Massachusetts Appeals Court holds that only fine under Mass. Gen. Laws ch. 175 s. 177 applies where insurance agency employed unlicensed broker

I have been discussing Anawan Ins. Agency, Inc. v. Division of Ins., 76 Mass. App. Ct. 447 (2010), in which an insurance agency was accused of employing an unlicensed broker.

In paying the unlicensed broker, the insurance agency had violated both Mass. Gen. Laws ch. 175 § 177, the statute prohibiting payment to unlicensed brokers, and Mass. Gen. Laws ch. 176D, § 2, which prohibits unfair or deceptive acts or practices in the business of insurance.

Violation of Mass. Gen. Laws ch. 175 § 177 was punishable by a fine (prior to the inapplicable amendment to the statute) of "not less than twenty nor more than two hundred dollars."

Pursuant to § 7 of ch. 176D, violation of ch. 176D is punishable by a fine of "not more than one thousand dollars for each and every act or practice."

The court held that only the fine under § 177 could be assessed, because § 7 of ch. 176D is a statute of general application to all unfair practices in the insurance industry, but § 177 of ch. 175 applies specifically to transactions with unlicensed brokers. As a matter of statutory interpretation, the more specific statute must govern.