Opinion ID: 1036249
Heading Depth: 2
Heading Rank: 3

Heading: Ill The Insurance Code and Regulations

Text: Whatever the principal and agent believe, by definition, an insurance agent in Washington has authority to solicit. The insurance code comprehensively governs the relationship between agent and insurer, specifically enumerating the duties and powers an agent possesses. Day v. St. Paul Fire & Marine Ins. Co., 111 Wash. 49, 52, 189 P. 95 (1920). Solicitation is one such power: former RCW 48.17.010. 7 defines an agent as any person appointed by an insurer to solicit applications for insurance on its behalf. Under the plain language of the statute, a duly appointed agent is necessarily authorized to solicit insurance for its appointing insurerwhatever other activities the agent may conduct on the side. CTIC concedes that Land Title is an agent but characterizes it as a limited agent with no authority to market for CTIC. Suppl. Br. of Resp't at 1. But the authority to solicit necessarily includes the authority to market. The meaning of solicitation includes inviting, requesting, urging, or advising a person to subscribe to insurance, endeavoring to obtain such a subscription, or approaching a person for the purpose of receiving an application for insurance coverage. Nat'/ Fed'n of 7 The statute governing the proceedings at issue here has since been amended to define a title insurance agent as an entity appointed by a title insurance company to sell, solicit, or negotiate insurance on behalf of the title insurance company. RCW 48.17.01 0(16). 12 No. 87215-5 Retired Persons v. Ins. Comm'r, 120 Wn.2d 101, 110-11, 838 P.2d 680 (1992) (NFRP) (citing Paulson v. W Life Ins. Co., 292 Or. 38, 62, 636 P.2d 935 (1981 )). We define solicitation broadly, and we do not require that the person approached be an end consumer, nor that the solicitor seek applications for its own insurance. When Land Title approaches a middleman for the purpose of receiving an application (from that middleman's customers) for a CTIC insurance policy, Land Title is soliciting for CTIC. In other words, Land Title is doing what CTIC appointed it to do pursuant to statute. When Land Title solicits in an unlawful way, CTIC is responsible. CTIC argues that the Agreement controls over the statute and withdraws Land Title's authority to engage in solicitation. See AR at 519, at 1f 3 (Issuing Agent shall not be deemed or construed to be authorized to do any other act for principal not expressly authorized herein.); AR at 520, 1f 6(G) (Issuing Agent shall not, without prior written consent of Principal ... Use the name of the Principal in any advertising or printing other than to indicate the Issuing Agent is a policy issuing agent of the Principal.). This argument overlooks the fact that solicitation is inherently part of Land Title's authority to sell title insurance. In any event, CTIC's argument founders on our decision in Pagni, where we held that an insurance company is bound by all acts, contracts, or representations of its agent, whether general or special, which are within the scope of his real or apparent authority, notwithstanding they are in violation of private instructions or limitations upon his authority, of which the person dealing with him, acting in good faith, has neither actual nor constructive knowledge. Pagni v. N.Y. Life Ins. Co., 173 Wash. 322, 349-50, 23 P.2d 6 (1933) (emphasis added) (quoting 32 C.J. § 140, at 1063). That is to say, where an agent acts within 13 No. 87215-5 its authority, the principal cannot excuse itself from vicarious liability through an undisclosed private arrangement that purports to restrict that authority. Here, the statute provides the authority, and the Agreement was an undisclosed private contract between CTIC and Land Title. The Pagni rule is further supported by the Ninth Circuit Court of Appeal's interpretation of a comparable Oregon statute. In NFRP, we looked to the Oregon Supreme Court's interpretation of the term solicit in Oregon Revised Statutes 744.165 to aid us in interpreting the same term in our own insurance code. In turn, federal courts have interpreted the same Oregon statute to indicate a legislative intent to make acts or statements of one who solicits or procures an application of insurance from the insured, binding on the company whose coverage is being sold, regardless of 'waivers' to the contrary by either the insurer or the intermediary. Lien Ho Hsing Steel Enter. Co. v. Weihtag, 738 F.2d 1455, 1459 (9th Cir. 1984 ). Here, too, the purpose of the statute would be defeated if an insurer could gain the benefits of appointing an agent (here, the ability to sell insurance in a locale where it lacks a title plant) while waiving any attendant liability through contract. As we recognized in Day, the insurance code creates a statutory standard of agency that agents and their principals cannot opt out of at their own discretion.