More on why it's good to comparison shop for insurance

This article also demonstrates how the rich are different from us.

Shopping for coverage can pay off

Although the couple that writes this blog, Sustainable Personal Finance, is Canadian, their point in this post on insurance agents is well-taken here as well: it never hurts to shop around.

As with all things in life, however, the cheapest coverage is not necessarily what you need. What is included in the coverage? What is excluded? What is the reputation of the insurer with respect to paying or fighting fair claims? What is the deductible? Does the property coverage provide replacement cost or present value? Do attorney's fees reduce the coverage limits? Is the insurer in danger of going out of business?

Massachusetts Appeals Court holds that only fine under Mass. Gen. Laws ch. 175 s. 177 applies where insurance agency employed unlicensed broker

I have been discussing Anawan Ins. Agency, Inc. v. Division of Ins., 76 Mass. App. Ct. 447 (2010), in which an insurance agency was accused of employing an unlicensed broker.

In paying the unlicensed broker, the insurance agency had violated both Mass. Gen. Laws ch. 175 § 177, the statute prohibiting payment to unlicensed brokers, and Mass. Gen. Laws ch. 176D, § 2, which prohibits unfair or deceptive acts or practices in the business of insurance.

Violation of Mass. Gen. Laws ch. 175 § 177 was punishable by a fine (prior to the inapplicable amendment to the statute) of "not less than twenty nor more than two hundred dollars."

Pursuant to § 7 of ch. 176D, violation of ch. 176D is punishable by a fine of "not more than one thousand dollars for each and every act or practice."

The court held that only the fine under § 177 could be assessed, because § 7 of ch. 176D is a statute of general application to all unfair practices in the insurance industry, but § 177 of ch. 175 applies specifically to transactions with unlicensed brokers. As a matter of statutory interpretation, the more specific statute must govern.

Massachusetts Appeals Court holds that amendment to Mass. Gen. Laws ch. 175 s. 177 does not apply retroactively

I have been discussing Anawan Ins. Agency v. Division of Ins., 76 Mass. App. Ct. 447 (2010), in which an insurance agency was accused of employing an unlicensed broker.

The applicable statute, Mass. Gen. Laws ch. 175, § 177, which prohibits payments to unlicensed brokers, was amended in 2002 by inserting the word "knowingly" in the sentence, "Whoever knowingly violates a provision of this section shall be punished by a fine of not less than $50 nor more than $500."

The court noted that an amendment to a statute applies retroactively where the amendment is a clarification or a fine-tuning of the earlier provision. It held that the word "knowingly" was not a clarification or fine-tuning and would not apply retroactively.

Massachusetts Appeals Court holds that discovery rule does not apply to allegation that insurance agency employed unlicensed broker

In my last post I discussed Anawan Ins. Agency, Inc. v. Division of Ins., 76 Mass. App. Ct. 447 (2010), in which an insurance agency was accused of employing an unlicensed broker.

After determining that a four year statute of limitations applied, the court held that the discovery rule does not apply. The discovery rule tolls the statute of limitations until a plaintiff knew or should have known that he or she may have a cause of action. For example, in a medical malpractice claim, under the discovery rule in certain circumstances the statute of limitations may be tolled until the plaintiff develops symptoms putting him or her on notice of the malpractice.

In Anawan, in 1999 the division of insurance received anonymous letters stating that Anawan had illegally opened a second location. The division investigated and learned that Prum was doing business at the second location under an expired broker's license. On June 23, 2004, Anawan's director confirmed in writing that it had paid commissions to Prum.

The Massachusetts Appeals Court held that the discovery rule did not apply to punitive civil statutes including the one prohibiting an insurance agency from employing an unlicensed broker. In support of its determination the court quoted 3M Corp. v. Browner, 17 F.3d 1453, 1455 (D. C. Cir. 1994), which stated:

In an action for a civil penalty, the government's burden is to prove the violation; injuries or damages resulting from the violation are not part of the cause of action; the suit may be maintained regardless of damages.

Massachusetts Appeals Court holds that four year statute of limitations applies to allegation that insurance agency employed unlicensed agent

In Anawan Ins. Agency, Inc. v. Division of Insurance, 76 Mass. App. Ct. 447 (2010), the Division of Insurance alleged that Anawan Insurance Agency paid compensation to Kuntthy Prum at a time that Prum was not licensed as an insurance agent.

The first issue addressed by the Massachusetts Appeals Court was which statute of limitations applied. Mass. Gen. Laws 260 § 5 states that the statute of limitations on actions for penalties or forfeitures is either one or two years. By its terms, that statute does not apply if § 5A applies.

Mass. Gen. Laws 260 § 5A states that the statute of limitations for actions arising on account of violations of "any law intended for the protection of consumers" is four years.

The court held that Mass. Gen. Laws ch. 175 § 177, which prohibits payments to unlicensed brokers, is a statute intended to protect consumers, and that therefore the four year statute of limitations applies.