August 16, 1994
Mr. William T. Graham Commissioner of Banks Post Office Box 29512 Raleigh, NC 27626-0512
Re: Advisory Opinion — Consumer Finance Company Sales of Automobile Physical Damage Insurance Pursuant to G.S. §§ 53-1-189(a) and 58-57-100 Without other Business Authority.
Dear Commissioner Graham:
This will respond to your request for an opinion on whether or not consumer loan companies, in view of recent legislative action, may sell single or dual interest automobile physical damage insurance ("VSI") without applying to the Commissioner of Banks for other business authority pursuant to G.S. § 53-172(b). For the reasons set forth below, it is our opinion that consumer finance companies (herein referred to as "consumer finance licensees" or "licensees") may sell such insurance without other business authority.
DISCUSSION OF THE ISSUE
In your request for an opinion, you recited certain provisions of a November 10, 1993 Opinion from this office written by Special Deputy Attorney General Henry T. Rosser and Senior Deputy Attorney General Ann Reed. That Opinion concluded in part that as VSI was not mentioned in
G.S. § 53-189(a), the statutory authority for consumer finance licensees to sell various credit insurance products, licensees could not sell VSI without other business authority (which may be granted by the Commissioner pursuant to G.S. § 53-172(b)).
Technically, the November 10, 1993 Opinion was correct and we do not disagree with the conclusions it reached at that time. However, as you know, S.B. 1719, enacted as Chapter 720 of the 1993 Session Laws, Reg. Sess., 1994, although amending the insurance laws, Chapter 58 of the General Statutes, as opposed to the Consumer Finance Act, Article 15 of Chapter 53, expressly provided that "[a]utomobile physical damage insurance as described in this section is a form of credit property insurance, as referred to in G.S. § 53-189."
While one might continue to argue, under the maxum of inclusio unius est exclusio alternus, that where the General Assembly has expressly provided in G.S. § 53-189(a) for the sale of credit life, credit accident and health, credit unemployment and credit property insurance, but did not expressly provide for VSI, that the latter may not be sold without other business authority, we are not convinced that this would now apply. Again, G.S. § 58-57-100, as amended by S.B. 1719, provides that VSI ". . . is a form of credit property insurance as referred to in G.S. § 53-189. " We do not know why the General Assembly elected to resolve this issue by amending the insurance laws as opposed to the banking laws. Nevertheless, it is our opinion that the amendment resolves any lingering doubt on this issue.
CONCLUSION
It is a cardinal principle of statutory construction that the intent of the legislature controls the
interpretation of a statute. See, NC Index 4th, Statutes § 29 (1994). See also, State v. Fulcher,
294 N.C. 503, 243 S.E.2d 338 (1978). In our opinion, the legislative intent here is clear. It is,
therefore, our conclusion that consumer finance licensees, operating under the provisions of
Article 15 of Chapter 53 of the North Carolina General Statutes, may sell single or dual interest
automobile physical damage insurance, subject to the provisions of G.S. § 58-57-100, without
applying to your office for other business authority to do so.
We trust that this addresses your questions to this office. If, however, we may be of further
assistance, please do not hesitate to let us know.
Andrew A. Vanore, Jr.
Chief Deputy Attorney General
L. McNeil Chestnut
Assistant Attorney General