Court Opinion

ID: 9454037
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:33:36.875191+00
Date Added: 2024-06-11T17:33:56.351298
License: Public Domain

COMBS, Circuit Judge
(dissenting).
I respectfully dissent. The question is whether an insurance company which writes an automobile liability policy under the Tennessee Assigned Risk Plan does so subject to the Tennessee agency statute which provides that the person who handles the application for the policy shall be considered as the agent of the insuring company. T.C.A. § 56-705. The District Judge held that it does and I think he is right.
The Tennessee courts have not decided this question and apparently there is no direct authority in the decisions of other states. The statute could not be more specific. It reads:
“Any person who shall solicit an application for insurance shall in all matters relating to such application and the policy issued in consequence thereof be regarded as an agent of the company issuing the policy, and not the agent of the insured, and all provisions in the application and in the policy to the contrary are void and of no effect whatever; but this section shall not apply to licensed fire insurance brokers.”
This statute was enacted in 1907 and has been upheld many times by the Tennessee courts. Moreover, it has uniformly been given a liberal interpretation. T. H. Hayes & Sons v. Stuyvesant Ins. Co., 194 Tenn. 35, 250 S.W.2d 7 (1952); Industrial Life & Health Insurance Co. v. Trinkle, 30 Tenn.App. 243, 204 S.W.2d 827 (1947).
I think that the insurance company, by availing itself of the opportunity to write insurance in Tennessee, has by operation *381of law agreed to be bound by the applicable Tennessee statutes.
An insurance company has no inherent right to do business within a state. This is a privilege bestowed by the state and the privilege may be conditioned upon the company’s compliance with reasonable requirements fixed by the state. 29 Am. Jur., Insurance §§ 74, 76, 78, p. 493, et seq. The refusal of a company to participate in the Assigned Risk Plan would no doubt be grounds for revocation of the privilege. California State Auto. Assn. Inter-Insurance Bureau v. Maloney, 341 U.S. 105, 71 S.Ct. 601, 95 L.Ed. 788 (1951).
The Tennessee Assigned Risk Law, Chapter 107, Public Acts of 1949, requires all insurance companies licensed to write automobile insurance in Tennessee to participate in the plan. The law was enacted for the benefit of the public in order to keep uninsured drivers off the highways. Tharp v. Security Insurance Company of New Haven, Ky., 405 S.W. 2d 760 (1966). It accomplishes a salutary purpose and should not be given a restrictive interpretation. Companies writing insurance in Tennessee are required by the Act to accept as policy holders under a quota system a minimum number of persons considered to be poor risks. I find no reason to infer a legislative intent that those companies which participated in the plan should be relieved of conditions imposed by other Tennessee statutes.
As I understand the majority opinion, it holds that the agency statute — T.C.A. § 56-705 — does not apply here because the policy was not written by the company voluntarily. My difference with the majority is that I think the company, by agreeing to participate in the plan as a condition to doing business in the state, did in legal effect agree voluntarily to write this assigned risk policy.
I would affirm the judgment.