ORDERS:
ORDER
I. Statement of the Case
Grover W. White, Jr. (White) sought a contested case hearing due to the denial by the South
Carolina Department of Insurance (Department) of White's application for a license as a State of
South Carolina resident insurance adjuster. Jurisdiction is vested in the Administrative Law Judge
by S.C. Code Ann. § 1-23-600(B) (Supp. 1994) as the result of a denial of a license by a
department of the executive branch in which a single hearing officer is permitted by law to decide
such cases. I find the Department is required to grant the license.
II. Issues
Do sufficient grounds exist to deny White a State of South Carolina resident insurance adjuster's
license?
III. Analysis
1. Positions of Parties:
White does not dispute the fact that he has previously violated the insurance laws, but he does
deny that he lacks good moral character and asserts he should receive an adjuster's license. The
Department asserts White lacks good moral character and that his prior violation of the insurance
laws of South Carolina is sufficient cause to deny the requested license.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. The Department is the state agency for licensing adjusters under the insurance laws.
2. On January 27, 1995, White filed an application with the Department to be licensed as a State
of South Carolina resident insurance adjuster.
3. White's application was denied by the Department on the grounds that White lacks good moral
character and White has previously violated the insurance laws of South Carolina, as
demonstrated by a revocation of an earlier license granted to White.
4. On December 4, 1992, the Department entered an order revoking White's previously granted
non-resident insurance agent's license.
5. The violation is now five years old and the revocation is almost three years old.
6. The current application was filed with the Department more than two years after the
revocation.
7. Due to White's not attending the December 4, 1992 hearing, counsel for the Department
submitted to the Commissioner an "affidavit of default" by White.
8. The Commissioner issued a summary decision in which he found as facts all of the allegations
submitted by counsel for the Department in a letter denoted as "Letter of Allegation."
9. The Commissioner's order found White violated S.C. Code Ann. § 38-43-20 (Supp. 1994) in
that he performed the acts of an insurance agent without first being licensed as an insurance agent.
10. The Commissioner's order found White violated S.C. Code Ann. § 38-43-245 (1989) in that
he submitted, aided, or abetted or conspired with another to present an insurance application to a
carrier transacting business within South Carolina while knowing the application contained false,
fraudulent or misleading information regarding a fact or thing material to the underwriting of the
insurance for which the application was submitted.
11. The Commissioner's order found White willfully deceived or dealt unjustly with the citizens of
this State within the meaning of S.C. Code Ann. § 38-43-130 (1989) since White misstated the
facts in an application for insurance or aided in the misstatement of the facts.
12. The Commissioner's order of December 4, 1992 was not appealed.
13. White has no criminal record.
14. White is dependable in his business dealings, exhibits fairness, exhibits honesty and avoids
deception.
15. White possesses good moral character sufficient to obtain an adjuster's license.
16. White possesses sufficient knowledge of both the insurance business and his duties as an
adjuster to obtain an adjuster's license.
17. White is a fit and proper individual for receiving an adjuster's license.
3. Discussion
The basis for the Department's denial of White's application is that White does not have good
moral character and that he has violated the insurance laws. See S.C. Code Ann. § 38-47-10
(Supp. 1994). I find White has good moral character sufficient to obtain an adjuster's license and
that the prior violations of insurance laws under the facts of this case do not warrant the denial of
an adjuster's license.
a. Good Moral Character
In South Carolina, there is no single criterion by which to determine whether or not one is
possessed of good moral character. 1969 Op. S.C. Att'y. Gen. No. 2709 at 159. Generally, good
moral character means that one should possess all elements essential to make up that character,
such as honesty and veracity . Id.; See also Zemour, Inc. v. State Division of Beverage, 347
So.2d 1102 (Fla. Dist. Ct. App. 1977); Broers v. Montana Dept. of Revenue, 773 P.2d 320
(Mont. 1989).
Except for the prior factual findings of the Commissioner in the December 4, 1992 order, in the
instant case there is no evidence of a lack of good moral character. In the December 4, 1992
order, the Commissioner found White willfully deceived or dealt unjustly with the citizens of this
State, since White misstated the facts in an application for insurance or aided in the misstatement
of the facts.
In short, under the December 4, 1992 order, White was found to have committed an act of
deception. Acts involving deception are acts of moral turpitude. See e.g. Daniel v. Hazel, 242
S.C. 443, 131 S.E. 2d 260 (1963). Moral turpitude is "an act of baseness, evilness, or depravity
in the private and social duties which man owes to his fellow man or society in general, contrary
to the customary and accepted rule of right and duty between man and man." State v. Perry, 294
S.C. 311, 364 S.E.2d 201 (1988). Acts of moral turpitude are antithetical to what is considered
good moral character. 1989 Op. S.C. Att'y. Gen. No. 89-89. Moreover, acts of moral turpitude
imply the absence of good moral character. Id.
Thus, the prior adjudicated facts are evidence that White lacks good moral character. A prior
finding of lack of good moral character, however, is not binding for all future determinations.
White has admitted his mistake and recognized his error in judgment. Further, White did not
attempt to hide the prior violation but fully disclosed the incident on his application and thus
expresses honesty. Through a character witness, White demonstrated he is fair in his dealings
with others, is dependable in his business affairs, and, rather than deceptive, is "straight forward."
