Hartford Accident & Indemnity Co. v. Insurance Commissioner

Dissenting Opinion by

President Judge Crumlish, Jr.:

Today’s majority decision unduly extends the Insurancé Commissioner’s authority. The Commissioner is now given judicial imprimatur to impress his social theory upon the insurance rate review process.

It is axiomatic that insurance is an evolved plan with risk distribution as its primary characteristic. *259Moreover, to make insurance a feasible means of providing maximum benefit for tbe least amount of money, the insurers must bave sufficient knowledge of past events to be able to determine tbe probability of certain risks occurring. Since insurance is based on this risk probability, tbe insurance companies must be able to rely on actuarial integrity in establishing rates.

Tbe Legislature recognized tbe importance of predictability and objectivity in tbe rate-making process. Section 3(a) of tbe Rate Act enumerates several factors, all of which can be analyzed with a high degree of objectivity, that tbe Commissioner must consider in reviewing rate proposals. Although tbe Commissioner is given tbe authority to consider “all other relevant factors within and outside tbe Commonwealth,” tbe Legislature must bave meant all other factors which can be subject to the same degree of objective scrutiny.

Tbe majority decision implicitly authorizes tbe Commissioner to inject bis own philosophical views into tbe rate review process; even though tbe source of these views (and consequently tbe views themselves) may change at least as often as tbe Commonwealth’s executive branch of government. Our late President Judge Bowman, dissenting in Capital Blue Cross v. Insurance Department, 34 Pa. Commonwealth Ct. 584, 593, 383 A.2d 1306, 1311 (1978) (dissent), noted tbe danger of permitting tbe Commissioner to dictate tbe application of an appealing, or even socially popular, socioeconomic theory upon tbe insurance rate approval process. Although there I bad joined tbe majority, upon reflection, I now realize that my position in Capital Blue Cross was not the most enlightened one.

I concur with tbe majority that due deference must be given to tbe Commissioner’s judgment. He is presumed to be a specialist in tbe insurance field (although not conclusively so merely because of bis *260office). This Commissioner, however, has strayed beyond the bounds of the insurance field and into the sphere of policy determination, an area properly reserved to the elected body. If it were determined that the proposed rates were actuarily unsound or in some other manner clearly illegal, I would join in disapproving such a scheme. This determination, however, cannot be made on the present record. I agree with President Judge Bowman’s observation that the majority decision “assumes that the Commissioner enjoys omnipotence superior to all* that a particular socioeconomic theory is valid and not subject to opinion difference,” Capital Blue Cross, 34 Pa. Commonwealth Ct. at 594, 383 A.2d at 1311, and hence I would remand for moré actuarial evidence against which to examine the Commissioner’s judgment.