Case Name: Leon VEAL, on his own behalf and as the administrator of the estate of his minor children, Helen Elizabeth Veal, et al., Plaintiff-Appellant-Relator, v. INTERSTATE FIRE AND CASUALTY COMPANY, Defendant-Appellee-Respondent
Court: Louisiana Supreme Court
Jurisdiction: Louisiana
Decision Date: 1975-12-08
Citations: 325 So. 2d 795
Docket Number: No. 56176
Parties: Leon VEAL, on his own behalf and as the administrator of the estate of his minor children, Helen Elizabeth Veal, et al., Plaintiff-Appellant-Relator, v. INTERSTATE FIRE AND CASUALTY COMPANY, Defendant-Appellee-Respondent.
Judges: Summers, J., dissents and will assign reasons.
Reporter: Southern Reporter, Second Series
Volume: 325
Pages: 795–802

Head Matter:
Leon VEAL, on his own behalf and as the administrator of the estate of his minor children, Helen Elizabeth Veal, et al., Plaintiff-Appellant-Relator, v. INTERSTATE FIRE AND CASUALTY COMPANY, Defendant-Appellee-Respondent.
No. 56176.
Supreme Court of Louisiana.
Dec. 8, 1975.
Dissenting Opinion Jan. 27, 1976.
Jerome Friedman, Metairie, for plaintiff-applicant.
A. W. Wambsgans, Richard M. Michal-czyk, Cronvich & Wambsgans, Metairie, for defendant-respondent.

Opinion:
TATE, Justice.
The plaintiff Veal sues to recover damages caused through the negligence of an uninsured motorist. Made defendant is Veal's own automobile liability insurer ("Interstate"). The court of appeal affirmed the trial court's summary judgment dismissing the suit. 308 So.2d 345 (La.App. 4th Cir. 1975).
The issue in this case concerns an interpretation of a statute, La.R.S. 22:1406(D) (1). This requires automobile liability policies issued for delivery in this state to contain uninsured motorist coverage unless the policyholder expressly waives it.
(1)
The particular issue before us is whether this mandatory requirement of law applies to policies issued by "unauthorized" insurers, such as Interstate. It concededly does apply to insurers authorized to transact business in this state subject to this state's rate-making regulation. La.R.S. 22:981-87, 1401-03, 1406.
Interstate is a foreign insurer not so authorized to transact rate-regulated business in this state. The policy issued by it was procured through "surplus-line" brokers, in accordance with Louisiana law, from a foreign insurer not so authorized and regulated. La.R.S. 22:1257-62. As we will note more particularly below, the latter type of policies may not be sold or delivered in Louisiana unless the foreign insurer has made certain filings with the Louisiana commissioner of insurance. La.R.S. 22:1262(B) (1966).
In the instant case, the previous courts found that Interstate's policy issued to Veal was not required to provide uninsured motorist coverage, because issued by an "unauthorized" insurer. As earlier noted, the courts therefore dismissed Veal's suit for recovery under the alleged uninsured-motorist coverage provided as a matter of law (in the absence of express waiver) by all liability policies delivered or issued for delivery in this state. La.R.S. 22:1406(D).
We granted certiorari. 313 So.2d 246 (1975), because we entertained doubt as to the correctness of this holding, taking into consideration also 1970 legislation to be discussed below.
(2)
Since 1962, Louisiana statute has manda-torily provided that, unless the policyholder has expressly rejected the coverage, "no automobile liability insurance" "shall be delivered or issued for delivery" in Louisiana unless it provides uninsured motorist coverage in not less than certain limits. La. R.S. 22:1406(D)(1) (originally enacted by Act 187 of 1962),
We have held that the statute represents the public policy of this state as declared by the legislature, and that it cannot be circumvented by policy provisions which lessen the mandatory minimum coverage against fault of uninsured motorists. Dean v. McGee, 261 La. 686, 260 So.2d 669 (1972); Graham v. American Casualty Company, 261 La. 85, 259 So.2d (1972). See also Barbin v. United States Fidelity and Guaranty Company, 315 So.2d 754 (La.1975).
The present policy was issued in Louisiana by a Louisiana-licensed broker for surplus line insurance. Interstate has never applied for and been authorized to transact business in Louisiana subject to this state's rate-making regulation, although it has made the filings in Louisiana required by this state statute.
Thus, as authorized by Louisiana statute, the present policy was procured through a Louisiana-licensed surplus line broker from a foreign insurer and issued in Louisiana to cover risks of a Louisiana policyholder and a Louisiana-based vehicle. La.R.S. 22:1257. The policy is endorsed (as required by statute, La.R.S. 22:1258) as being registered and delivered as surplus line coverage under the insurance code of Louisiana.
By the policy itself (Condition 25), Interstate has agreed; "Terms of this policy which are in conflict with the statutes of the State wherein this policy is issued are hereby amended to conform to such statutes."
No Louisiana-licensed surplus line broker can lawfully insure with any "unauthorized" insurer (such as the present) unless that insurer has made certain filings with the Louisiana commissioner of insurance. La.R.S. 22:1262B (as enacted by Act 175 of 1966; see also amendment by Act 239 of 1972). The record in this case includes a certificate by the Commissioner of Insurance that Interstate has met these statutory requirements and "is an eligible carrier for placement of surplus line coverage on Louisiana risks."
