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Dixieland [i.e., the loan company] from its sale of insurance is
in violation of the Miss. Code Ann. section 83-17-105”. Id.
Because of the reliance placed on the Department of Insurance
regulations, the court made its ruling prohibiting an unlicensed
agent from collecting commissions prospective to cases arising on
and after July 1, 1989. Id. at 673. The court chose a
prospective date to allow the Legislature and Executive
Departments to deal with the inconsistencies noted. Id.7
Petitioner argues that the prospective language in Tew
relates only to the private cause of action asserted by the
defendant against the loan company, not to the legality of the
loan company’s actions. Thus, petitioner argues, it would have
been illegal for it to receive commissions even prior to July 1,
1989. We agree. The Mississippi Supreme Court clearly held that
the receiving of commissions by the loan company from the sale of
credit insurance was in violation of Miss. Code Ann. sec 83-17-
105, which required it to be a licensed agent to receive
commissions. Id.
Neither party disputes the rule of Commissioner v. First
Security Bank, 405 U.S. 394 (1972), wherein the Supreme Court
held that the Commissioner’s allocation of income to a taxpayer
7 The statutes in question were not amended after Tew v.
Dixieland Finance, Inc., 527 So. 2d 665 (Miss. 1988). However,
on July 1, 1989, the Department of Insurance promulgated Ins.
Dept. Reg. 89-102 to specifically allow an unlicensed creditor
which sells credit insurance through its licensed employees to
receive commissions.
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