Herbring v. Lee
Headline: Oregon’s rule that out‑of‑state insurance companies must pay a $500 fee to add an extra city agent is upheld, blocking a local lawyer from getting a license unless the company pays the fee.
Holding:
- Requires insurance companies to pay $500 for each additional city agent license.
- Prevents individuals from getting agent licenses unless their company meets state fee requirements.
- Affirms state control over licensing of foreign insurers doing business in Oregon.
Summary
Background
Herbring, a Portland lawyer, applied to be a local agent for Northwestern National Insurance Company, a Milwaukee-based company that already had two agents in Portland. Oregon law (§6388) allows one agent per city and lets companies request extra agents only after applying to the state insurance commissioner and paying a $500 annual fee for each additional agent. Herbring submitted a $2 application fee, but the commissioner refused to issue a license because the company had not applied and had not paid the $500 fee. A trial court ordered the license issued; the Oregon Supreme Court reversed, and Herbring appealed here.
Reasoning
The Court considered whether subdivision 8’s fee requirement violated the Fourteenth Amendment rights Herbring raised. It explained the provision regulates insurance companies, not individual agents, and that an individual’s ability to be licensed depends on the company’s compliance with the statutory conditions. Because the insurance company had not challenged the law, Herbring could not validly assert the company’s constitutional rights. The Court also noted Herbring’s claim that the statute was unreasonable under the state’s police power was not properly before the Court. For those reasons, the judgment of the Oregon Supreme Court was affirmed.
Real world impact
Companies seeking extra agents in Oregon must pay the $500 annual fee before those agents can be licensed. Individual applicants cannot obtain a license when the company itself has not met the fee condition. The ruling upholds the state regulator’s power to condition a company’s appointment of local agents on payment of the required fee.
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