(3)
Despite the express legislative mandate of La.R.S. 22:1406 (quoted in Footnote 1) that no automobile liability policy shall be issued in Louisiana which does not contain uninsured motorist coverage, the previous courts in this case have held that Interstate's policy was exempt from this statutory requirement. (If not exempt, it is not disputed that Interstate's policy must be reformed as of the date of issuance to include such legislatively-mandated coverage. La.R.S. 22:620, 623, 1258, 1259. Moreover, by the policy in the instant case, the insurer Interstate expressly agreed that provisions of its policy in conflict with any Louisiana statute should be amended to conform to such statute. Webb v. Zurich Insurance Co., 251 La. 558, 205 So.2d 398, 408 (1967).)
In holding Interstate's policy exempt from the requirement (in absence of waiver) of providing uninsured motorist coverage, the previous courts relied upon Barrett v. State Farm Mutual Automobile Insurance Company, 226 So.2d 74 (La.App. 3d Cir. 1969). This 1969 decision affirmed the dismissal of the action as against a surplus line insurer (Midwest) under circumstances similar to the present. The court there relied upon the placement of the requirement within the Louisiana Insurance Code, La.R.S. 22:1 et seq.
By the 1962 amendment, the requirement of uninsured-motorist coverage (La.R.S. 22:1406D) had been placed with Part XXX of the Code, La.R.S. 22:1401-46. This part primarily relates to the rate-making functions of the Louisiana Insurance Rating Commission and its divisions, including the Casualty and Surety Insurance Division.
In effect, Barrett held that, despite the legislative language that Section 1406(D) mandatorily applied to all automobile liability policies issued or delivered in this state, the court could ascribe no legislative intent for the provision to apply to policies issued by surplus line ("unauthorized") insurers because the enactment was found in a division of the code which (except for the section) related wholly to rate-making regulation of "authorized" insurers.
(4)
This was a doubtful interpretation at best, and one (so far as we can ascertain) never reviewed by this court nor followed by any other decision until the instant case. By its terms, the legislative provision did not refer to rate-making functions of the Commission. Its unambiguous language could properly be held to apply to any automobile liability policy issued or delivered in Louisiana, whether by an "authorized" insurer or (as here) by a surplus-line insurer acting through a Louisiana-licensed broker and expressly by its own terms subject to Louisiana law.
Nevertheless, whatever the merits of this 1969 ruling's narrowing of the apparent legislative intent of Section 1406 — based on the ifeew-absence of any reference in Insurance Code Part XXX to surplus-line insurers — , in the very next session of the legislature Section 1406(D) was amended so as to additionally provide: "Each non-admitted company (surplus line underwriter) shall file with the Casualty and Surety Division in accordance with the regulations of the casualty- and surety division a copy of each automobile liability policy written by said company." La.R.S. 22:1406(D) (7) (as added by Act 345 of 1970).
At the least, the 1970 amendment makes doubtful any previous judicial assumption that the legislature did not intend Section 1406 to apply to policies issued by surplus-line insurers. This prior assumption was based solely upon the statutory section's placement within a division of the insurance code which contained no reference to surplus-line insurers and which primarily relates to insurance regulatory agencies with no function with regard to such insurers.
However, by the 1970 amendment, surplus line insurers were subjected to some non-rate-making supervision by, the Louisiana regulatory agency. The amendment erodes the basis for the somewhat tenuous finding of no legislative intent to apply to policies issued by surplus line insurers.
We prefer to rest our holding, however, upon the broad and unambiguous language of Section 1406(D). It expressly provides that all policies issued for delivery in Louisiana must afford uninsured-motorist coverage (unless such is waived). We can find no intent to exempt from this requirement policies issued through Louisiana-licensed brokers for coverage of Louisiana-based automobiles and Louisiana policyholders.
Decree
Accordingly, we reverse the summary judgments of the district court and of the court of appeal which dismissed this claim against the defendant insurer. We remand this case to the district court for further proceedings consistent with the views here expressed. All costs of appellate review are assessed against the defendant insurer.
Reversed and remanded.
Summers, J., dissents and will assign reasons.
. La.R.S. 22 :1406(D) (1) (1962) provided:
"No automobile liability insurance covering liability arising out of the ownership, maintenance, or use of any motor vehicle shall be delivered or issued for delivery in this state with respect to any motor vehicle registered or principally garaged in this state unless coverage is provided therein or supplemental thereto, in not less than the limits described in the Motor Vehicle Safety Responsibility Law of Louisiana, under provisions filed with and approved by the Commissioner of Insurance, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles because of bodily injury, sickness or disease, including death, resulting therefrom; provided, however, that the coverage required under this section shall not be applicable where any insured named in the policy shall reject the coverage."
A series of subsequent enactments has broadened the right of policyholders to this type of mandatory coverage, unless waived by the policyholder: Acts 137 and 550 of 1972; Act 154 of 1974.
As both of the previous courts held, a substantial issue of fact as to the policyholder's alleged waiver of the coverage precludes summary judgment on this factual issue.
. i. e., unless waived by the policyholder, which under the present summary-judgment showing was not done.
. The court concluded : "There are no provisions for the regulation of rates of unauthorized insurers.' Since Midwest is an unauthorized insurer, it is not subject to these rate regulations and is not required to contain uninsured motorist coverage in its automobile liability policies." 226 So.2d 75-76.