Plaintiff, L.S.S. Realty Corporation, seeks to enjoin an insurer, defendant Liberty Mutual Insurance Company, from refusing to renew a property insurance policy. Because plaintiff’s petition centers on an alleged noncompliance with the insurance laws of the Commonwealth, which are overseen by the Commonwealth’s Insurance Department, jurisdiction lies administratively. Therefore, plaintiff’s petition for an injunction is dismissed.
At the outset, the question arises whether the court of common pleas has jurisdiction over claims relating to the non-renewal of commercial insurance policies. Although the higher courts have addressed the issue of exclusive jurisdiction of the insurance commissioner in cases involving claims by private individuals under the Unfair Insurance Practices Act (UIPA), 40 Pa.C.S. §1171.1 et seq. (Purdon’s Supp. 2001), the question as to the viability of causes of action resting on violations of the “[njotice requirements of property and casualty insurers,” 40 Pa.C.S. §3401 et seq., has not been specifically addressed, and thus presents a case of first impression.
The Pennsylvania Legislature has empowered the insurance commissioner with discretionary authority to issue regulations, pursue complaints, and to enforce the
In the context of construing claims brought under the guise of the UIPA, the courts of the Commonwealth have been forced to confront whether the jurisdiction of the commissioner is exclusive or, alternatively, whether an insured may bring a private suit in the courts against insurers.
As it has been explicated by the Superior Court, however, the D ’Ambrosio opinion left intact an insured’s right to bring a common-law cause of action, e.g., fraud or deceit, or a cause of action under a separate statutory provision specifically conferring such a right, e.g., the Unfair Trade Practices and Consumer Protection Law. Hardy v. Pennock Insurance Agency Inc., 365 Pa. Super. 206, 214, 529 A.2d 471, 478-79 (1987). Distinguishing cases resting upon independent claims, as opposed to those wherein only noncompliance with the Act itself was alleged, the Superior Court reasoned that the argument for exclusive jurisdiction of the commissioner in such cases loses its force. Id.
The Hardy court relied heavily on the rationale of Pekular v. Eich, 355 Pa. Super. 276, 513 A.2d 427 (1986); Hardy, supra at 215, 529 A.2d at 478-79. And in deciding whether common-law causes of action survived the passage of the UIPA, the Pekular court looked to the Statutory Construction Act of 1972, 1 Pa.C.S. §1929, which states that “[t]he provision in any statute for a penalty ... for its violation shall not be construed to deprive an injured person of the right to recover... damages sustained by reason of the violation.” Pekular, supra at 282, 513 A.2d at 430. In the UIPA context, the court read this as allowing for the “continued viability
The critical inquiry, then, in determining whether a plaintiff may circumvent the administrative process and seek immediate redress in the courts, looks to the nature of the claim alleged. If an insured is pursuing a common-law cause of action, such as fraud or deceit, against an insurer, the claim will lie in the court of common pleas. Hardy, 365 Pa. Super, at 215, 529 A.2d at 478-79. Likewise, if an insured states a cause of action that is conferred by a statute other than one which empowers the insurance commissioner to investigate, a private suit in the courts is properly filed. Id. If, however, the claim seeks to enforce compliance with regulations or statutes specifically relating to insurance, then sole jurisdiction lies with the insurance commissioner. D’Ambrosio, 494 Pa. at 508, 431 A.2d at 970. In the last scenario, an aggrieved insured must follow the normal complaint procedure, as promulgated in the Administrative Code. 1 Pa. Code §35.9 et seq. See e.g., J.C. Penney Casualty Insurance Co. v. Commonwealth Department of Insurance, 43 Pa. Commw. 360, 402 A.2d 558 (1979) (Insured, complaining of insurer’s noncompliant cancellation of policy, must file complaint with commissioner and follow appellate procedure pertinent thereto, from an administrative hearing to the Commonwealth court.).
As is true with respect to cancellations and non-renewals for individuals under the UIPA, wherein the insurance commissioner is authorized to ensure compliance with the Act, the commissioner is similarly empowered to enforce “[njotice requirements for midterm cancellations and non-renewals” by property and casualty insurers under the 1986 amendment to the Insurance Department Act of 1921. 40 Pa.C.S. §§3403 and 3408. Given the parallel role of the commissioner in the commercial context, as compared to his role in enforcing compliance for non-renewals of individual policies under the UIPA, it makes perfect sense to construe the exclusivity of jurisdiction, vel non, in the same fashion as the higher courts have done with respect to the UIPA. Thus, the rule follows that in the situation wherein an insured alleges activities by the insurer that constitute violations of the Act (e.g., failure to comply with non-renewal provisions of section 3407), it is improper to
Turning to the present case, the gravamen of plaintiff’s complaint is that defendant has not complied with the notice requirements of section 3407 of the Insurance Department Act of 1921, as amended in 1986.
In light of the foregoing, plaintiff’s motion for a permanent injunction must be denied and the preliminary injunction dissolved.
ORDER
And now, January 3, 2002, upon consideration of the plaintiff’s petition for preliminary or special injunction filed on December 10, 2001, and defendant’s memorandum of law, and after a hearing thereon on December 18, 2001, and for the reasons set forth in the accompanying opinion, it is ordered that the preliminary injunction ordered on December 10, 2001, is dissolved, effective 5 p.m., Eastern Standard Time, Monday, January 7, 2002.
. Plaintiff also filed a complaint with the Commonwealth’s insurance department. After conducting a review of defendant’s notice of non-renewal, the department upheld the defendant’s action in a letter, dated December 10, 2001. (Defendant’s exhibit no. 2.)
. As amended in 1986.
. The restrictions concerning cancellation and non-renewal in the UIPA, however, relate only to policies “covering owner-occupied private residential properties or personal property of individuals.” 40 Pa.C.S. §1171.5(a)(9). Nevertheless, as will be seen below, the reasoning employed in the UIPA cases is illustrative of similar jurisdictional issues concerning the commissioner versus the courts to be confronted in the commercial insurance context.
. Arguably, lurking behind the specific averments is a more generalized claim of bad faith on behalf of defendant. No opinion, of course, is rendered upon the merit of such a claim. It is noted, however, that the higher courts have also instructed in the UIPA arena that such claims likewise remain within the exclusive jurisdiction of the commissioner. Kramer v. State Farm Fire and Casualty Insurance Co., 412 Pa. Super. 227, 603 A.2d 192 (1992). Accordingly, applying the parallel approach outlined above, it would seem that such a claim would be precluded in the commercial context as well.