Osborne v. Edison, 55959
| Decision Date | 17 October 1973 |
| Docket Number | No. 55959,55959 |
| Citation | 211 N.W.2d 696 |
| Parties | Wayne and Bonnie OSBORNE, Appellants, v. Robert D. EDISON et al., Appellees. |
| Court | Iowa Supreme Court |
Loughlin Law Firm, Cherokee, for appellants.
Bradshaw, Fowler, Proctor & Fairgrave, Des Moines, for appellees.
Considered en banc.
This appeal turns on our interpretation of 'authorized to transact insurance in this state' as the term appeared in section 515B.2(4), The Code, 1971. Chapter 515B provides for the Iowa insurance guaranty association. The trial court held the term referred only to an insurer licensed by the state to do business in Iowa. We affirm.
Although never licensed to do business in Iowa, Trans Plains Casualty Company of Lubbock, Texas (Trans Plains), joined three other fire insurance companies covering the fire risk on real property owned by plaintiffs. Plaintiffs sustained fire damage during the term of the policies and obtained judgment in a separate suit against all four companies. The other three have paid their portion of that judgment. Because it is insolvent and in receivership Trans Plains has not.
This action was thereafter brought against defendants as directors of the Iowa insurance guaranty association under chapter 515B, The Code, 1971. Chapter 515B (originally 63 GA, ch. 1247) was described as 'An Act to avoid financial loss due to the insolvency of an insurer.' Under the chapter member insurers are organized to receive and process claims of loss where the insurer has become insolvent. They are assessed to pay such losses.
Section 515B.2 contained two definitions. 'Member insurers,' those who were organized by the chapter into the association, who furnished the association directors, and who were assessed to pay the losses were defined as individuals, corporations or business associations who (1) write insurance covered by the act and (2) are 'licensed to transact insurance in this state.'
In a separate category 'insolvent insurer' was defined as 'an insurer Authorized to transact insurance in this state, either at the time the policy was issued or when the insured event occurred, which is determined to be insolvent by a court of competent jurisdiction.' (Emphasis added)
The record reveals Trans Plains wrote the policy in question under authority of section 515.147, The Code which authorizes a licensed resident agent of this state to procure insurance from certain unauthorized insurers after making an oath to the commissioner of insurance that the agent has been unable to place said insurance in an authorized insurer and '* * * has either exhausted the capacity of all authorized insurers or has been unable to obtain the desired insurance in insurers licensed to transact business in this state. * * *.' The section further provides: '* * * A sworn report of all business transacted by agents of this state in such unauthorized insurers shall be made to the commissioner of insurance on or before March 1st of each year for the preceding calendar year, * * * such report shall be accompanied by a remittance to cover the taxes thereon. * * *.'
The controlling question is whether an insurance transaction authorized under section 515.147 by an unlicensed insurer renders the insurer 'authorized to transact insurance' in Iowa within the meaning of section 515B.2(4), The Code, 1971.
Our determination is not affected by a subsequent amendment (64 GA, ch. 1113, § 2). Under the amendment an insurer must be licensed to fall within the definition. Prior to the amendment it was a much closer question. But we think the trial court was...
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