While White's and the character witness' testimonies were somewhat conclusory, there was no
persuasive countervailing evidence presented by the Department, other than the order of
December 2, 1992, demonstrating a lack of good moral character. Additionally, White has no
criminal record. Considering the evidence as a whole and having observed the witnesses, I find
that White has good moral character sufficient to hold an adjuster's license.
b. Violation of Insurance Laws
White violated the insurance laws of South Carolina. The December 4, 1992 decision of the
Department is a final unappealed order identifying the specific laws violated. Under § 38-47-10
the applicant must be a person who "has not violated the insurance laws of the state." I find this
language may not be taken literally since to do so leads to absurd results, gives a meaning that is
inconsistent with other related language of the insurance laws, and does not conform with the
existing administrative practice of the Department.
A court will interpret a statute so as to promote legislative intent and to escape absurd results.
SeeKiriakides v. United Artists Communications, Inc., ___ S.C. ___, 440 S.E. 2d 364 (1994).
Further, statutes which deal with the same subject matter are in pari materia and must be
construed together, if possible, to produce a single, harmonious result. See Home Health
Services, Inc. v. DHEC , 298 S.C. 258, 379 S.E. 2d 734 (Ct. App. 1989). The literal application
of the statute would result in denying a license to a party violating the insurance laws without
regard to the nature of the violation (trivial to major), without regard to how distant in time the
violation is, and without regard to the circumstances of the applicant at the time of the
application. Such a literal reading defeats the intent of the statute by creating absurd results.
Further, S.C. Code Ann. § 38-43-130 (Supp. 1994) is in pari materia since it covers the
reissuance of an agent's license (as opposed to an adjuster's license) after a revocation. Under the
statutes governing agents, agents must also not have violated the insurance laws. Yet, under §
38-43-130 an agent who has violated the insurance laws resulting in a revocation may reapply for
a license two years after the revocation. Thus, the General Assembly intended that a subsequent
application for a license was allowable. Finally, where an agency has been designated as the
single state agency for implementation of an area, great deference must be accorded its
interpretations of its laws and regulations. See Hampton Nursing Ctr. v. Health Services, 303
S.C. 143, S.E.2d 434 (Ct. App. 1990). In the instant case, the Department stated that it does in
fact allow reapplications after a revocation. Accordingly, in order to avoid absurd results, to read
the insurance statutes consistently, and to give due consideration to the Department's
administrative practices, I cannot conclude that a violation of the insurance laws results in a
permanent denial of a license.
In the instant case, a pertinent consideration is that the violation is now five years old and the
revocation is almost three years old. Further, the current application was filed more than two
years after the revocation. An agent, who exercises extensive authority under an agent's license,
is required to wait two years before reapplying for an agent's license. § 38-43-130. I find that the
violation of the insurance laws by White is sufficiently removed in time from the current
application so as to prevent the denial of the license by the Department on the grounds of a prior
violation of the insurance laws.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude the following as a matter of
law:
1. An individual who determines the extent of insured losses and assists in settling or attempts to
settle claims is an adjuster. S.C. Code Ann. §38-1-20(3) (Supp. 1994).
2. An adjuster must be licensed by the Department of Insurance. S.C. Code Ann. §38-47-10
(Supp. 1994).
3. To obtain a license as an adjuster, the individual must have good moral character, sufficient
knowledge of both the insurance business and his duties as an adjuster, not have violated the
insurance laws of the state, and be a fit and proper individual for the position. S.C. Code Ann.
§38-47-10.
4. Good moral character means that one should possess all elements essential to make up that
character, such as honesty and veracity. 1969 Op. S.C. Att'y. Gen. No. 2709 at 159; See
alsoZemour, Inc. v. State Division of Beverage, 347 So.2d 1102 (Fla. Dist. Ct. App. 1977);
Broers v. Montana Dept. of Revenue, 773 P.2d 320 (Mont. 1989).
5. A court will interpret a statute so as to promote legislative intent and to escape absurd results.
See Kiriakides v. United Artists Communications, Inc., ___ S.C. ___, 440 S.E.2d 364 (1994).
6. Interpreting § 38-47-10 to mean that any previous violation of the insurance laws is an absolute
ground preventing the subsequent granting of a license leads to absurd results since such an
interpretation disregards the nature of the violation (trivial to major), disregards how distant in
time the violation is, and disregards the circumstances of the applicant at the time of the
application.
7. Statutes which deal with the same subject matter are in pari materia and must be construed
together, if possible, to produce a single, harmonious result. See Home Health Services, Inc. v.
DHEC , 298 S.C. 258, 379 S.E. 2d 734 (Ct. App. 1989).
8. S.C. Code Ann. §§ 38-43-130 and 38-47-10 are in pari materia as they relate to subsequent
applications of a party previously having violated the insurance laws of South Carolina.
9. An agent (as opposed to an adjuster) is required to wait two years before reapplying for an
agent's license. § 38-43-130.
10. Where an agency has been designated as the single state agency for implementation of an area,
great deference must be accorded its interpretations of its laws and regulations. SeeHampton
Nursing Ctr. v. Health Services, 303 S.C. 143, S.E.2d 434 (Ct. App. 1990).
11. A violation of the insurance laws does not result in a permanent denial of an adjuster's license.
12. White is entitled to a State of South Carolina resident insurance adjuster's license.
IV. ORDER
Based upon the foregoing Findings of Fact, Discussion, and Conclusions of Law, the following
ORDER is issued:
The Department is ordered to issue to Grover W. White, Jr. a State of South Carolina resident
insurance adjuster's license.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 31st day of October, 1995 |
