Court Opinion

ID: 9564049
Source: CourtListenerOpinion
Date Created: 2023-08-21 18:53:40.811833+00
Date Added: 2024-06-11T09:18:12.076717
License: Public Domain

Cureton, Judge
(concurring):
I concur in the result reached by the majority but would base the decision, as did the administrative hearing officer, solely on the fact that at the time he sought to revoke Mungo’s producer’s license, the Insurance Commissioner had developed no objective criteria for revoking such licenses and thus, his actions were arbitrary.
The majority concludes that Section 38-37-150, 1976 Code of Laws of South Carolina, provides two separate bases for designating producers for the Reinsurance Facility: (1) market need, and (2) the Legislature’s desire to accommodate agents who have lost their agency contracts because of the South Carolina Automobile Reparation Reform Act of 1974. I do not glean the latter purpose from the Act.
Even if I were to agree with the majority that the Act provides for the designation of Mungo as a producer just because he lost agency contracts, nevertheless the pertinent inquiry remains whether Mungo was, in fact, designated solely because he lost agency contracts. It seems to me that there is substantial evidence that Mungo’s appointment as a producer in the Irmo area was based on market need. In an August 1975 letter to producers, the Chief Insurance Commissioner for South Carolina outlined his policy regarding appointments by stating that the purpose of the 1974 Act was to make insurance available to citizens of South Carolina, not to keep “insurance agents in the automobile insurance business.” The letter continued:
*573Failure to maintain high standards in the conduct of your business, especially the market served by you, [emphasis added] is not in the public interest....
Attached to the letter were several rules governing the handling of insurance by designated producers. Included in the rules is the provision that after August 1,1975, designations would only be made based upon need for an automobile insurance agent in the particular area where the applicant proposed to operate. Mungo’s 1977 application for appointment as a producer certified that he had read the August 1975 letter and rules. The same Commissioner who designated Mungo as producer in 1977, also wrote the August 1975 letter and promulgated the rules. With such policy in existence in 1977, I find it difficult to conceive of the idea that the Commissioner designated Mungo a producer on any basis other than market need.
The majority notes that the Commissioner’s letter of August 8,1975, and rules regarding appointment of designated producers after August 1, 1975, should not apply to Mungo because he was already a producer on August 8, 1975. We gather nothing from the record that would indicate this to be the case. A review of the August 1975 letter, which the majority states was sent to Mungo as a producer, contains no addressee nor does it indicate in any way that it was sent to Mungo in 1975.
Nevertheless, I agree with the majority that the Commissioner’s revocation of Mungo’s license was arbitrary, and therefore cannot be sustained. While the Legislature may provide for revocation of an insurance agent’s authority to operate, the Commissioner cannot arbitrarily assume the power to revoke such agent’s authority without having established reasonable grounds for revocation beforehand. 44 C. J.S. Insurance Section 85 (1945).
I agree with the majority that the Commissioner had implied authority to revoke Mungo’s designation as a producer. However, as pointed out by the hearing officer, at the time of Mungo’s license revocation, the Commissioner had no objective criteria for revoking licenses of producers. Without such criteria his actions in this case were arbitrary. We observe that there is no evidence that the Commissioner *574had established any clearly defined service or market areas in Columbia, without which Mungo had no way of knowing what constituted his service area. Taken to its logical conclusion, if Mungo’s authority to operate as a producer were limited to a specific location, moving his office next door would constitute a violation of the terms of his license.