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single dealership or related dealerships and are normally owned
by a relative of the shareholders of the dealership.
For the entire year of 1990, Berger and Classic each
employed a finance and insurance manager and certain
salespersons. The responsibilities of the managers and
salespersons included offering group credit insurance to
installment buyers. If an installment buyer purchased credit
insurance, the manager and/or salesperson calculated the amount
of the premiums, completed insurance disclosures on the
installment sale contract, obtained the buyer's signature,
explained the coverages, ensured that enrollment certificates
were provided to the buyer, and documented the transaction for
Western or American Way.
Berger paid manager commissions of $38,490 for selling
credit insurance. Classic paid manager commissions of $26,060 in
1989 and $29,025 in 1990 for selling credit insurance. Neither
Berger nor Classic paid commissions to salespersons other than
managers for selling credit insurance.
Under Michigan law, motor vehicle installment sellers are
prohibited from receiving, directly or indirectly, any portion of
the credit insurance premiums. Mich. Stat. Ann. sec. 23.628(31)
(Law. Co-op. 1991). Because of this law, insurance agencies were
created to collect the commissions paid by the insurance
companies. Such agencies, although closely related to the
dealerships, were legally separate from them under Michigan law.
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