Michigan Supreme Court Bars Insurance Commissioner from Retroactively Changing the Moral Character Standards for Insurance Agents.

Most professional licenses in Michigan require that the applicant possess good moral character and turpitude. MCL 338.41. Increasingly, however, the Legislature is writing a “no prior record” clause into individual licensing statutes negating much of the impact of the laudable act. Mr. King was licensed as an insurance agent with an automobile related felony conviction. He was originally licensed by the Insurance Commissioner, but the license was later revoked without notice based on an agency decision that a former offender was never entitled to licensure. The Circuit Court reversed stating that nothing in the new laws retroactively revoked the old laws as applied to individuals already licensed. The Court of Appeals affirmed and now a narrowly divided Michigan Supreme Court affirmed. King v State, Supreme Court No. 140684.

Given the departure of Justice Davis from the Court (who was in the majority), a motion for rehearing seems likely. What seems particularly disturbing is the extent that the agencies are willing to go to obviate this important Act. With the U.S. Supreme Court finding in Graham v Florida that people can change, you’d think that agencies would recognize the same.