prohibited by Section 3(a)(1).
We agree with the Insurance Commissioner's analysis of Section 3(a) contained on page seven of his January 3, 1980 opinion:
The literal construction of the statute above also comports with the reasonable intent of the legislature. In § 3(a) of the Act, the legislature provided a list of reasons which it prohibited as bases for nonrenewal or termination. The fact that there were several incidents falling under § 3(a) would logically have no effect, unless the legislature clearly stated its intent to the contrary. To adopt Travelers' view would permit cancellations on such clearly unfair grounds as a combination of sex, age, and one accident, or religion, place of residence, and one accident. Likewise, the fact that there were two incidents under the same subsection (for example, two accidents under § 3(a)(13)) does not supply grounds for termination of the policy when one incident would not do so.
Alternatively, Travelers asserts that it may refuse to renew for a combination of Section 3(a) incidents and one Section 3(b) accident. Travelers contends that the word "accident" in Section 3(b) should be read to include Section 3(a) accidents and incidents. We disagree.
Section 3(b) is clear, an insurer may not cancel or refuse to renew for one accident within the statutory period. We are persuaded by the language contained on page nine of the Commissioner's opinion dated January 3, 1980:
[I]f an accident is specifically listed as prohibited basis for termination under § 3(a)(13) or any other section of the law, it should not be interpreted as a valid basis under another section, including § 3(b). Thus the combination of one accident covered exclusively under § 3(b) and any number of accidents covered under § 3(a) does not provide a valid basis for nonrenewal under the Act.
In both cases at issue, there was only one Section 3(b) accident attributable to the insured. Travelers urges a construction of this statute which would penalize an insured for circumstances or incidents over which he has no control. We will not contravene the plain language and intent of the statute.
We find the Travelers' other contentions to be without merit and will not address them.
Affirmed.
ORDER
The orders of the Insurance Commissioner, No. P79-7-2 dated December 21, 1979, and No. P79-7-4 dated January 3, 1980, are affirmed.