Verl W. and Frances M. Haderlie - Page 5

                                        - 5 -                                         

               The Royal insurance arrangement was transacted in Idaho                
          Falls, Idaho.  Schwab was licensed to conduct insurance business            
          in Wyoming, but not in Idaho.  Royal was licensed to do business            
          in Idaho.  Rebating by an insurance agent violates Idaho                    
          insurance law.  An insurance company is permitted to rebate part            
          or all of an insurance premium under the law of Idaho.  So long             
          as petitioner made no misrepresentation in applying for the                 
          insurance with Royal, the rebating aspect, although in violation            
          of Idaho law insofar as the rebate was made by Schwab, would not            
          invalidate the insurance coverage between Royal and petitioner.             
          Royal was aware of the rebating after petitioner's policy had               
          been applied for and came into force, and, because of its view              
          that petitioner had done nothing illegal, Royal did not attempt             
          to cancel the policy or contact petitioner.  Royal believed that            
          only Schwab was involved in illegal activity (rebating).  The               
          rebating by Schwab also violated the terms of the agreement                 
          and/or relationship between Schwab and Royal.                               
               Petitioner was under the mistaken impression that after the            
          first year of the Royal policy, he would have been entitled to              
          reduced coverage for the next year at a $3,500 premium.  Although           
          petitioner thought the Royal insurance transaction was unusual,             
          he was not aware of any illegality or irregularity until after              
          the policy had been allowed to lapse.  Petitioner's Royal policy            
          was allowed to lapse at the end of the first year, and just prior           

Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  Next

Last modified: May 25, 2011