Court Opinion

ID: 9649904
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:13:12.295702+00
Date Added: 2024-06-11T18:12:15.841700
License: Public Domain

*313ZAPPALA, Justice,
concurring.
I concur with the result reached by the majority but am compelled to enunciate my separate reasons.
Edgar Miller’s action is founded on § 1171.5(9) of the Unfair Insurance Practices Act (UIPA). Under § 1171.4 of UIPA, a person is prohibited from engaging in “any trade practice which is defined or determined to be an unfair method of competition or an unfair or deceptive act or practice in the business of insurance____” Section 1171.5 then defines “unfair methods of competition” and “unfair or deceptive acts or practices”. Subsection (9) of § 1171.5 then provides one act that constitutes an unfair practice:
(9) Cancelling any policy of insurance covering owner-occupied private residential properties or personal property of individual that has been in force for sixty days or more or refusing to renew any such policy unless the policy was obtained through material misrepresentation, fraudulent statements, omissions or concealment of fact material to the acceptance of the risk or to the hazard assumed by the company; ... No cancellation or refusal to renew by any person shall be effective unless a written notice of the cancellation or refusal to renew is received by the insured either at the address shown in the policy or at a forwarding address. Such notice shall:
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(ii) State the date, not less than thirty days after the date of delivery or mailing on which such cancellation or refusal to renew shall become effective.
Under subsection (9), an unfair practice occurs if an insurance carrier cancels a homeowner’s insurance policy in effect sixty days or longer without the proper notification. An exception to this provision is the procurement of that policy through fraud or misrepresentation. Thus, if a policy is obtained through fraud, the cancellation provisions of UIPA are not applicable and failure to adhere to § 1171.5(9) is not considered an unfair practice.
*314Without the benefit of § 1171.5(9), Miller is not entitled to thirty days notice prior to cancellation and the insurance carrier would be entitled to avail itself of remedies it reserved in its policy. In this appeal, the Appellant specifically reserved the right to void the insurance contract if procured through the use of fraud or misrepresentation. Exercising this right, the Appellant ¡voided Miller’s contract retroactive to the date the policy was issued. Since I see no basis for prohibiting the Appellant from exercising rights reserved under its contract and not contrary to UIPA, I concur in the majority’s reversal of the Commonwealth Court Order affirming the actions of the insurance commissioner.
However, notwithstanding my concurrence with the actions of the majority, I still adhere to the views expressed by Justice McDermott in Metropolitan Property and Liability Insurance Company v. Insurance Commissioner (“Bonnie Beck ”), 517 Pa. 218, 535 A.2d 588 (1987) (plurality opinion). In Bonnie Beck, we were asked to review Act 78 and determine whether the General Assembly had effectively abrogated the right of rescission with respect to automobile insurance. Unlike UIPA, Act 78 was amended to read as follows:
No insurer shall cancel a policy except for one or more of the following specified reasons:
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(3) a determination that the insured has concealed a material fact, or has made a material allegation contrary to fact, or has made a misrepresentation of material fact and that such concealment, allegation or misrepresentation was material to the acceptance of the risk by the insurer.
40 P.S. § 1008.4. Thus, the General Assembly made it clear in Act 78 that even if an insurance carrier could establish a material misrepresentation in the procurement of that insurance, the exclusive remedy was cancellation of the automobile insurance policy. Prior to this amendment, material misrepresentation was not included in Act 78 as a basis for *315termination of the policy. With this amendment, the Legislature clearly preempted and limited the available remedies to an automobile insurance carrier. It also appears that the amendment was in direct response to the judiciary’s refusal to restrict an automobile insurance carrier’s remedies without a clear legislative intent. See Safeguard Mutual Insurance Company v. Huggins, 241 Pa.Super. 382, 361 A.2d 711 (1976).
Unfortunately for Mr. Miller, the Legislature has not denied an insurance! carrier its common law right of rescission under UIPA as it has done under Act 78. Until such time as the Legislature acts, I am constrained to adhere to the clear mandate of § 1171.5(9) and permit the insurance carrier to exercise its common law right of rescission if preserved in the contract.
LARSEN and McDERMOTT, JJ., join in this Concurring Opinion.