Opinion ID: 829413
Heading Depth: 2
Heading Rank: 1

Heading: insurance code licensure provisions in 2004

Text: Before 2002, the Insurance Code’s licensure provisions had required applicants to have “good moral character.” See former MCL 500.1204(4), as amended by 1986 PA 173. It remains the law today that no licensing agency may make a finding as to an applicant’s moral character on the sole basis of a criminal conviction. MCL 338.42. It also remains the law that “[o]rders, decisions, findings, rulings, determinations, opinions, actions, and inactions of the commissioner in [the Insurance Code] shall be made or reached in the reasonable exercise of discretion.” MCL 500.205. The “good moral character” requirement in the Insurance Code’s licensure provisions was replaced by 2001 PA 228. When plaintiff applied for his license, MCL 500.1205(1)(b) provided that an application “shall not be approved” if the applicant had “committed any act that is a ground for denial, suspension, or revocation under [MCL 500.1239].” While this seems mandatory when read in isolation, MCL 500.1239(1) provided that “the commissioner may place on probation, suspend, revoke, or refuse to issue” a license for a list of possible reasons, including an applicant’s “having been convicted of a felony.” MCL 500.1239(1)(f) (emphasis added). Consistent with MCL 4 500.205, the licensure requirement mandates that the commissioner make a discretionary judgment call when reviewing an application and deny the application if he or she concludes—in the exercise of that discretion—that denial, suspension, or revocation would be appropriate. In other words, 2001 PA 228 replaced the ambiguous judgment call of “good moral character” with a more rigorously defined judgment call that entailed consideration of enumerated scenarios under which adverse action may be found appropriate. When the applicable versions of MCL 500.1205, MCL 500.1239, and MCL 500.205 are read together, they set forth a licensure procedure that requires the commissioner to exercise judgment within a framework, rather than exercising judgment in a more nebulous environment. We reject defendants’ contention that the Insurance Code in effect in 2004 required the commissioner to deny plaintiff’s application. The Insurance Code did not, and the commissioner’s exercise of discretion in granting plaintiff a license was therefore permissible. We recognize that shortly before plaintiff applied for his license, the commissioner rendered a decision5 concluding that 2001 PA 228 removed the discretion to permit felons to receive licenses. An agency’s interpretation of a statute is entitled to deference, but generally only if that interpretation has been relied on for a long time, and in any event no such interpretation may overcome the plain meaning of the statute itself. Ludington Serv Corp v Acting Ins Comm’r, 444 Mich 481, 505 & n 35; 511 NW2d 661 (1994). Defendants acknowledge that this unpublished decision has not been extensively 5 Mazur v Office of Fin & Ins Servs, issued May 14, 2004 (Docket No. 2003-1515). 5 relied on or applied consistently, and our review of the record indicates that the opinion was not even widely circulated internally. Furthermore, it was clearly not relied on when the commissioner considered plaintiff’s application and granted his license. Finally, the decision was incorrect. Therefore, we answer the first question, whether in 2004 the commissioner had been required by statute to deny plaintiff’s application, in the negative. B. INSURANCE CODE LICENSURE PROVISIONS IN 2008 AND TODAY Subsequently, 2008 PA 422 and 2008 PA 423 amended MCL 500.1205 and MCL 500.1239. MCL 500.1205 now provides in relevant part that “[a]n application for a resident insurer [sic] producer license shall not be approved unless the commissioner finds that the individual . . . [h]as not committed any act listed in [MCL 500.1239(1)].” And MCL 500.1239(1)(f) provides that “the commissioner shall refuse to issue a license” for “[h]aving been convicted of a felony.” These two statues are now consistent, and were a convicted felon to apply for an insurance producer license today, the commissioner would be required to deny it. Indeed, plaintiff concedes as much. But no language in these statutes rebuts the general rule of construction that changes to a statute should only apply prospectively. Even if we were to engage in a speculation that the amendment was intended to clarify the Legislature’s prior intent, amendments may not be applied retrospectively if doing so would impair a vested right. Brewer v A D Transp Express, Inc, 486 Mich 50, 56-57; 782 NW2d 475 (2010). The fact that an applicant like plaintiff would necessarily be denied a license 6 today does not automatically invalidate defendant’s decision to exercise its discretion to grant him a license in 2004. Although the current statutes require denial of a license, they do not require an existing license to be revoked. The first clause of MCL 500.1239(1) states in full: “In addition to any other powers under this act, the commissioner may place on probation, suspend, or revoke an insurance producer’s license or may levy a civil fine under [MCL 500.1244] or any combination of actions, and the commissioner shall refuse to issue a license under [MCL 500.1205 or 500.1206a], for any 1 or more of the following causes[.]” Denial is mandatory if any of a number of enumerated conditions is satisfied; however, revocation is still as discretionary as it was in 2004. Therefore, we answer the second question, whether defendant is currently required by statute to revoke plaintiff’s license, in the negative.