ORDERS:
ORDER
I. Statement of the Case
David E. Rochester (Rochester) sought a contested case hearing due to the denial by the South
Carolina Department of Insurance (Department) of Rochester's application for a license as a State
of South Carolina resident insurance agent. Jurisdiction is vested in the Administrative Law
Judge Division by S.C. Code Ann. § 1-23-600(B) (Supp. 1995) 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 deny the license.
II. Issues
Do sufficient grounds exist to deny Rochester a State of South Carolina resident insurance agent's
license?
III. Analysis
1. Positions of Parties:
Rochester does not dispute the fact that he has previously violated the insurance laws, but he
asserts he is trustworthy and should receive an agent's license. The Department asserts Rochester
is not trustworthy and that his prior violation of the insurance laws of South Carolina is sufficient
cause to deny the requested license, especially where there is no evidence of rehabilitation.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. The Department is the state agency responsible for licensing agents under the insurance laws.
2. In April of 1995, Rochester filed an application with the Department to be licensed as a State
of South Carolina resident insurance agent.
3. Rochester's application was denied by the Department on the grounds that Rochester's prior
violation of the insurance laws demonstrates he is not trustworthy, and Rochester has not shown
sufficient rehabilitation.
4. On January 26, 1993, the Department entered an order revoking Rochester's previously granted
resident insurance agent's license.
5. The current application was filed with the Department more than two years after the
revocation.
6. The Commissioner issued a consent order signed and agreed to by Rochester which found
Rochester collected a Medicare supplement insurance premium from a South Carolina citizen but
did not immediately forward the premium to the appropriate insurer.
7. Rochester received an annual premium from a client but retained a portion of the premium by
remitting to the insurer a premium sufficient to cover a semi-annual payment.
8. During 1995, Rochester worked and acted as an insurance agent for Atlantic Coast Life
Insurance.
9. Rochester was not licensed as an agent by the Department during 1995.
10. There is no evidence that Rochester has a criminal record.
11. Rochester does not meet the requirements for an agent's license.
3. Discussion
The applicant has the burden of demonstrating he has met the required conditions before the
benefit sought can be granted. 73A C.J.S. Public Administrative Law and Procedure § 128
(1983). In seeking an agent's license, an applicant must prove that he is trustworthy since the
Department, as a part of its duties in granting a license, must examine this characteristic. S.C.
Code Regs. 69-23(g) (1976). A party who retains or fails to promptly transmit or pay all or a
portion of an insurance premium commits an act that is deceitful and thus demonstrates a lack of
trust. S.C. Code Ann. § 38-43-130 (Supp. 1995).
The Department's denial of Rochester's application stems from a lack of trustworthiness
demonstrated by Rochester's retention and failure to promptly transmit or pay all or a portion of
an insurance premium. In addition, the testimony demonstrated Rochester, as recently as 1995,
worked as an insurance agent while his license was revoked and while no new license, either
temporary or permanent, had been issued. Here, there is affirmative evidence showing a lack of
trustworthiness, while correspondingly Rochester has not presented credible evidence
demonstrating the presence of trustworthiness. In short, Rochester has not met his burden of
proof. While no license can be issued at this time, the Department is free to act upon any future
applications filed by Rochester with the Department's determination to be based upon the
evidence submitted at the time of such subsequent applications.
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 performs the acts listed in S.C. Code Ann. § 38-43-10 (Supp. 1995) and
who represents an insurance company is an insurance agent. S.C. Code Ann. §38-1-20(20)
(Supp. 1995).
2. An agent must be licensed by the Department of Insurance. S.C. Code Ann. §38-43-20 (Supp.
1995).
3. An applicant has the burden of demonstrating he has met the required conditions before the
benefit sought can be granted. 73A C.J.S. Public Administrative Law and Procedure § 128
(1983).
4. To obtain a license as an agent, an individual must be trustworthy. S.C. Code Regs. 69-23(g).
5. A party who retains or fails to promptly transmit or pay all or a portion of an insurance
premium commits an act that is deceitful and thus demonstrates a lack of trust. S.C. Code Ann. §
38-43-130 (Supp. 1995).
6. Rochester is not entitled to a State of South Carolina resident insurance agent'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 deny to David E. Rochester, a State of South Carolina resident
insurance agent's license.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 12th day of February, 1996 |
