Could Washington's insurance commissioner issue an organized insurer a financing solicitation permit lasting more than two years?

Plain-English summary

The Washington Attorney General concluded in 1964 that the insurance commissioner could issue an organized insurer a subsequent-financing solicitation permit with an initial term longer than two years. The commissioner had to specify a reasonable duration under the statute governing that type of permit. The opinion addressed authority to choose the term, not a requirement to grant every longer request.

A general permit statute limited permits to two years, subject to extensions for good cause. The AG read the separate, more specific provision for organized insurers' subsequent financing as controlling instead. Applying the general cap there would make the specific statute's duration language ineffective.

Currency note

This opinion was issued in 1964. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: Did the two-year permit limit apply to subsequent financing by an organized insurer?
A: The AG said no. The more specific permit provision let the commissioner set a reasonable duration.

Q: Was a permit longer than two years automatic?
A: No. The opinion placed the duration within the commissioner's discretion, subject to reasonableness.

Q: Why did the AG use the special permit rule?
A: It governed organized insurers' subsequent financing specifically, while the two-year language addressed solicitation permits generally.

Background and statutory framework

The opinion compared RCW 48.06.070's general duration limit with RCW 48.06.180's language allowing a reasonable duration for certain subsequent-financing permits. RCW 48.01.150 directed that specific insurance-code provisions prevail over general ones. The AG applied that rule to the permit term.

Citations and references

The opinion discusses RCW 48.06.070, RCW 48.06.180, and RCW 48.01.150.

Source

• Landing page: https://www.atg.wa.gov/ago-opinions/offices-and-officers-state-insurance-commissioner-organized-insurers-solicitation

Original opinion text

Attorney General John J. O'Connell

OFFICES AND OFFICERS ‑- STATE ‑- INSURANCE COMMISSIONER ‑- ORGANIZED INSURERS ‑- SOLICITATION PERMITS ‑- DURATION.

The insurance commissioner has the authority in the exercise of his discretion to issue a solicitation permit for subsequent financing under RCW 48.06.180 for an initial effective period in excess of two years.

September 8, 1964

Honorable Lee I. Kueckelhan
Insurance Commissioner
Insurance Building
Olympia, Washington

Cite as: AGO 63-64 No. 119

Dear Sir:

By letter previously acknowledged you have requested the opinion of this office on the following question:

"Is it within the Insurance Commissioner's discretion to issue a solicitation permit for subsequent financing under RCW 48.06.180 for an initial effective period in excess of two years?"

We answer your question in the affirmative.

ANALYSIS

RCW 48.06.070 and RCW 48.06.180 both pertain to the duration of a solicitation permit issued by the insurance commissioner.

RCW 48.06.030 provides in pertinent part as follows:

"(1) No person forming or proposing to form in this state an insurer, or insurance holding corporation, or stock corporation to finance an insurer or insurance production therefor, or corporation to manage an insurer, or corporation to be attorney in fact for a reciprocal insurer, or a syndicate for any of such purposes, shall advertise, or solicit or receive any funds, agreement, stock subscription, or membership on account [[Orig. Op. Page 2]] thereof unless he has applied for and has received from the commissioner a solicitation permit."

RCW 48.06.070 provides in material part as follows:

"Every solicitation permit issued by the commissioner shall:

"(1) Be for a period of not over two years, subject to the right of the commissioner to grant a reasonable extension for good cause."

The statute further specifies terms and conditions of the permit.

RCW 48.06.180, with reference to certain permits, provides as follows in material part:

"(1) No domestic insurer, or insurance holding corporation, or stock corporation for financing operations of a mutual insurer, or attorney in fact corporation of a reciprocal insurer, after

"(a) it has received a certificate of authority, if an insurer, or

"(b) it has completed its initial organization and financing if a corporation other than an insurer, shall solicit or receive funds in exchange for any new issue of its corporate securities, other than through a stock dividend, until it has applied to the commissioner for, and has been granted, a solicitation permit.

". . .

"(3) Any such solicitation permit granted by the commissioner shall befor such duration, andshall contain such terms and be issued upon such conditions as the commissioner may reasonably specify or require." (Emphasis supplied.)

The only limitation in this statute with respect to the duration of the permit is that duration which the commissioner [[Orig. Op. Page 3]] may reasonably specify or require. Presumably, the commissioner could reasonably specify a duration in excess of two years. Furthermore, even the terms and conditions of the permit issued under this statute are left to the discretion of the commissioner, while under RCW 48.06.030, they are specified by the legislature.

The general rule of statutory construction that particular provisions prevail over general provisions has been specifically incorporated into the insurance code by the legislature's enactment of RCW 48.01.150, which provides:

"Provisions of this code relating to a particular kind of insurance or a particular type of insurer or to a particular matter prevail over provisions relating to insurance in general or insurers in general or to such matter in general."

RCW 48.06.070 refers to "every solicitation permit." It is couched in general language and must be considered to refer to solicitation permits generally. RCW 48.06.180, on the other hand, is a special act, plainly intended to cover the subject of solicitation permits issued to organized insurers. Its subject matter is more specific than that contained in RCW 48.06.070, and its provisions are designed to cover the subject matter fully, to the exclusion of RCW 48.06.070.

Therefore, to construe RCW 48.06.070 to be applicable to solicitation permits issued to organized insurers would render meaningless the language in RCW 48.06.180 that refers to the duration of the permit. It is well settled that courts will presume that the legislature did not indulge in vain and useless acts and that some significant purpose or object is implicit in every legislative enactment. Kelleher v. Ephrata School District, 56 Wn. (2d) 866, 872, 355 P. (2d) 989 (1960).

It is therefore our opinion that the two-year limitation contained in RCW 48.06.070 is not applicable to a solicitation permit issued to an organized insurer and that the insurance commissioner may, in his discretion, issue a solicitation permit to an organized insurer for a period in excess of two years.

[[Orig. Op. Page 4]]

We trust the foregoing will be of assistance to you.

Very truly yours,

JOHN J. O'CONNELL
Attorney General

BASIL L. BADLEY
Assistant Attorney General