Whether an independent insurance agent is still ordinarily an agent of the insured (not the insurer) after 2018 amendments to the Insurance Code; 2018 PA 449; MCL 500.1201(b) & (c) (defining “agent of the insured” & “agent of the insurer”); MCL 500.1211(2); Whether the common-law principle was modified by contract; Genesee Food Servs, Inc v Meadowbrook, Inc

The court held that the common-law principle that an independent insurance agent is ordinarily an agent of the insured, not the insurer, was not abrogated by 2018 amendments to the Insurance Code, except for a narrow exception that was not relevant to this or most insurance transactions. Further, the contract between the agent (defendant-Golden Insurance Agency) and the insurer (defendant-Hartford) here did not modify this common-law principle. Thus, the court concluded the trial court erred in ruling that Golden was Hartford’s agent and in denying Hartford summary disposition on that basis. Plaintiff obtained motor vehicle insurance from Hartford through Golden. After he was injured in an accident, Hartford rescinded the policy based on errors in the insurance application. Plaintiff asserted that Golden was Hartford’s agent and thus, “Golden’s purported failure to correct misinformation in the application had to be subscribed to Hartford.” He relied on the contract between those parties, and on changes made by 2018 PA 449, which added definitions of “agent of the insured” and “agent of the insurer” to Chapter 12 of the Insurance Code. But the court determined he read the “new statutory language too broadly.” The substantive changes involving the new definitions were found in MCL 500.1211(2). “A close reading confirms that the circumstance described in subsection (2) is a narrow, specific one—namely, where the consumer (insured) and insurance company (insurer) each have their own agent, and these two agents in turn have a written contractual relationship with each other.” The court noted that this circumstance “does not involve the mine-run of instances when a consumer works with an independent-insurance agent to compare various insurance policies and choose the one best for the consumer. In those mine-run of instances, there is only one agent—the independent-insurance agent.” Plaintiff sought insurance through an independent agent, Golden, “and not through an agent-to-agent transaction.” Thus, unless Hartford and Golden “somehow contracted around the common-law principle,” it applied here. And the court concluded they did not, finding their contract was “materially indistinguishable from the one” in Genesee Food. As a result, Golden was not acting as Hartford’s agent as to the insurance application it submitted on behalf of plaintiff’s business. Reversed and remanded.