ATTORNEY GENERAL HENRY HAS ASKED ME TO RESPOND TO YOUR RECENT LETTER CONCERNING THE LEGALITY OF AUTOMOBILE INSURANCE BEING SOLD FROM A TAG AGENCY. THERE DOES NOT APPEAR TO BE A NEED TO ISSUE A FORMAL RESPONSE TO YOUR INQUIRY BECAUSE A PLAIN READING OF THE CONTROLLING STATUTE DISCLOSES THAT THERE IS NO PROHIBITION AGAINST THIS TYPE OF ACTIVITY.
THE PROVISIONS OF 47 O.S. 1140 (1988) ET SEQ., AUTHORIZE THE OKLAHOMA TAX COMMISSION TO APPOINT MOTOR LICENSE AGENTS WHOSE LEGAL RELATIONSHIP TO THE STATE IS THAT OF INDEPENDENT CONTRACTORS. ALTHOUGH THE STATUTE SETS FORTH SPECIFIC QUALIFICATIONS AND RESTRICTIONS FOR TAG AGENTS, THERE IS NO RESTRICTION AGAINST A TAG AGENCY ALSO SELLING INSURANCE. IN REVIEWING THIS QUESTION I CONTACTED THE MOTOR VEHICLE DIVISION OF THE OKLAHOMA TAX COMMISSION, WHICH HAS JURISDICTION OVER THE TAG AGENTS, AND THEY ALSO READ THE APPLICABLE STATUTE TO PERMIT THE SALE OF CAR INSURANCE FROM A TAG AGENCY.
INSURANCE AGENTS ARE LICENSED BY THE OKLAHOMA INSURANCE COMMISSIONER PURSUANT TO 36 O.S. 1421 ET SEQ. AM INFORMED BY THE LEGAL DIVISION OF THE INSURANCE DEPARTMENT THAT SEVERAL TAG AGENTS ARE PRESENTLY LICENSED TO SELL INSURANCE. THE ONLY PERTINENT LICENSING RESTRICTION IS FOUND AT 36 O.S. 1425(D) (1988), WHICH PROHIBITS LICENSING OF A FULL-TIME EMPLOYEE OF "THE GOVERNMENT OF THE UNITED STATES OR OF THE EXECUTIVE OR ADMINISTRATIVE BRANCHES OF THE GOVERNMENT OF THIS STATE OR ANY COUNTY OR MUNICIPALITY IN THIS STATE." SINCE TAG AGENTS ARE BY STATUTE INDEPENDENT CONTRACTORS, 36 O.S. 1425 IS NOT APPLICABLE.
THE CONCERN PRESENTED BY YOUR CONSTITUENT APPEARS TO BE ONE OF PRIVATE CONCERN OVER COMPETITION, WHICH DOES NOT FALL WITHIN THE SCOPE OF AN ATTORNEY GENERAL'S OPINION. WHILE A TAG AGENCY MAY NOT USE COERCION TO FORCE CUSTOMERS TO PURCHASE INSURANCE FROM THEIR OFFICE, WE ARE UNABLE TO DETERMINE FROM THE FACTS PRESENTED IN HER LETTER WHETHER SUCH COERCION HAS OCCURRED IN THE INSTANT CASE. SIMPLY OFFERING CAR INSURANCE AT THE SAME LOCATION AS THE TAG AGENCY WOULD PRESENT NO GREATER CONCERN OVER MONOPOLIZING THE MARKETPLACE THAN WOULD A REAL ESTATE AGENT WHO ALSO SELLS HOME OWNERS INSURANCE.
(NED BASTOW)