Mor-Ben Insurance Markets Corp. v. Department of Insurance

[1225]

Opinion

KREMER, P. J.

Petitioners Mor-Ben Insurance Markets Corporation and Morton Hoffman appeal a judgment denying their petition for writ of mandate against the State of California Department of Insurance (Department).

The Department revoked petitioners’ licenses to engage in the insurance business and denied their applications for additional licenses. The Department found petitioners violated the Insurance Code

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by knowingly making false representations in processing a claim and by acting as agent for and aiding and abetting a Pakistani insurance company to transact insurance in California without obtaining a certificate of authority. The superior court upheld the Department’s decision. We affirm.

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In March 1976 the Department licensed Mor-Ben as an “insurance broker,” “surplus line broker” and “special lines’ surplus line broker.” Hoffman was licensed as a “transactor” under Mor-Ben’s licenses.

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In October 1979 Mor-Ben executed a management agreement with Pioneer Insurance Company, a Pakistani company not licensed by the Department to transact insurance business as an insurer in California. Under the management agreement, Pioneer appointed Mor-Ben its sole manager for transacting Pioneer’s insurance business in the United States. Pioneer granted Mor-Ben exclusive management of Pioneer’s underwriting, including accepting or rejecting individual risks, and authority to settle claims against Pioneer, collect premiums, appoint surplus line brokers or other representatives necessary to conduct Pioneer’s business, supply all policies, certificates, forms and endorsements, set premium rates and deductibles, open bank accounts in Pioneer’s name, invest its funds, and engage in the reinsurance business as a reinsurer on Pioneer’s behalf. Pioneer allowed Mor-Ben a profit commission.

. Mor-Ben primarily functioned as United States manager for Pioneer and for any type of business Pioneer wanted to do in the United States. MorBen did all accounting, handled all funds, transmitted and requested funds, assigned all claims, hired all adjusters, retained all attorneys and settled claims. On Pioneer’s behalf, Mor-Ben had surplus line brokers under contract throughout the United States. Mor-Ben was Pioneer’s sole agent in the