Title: Wyoming Ins. Dept. v. Avemco Ins. Co.

State: wyoming

Issuer: Wyoming Supreme Court

Document:

Wyoming Ins. Dept. v. Avemco Ins. Co.1986 WY 186726 P.2d 507Case Number: 86-92Decided: 10/10/1986Supreme Court of Wyoming
WYOMING INSURANCE 
DEPARTMENT, Appellant (Respondent),

v.

AVEMCO INSURANCE COMPANY, 
Appellee (Petitioner), Colonial Penn Insurance Company, Appellee 
(Intervenor).

Appeal from District 
Court, LaramieCounty, Joseph F. Maier, 
J.

A.G. McClintock, 
Atty. Gen., Gerald A. Stack, Deputy Atty. Gen., John W. Renneisen and Sylvia Lee 
Hackl, Sr. Asst. Attys. Gen., for 
appellant.

George E. 
Powers, Jr. of Godfrey, Sundahl & Jorgenson, Cheyenne, for appellee Avemco Ins. 
Co.

Julie Nye 
Tiedeken of Southeast Wyoming Law Office of Rodger McDaniel, Cheyenne, for appellee Colonial Penn Ins. 
Co.

Curtis B. 
Buchhammer and Ward A. White of Guy, Williams, White & Argeris, Cheyenne, for amicus curiae Nationwide Mut. Ins. Co. 
and Nationwide Mut. Fire Ins. Co.

Before THOMAS, C.J., and BROWN, CARDINE, URBIGKIT 
and MACY, JJ.

MACY, 
Justice.

[¶1.]     This is an appeal from 
a district court order reversing and vacating an order of the insurance 
commissioner which found Avemco Insurance Company in violation of § 26-3-127(b), 
W.S. 1977. The only question we are asked to decide is whether the district 
court erred in reversing the order of the insurance 
commissioner.

[¶2.]     We find no error and, 
therefore, affirm.

[¶3.]     Avemco is a direct 
writer of insurance authorized to do business in the State of Wyoming. As a direct 
writer, Avemco sells insurance to citizens of Wyoming directly from its corporate offices located 
outside the state rather than through agents located within Wyoming. Avemco retains 
only one agent within the state who serves solely as a countersigning agent. 
Pursuant to §§ 26-3-127(a) and 26-3-129, W.S. 1977,1 the agent signs and keeps a record 
of all policies issued by Avemco in Wyoming. For these services, Avemco pays the 
agent a commission of one-half of one percent of the premiums paid by Wyoming 
customers.

[¶4.]     On February 19, 1985, 
the insurance commissioner issued a notice and order to show cause to Avemco in 
which it was alleged that Avemco was not paying its countersigning agent in 
accordance with § 26-3-127(b), which provides as follows:

"The insurer shall pay to 
the countersigning agent a commission of not less than five percent (5%) of the 
entire premium, when paid, on the policy or contract, or twenty-five percent 
(25%) of the total commission, when paid, whichever is less. This provision does 
not prohibit payment by the insurer and receipt by the agent of a larger 
commission for services performed or to be performed in relation to the policy 
or contract, if so agreed between the agent and the 
insurer."

[¶5.]     At the hearing before 
the insurance commissioner, Avemco argued that the statutory language provides 
for payment to the countersigning agent in one of two ways. The agent is to be 
paid a commission of five percent of the entire premium on the policy or 25% of 
the total commission paid, whichever is less. Avemco asserted that it pays no 
commissions other than to the countersigning agent, and thus the agent receives 
100% of the commission paid. Because 100% of the commission amounts to less than 
five percent of the entire premium, Avemco contended that it had satisfied the 
statutory requirements.

[¶6.]     The insurance 
department responded by claiming that the "25% of the total commission" language 
was intended to apply only when commissions are paid to an agent within the 
state to produce business. Because Avemco pays no agents within the state to 
produce business but pays an agent only to countersign policies, the insurance 
department contends that the "25% of the total commission" language is 
inoperative, and Avemco must pay the agent "5% of the entire 
premium."

