TUESDAY, SEPTEMBER 9, 1997
Style: Almerico v. RLI Insurance Co., No. 89,131

Facts: Almerico was injured while a passenger in an automobile the owners of which hadpurchased an umbrella policy from RLI Insurance. After the claim for coverage wasmade, RLI rescinded the policy on the ground that material misrepresentations had beenmade by the insureds in obtaining it. RLI brought an action for declaratory judgment. Onmotions for summary judgment the trial court determined that material misrepresentationshad been made but that RLI would not be allowed to rescind the policy because it wasbound by the acts of its agent, who had assisted the insureds in applying for the policyand had knowledge of the relevant facts. On appeal, the district court of appeal held thatthe insurance agent was not acting as agent of the insurer and that the insurer was notprevented from rescinding on the ground of material misrepresentations.

Issue: Whether the actions of the insurance agent in arranging the purchase of the policyfrom the insurer are binding against the insurer in the face of the insurer's defense ofmaterial misrepresentations.