[¶7.]     The insurance 
commissioner found Avemco's payments to be "less than the [statutory] minimum 
fee." Adopting the insurance department's interpretation of § 26-3-127(b), the 
insurance commissioner held that because Avemco pays no commission other than to 
its countersigning agent, it in effect pays no commission within the meaning of 
the statute and must, therefore, calculate its payment on the basis of five 
percent of the entire premium paid.

[¶8.]     Avemco filed a petition 
for review in district court on July 17, 1985. Thereafter, Colonial Penn 
Insurance Company sought and received permission to file a petition for review 
on the ground that it was adversely affected by the insurance commissioner's 
interpretation of § 26-3-127(b).

[¶9.]     In an order filed 
February 25, 1986, the district court found the insurance commissioner's 
interpretation of § 26-3-127(b) erroneous as a matter of law. Given that the 
parties stipulated to the fact that "a commission" is paid to the countersigning 
agent in the amount of one-half of one percent of the premium, the district 
court found the insurance commissioner's conclusion that no commission is paid 
within the statutory meaning unsupportable. Having acknowledged that a 
commission is paid, the court then concluded that pursuant to the statutory 
language, Avemco could pay either five percent of the premium or 25% of the 
commission. Because one-half of one percent is .125% of the premium and is thus 
less than five percent of the total premium, the district court found that 
Avemco's payments to the countersigning agent satisfied the requirements of § 
26-3-127(b).

[¶10.]  On appeal, the insurance department 
contends that the insurance commissioner's order should not have been reversed 
by the district court, because it was supported by substantial evidence, was 
within the scope of his authority, and was not arbitrary, capricious, or an 
abuse of discretion.

[¶11.]  The standards governing review of agency 
decisions are well established. As the insurance department points out, when 
reviewing an agency decision, we give no special deference to the district 
court's determination but instead review the matter as though the appeal were 
directly to this Court. State Board of Control v. Johnson Ranches, Inc., 
Wyo., 605 P.2d 367 (1980); Trout v. Wyoming Oil and Gas Conservation Commission, Wyo., 721 P.2d 1047 
(1986). We examine the entire record to determine if there is substantial 
evidence to support an agency's findings, and if there is, we will not 
substitute our judgment for that of the agency. Trout v. Wyoming Oil and Gas 
Conservation Commission, supra. Substantial evidence is such relevant evidence 
as a reasonable mind might accept as adequate to support a conclusion; it may be 
less than the weight of the evidence but cannot be contrary to the overwhelming 
weight of the evidence. Big Piney Oil & Gas Company v. Wyoming Oil and Gas Conservation Commission, Wyo., 715 P.2d 557 
(1986).

[¶12.]  In the present case, the insurance 
commissioner had before him the following stipulated 
facts:

"1. That AVEMCO Insurance 
Company is a direct writer of aviation insurance and is authorized to sell 
insurance within the State of Wyoming.

"2. AVEMCO sells 
insurance in Wyoming directly from the 
corporate and regional offices and does not have any agents within the State of 
Wyoming, 
except its statutory countersignature agent. 

"3. AVEMCO has retained 
[an agent in] Cheyenne, 
Wyoming, as its countersigning 
agent and pays her a countersigning 
commission of 0.5% of the total annual policy premium.

"4. [The agent] performs 
no services as such for the company except acting solely as a countersigning 
agent. In the event she were to be asked a question by an AVEMCO insured or 
asked to perform services by an AVEMCO insured, she would have to refer the 
inquiry directly to AVEMCO's offices.

"5. A dispute has arisen 
between the Department of Insurance and AVEMCO regarding whether or not AVEMCO 
is complying with § 26-3-127(b) W.S. * *.

"6. AVEMCO is a direct 
writer and as such pays no commissions, except the commissions paid to the 
countersigning agent. * * *

* * * * * 
*

"8. If the Insurance 
Department's interpretation of the statute were to prevail, AVEMCO would have to 
pass on the increased costs of retaining a Wyoming countersigning agent (or 5% of premiums paid under 
its policy) to the Wyoming insureds by increase in its premiums 
of at least 5%. * * *

"9. For the policy year 
beginning September, 1984 AVEMCO had 283 policy holders who paid a total 
premiums of $243,918. Accordingly, the countersigning agent under the present 
compensation provisions receives approximately $1,220 annually. If the 
Department's position were to prevail, the countersigning agent would receive 
approximately $12,200 for signing the same 283 policies." (Emphasis 
added.)

[¶13.]  Despite the clear stipulation of the 
parties that Avemco pays a "commission" to its countersigning agent, the 
insurance commissioner apparently found that Avemco pays no "commission" within 
the meaning of § 26-3-127(b). Despite the clear language of the statute allowing 
payment of either five percent of the premium or 25% of the commission, 
whichever is less, the insurance commissioner held as a matter of law that "when 
no production commission is paid the minimum commission paid to a 
countersignature agent shall be the sum of 5% of the total premium." (Emphasis 
added.) We are unable to find any support in the record for the insurance 
commissioner's holding.

[¶14.]  Where the language of a statute is plain 
and unambiguous and conveys a clear and definite meaning, we do not resort to 
rules of statutory construction. Thomson v. Wyoming In-Stream Flow Committee, Wyo., 651 P.2d 778 
(1982). Neither this Court nor the agency charged with administering the statute 
has a right to look for and impose another meaning.

[¶15.]  In the present case, the language of the 
statute is plain and unambiguous. It provides two mechanisms for payment to a 
countersigning agent - a commission of five percent of the entire premium or 25% 
of the total commission, whichever is less. In addition, the statute provides 
that the insurer is not prohibited from paying a greater commission than that 
provided for by statute. Because this language conveys a clear and definite 
meaning, the insurance commissioner was not entitled to look for and impose a 
different meaning, nor was he entitled to read words into the statute. We agree 
with the district court that the insurance commissioner's finding that the 
minimum payment to the countersigning agent must be five percent of the total 
premium when no production commission is paid goes beyond the stipulated facts 
and the plain meaning of the statute. Section 26-3-127(b) provides quite clearly 
for payment to a countersigning agent on the basis of "the total commission." 
The words "total commission," when given their ordinary meaning, mean the whole 
commission. The statutory language is in no way limited to those circumstances 
in which a commission is paid to an agent for producing business in Wyoming. As the district 
court stated:

"The stipulated facts are 
that a commission is, in fact, paid to the countersigning agent in the amount of 
0.5% of the premium. This is, in fact, a commission. `Commissions' are defined 
by Ballentine's Law Dictionary to be `fees or compensation which are usually 
computed and allowed, for services rendered, on a percentage 
basis.'"

[¶16.]  Section 26-3-127(b) clearly provides for 
payment to a countersigning agent on the basis of either five percent of the 
entire premium or 25% of the total commission, whichever is less. Avemco pays a 
commission to its countersigning agent in the amount of one-half of one percent 
of the premium. Twenty-five percent of this commission (one-half of one percent 
of the premium) is 0.125% and is, therefore, less than five percent of the total 
premium paid.

[¶17.]  For the reasons stated above, we are 
unable to find substantial evidence in the record to support the insurance 
commissioner's findings. We, therefore, affirm the district court's 
order.

FOOTNOTES

1 Section 26-3-127(a) 
provides:

"Except as provided in 
W.S. 26-3-128, no authorized insurer shall make, write, place or cause to be 
made, or place any policy, duplicate policy or contract of insurance of any 
kind, upon persons, property or risks resident or located in this state, except 
through its appointed and licensed agents resident in this state and any one (1) 
of whom shall countersign the policy, duplicate policy or 
contract."

Section 26-3-129 
provides:

"The countersigning agent 
shall keep a record of each policy he countersigns pursuant to W.S. 26-3-127 and 
26-3-128 in the manner provided by W.S. 26-9-137 [§ 
26-9-129]."