Opinion ID: 1803887
Heading Depth: 1
Heading Rank: 3

Heading: The Commissioner of Insurance

Text: Prior to 1956, the Secretary of State was the ex-officio insurance commissioner of Louisiana. Employers-Commercial Union Ins. Co. v. Bernard, 303 So.2d 728, 730 (La.1974). The 1921 Constitution, however, gave the legislature the power to create a separate office for the insurance commissioner. La. Const. art. V, sec. 20 (1921). See also id. By Act 200 of 1956, the legislature exercised that power, creating for the first time the office of the Commissioner of Insurance and charging him with the duty of administering the provisions of the Insurance Code. G. Frank Purvis, Jr., Legislation Affecting Insurance, 17 La. L.Rev. 64 (1956). Act 200 transferred the duties and functions relating to insurance formerly vested in the Secretary of State to the newly created Commissioner of Insurance. The Act provided that the Commissioner would initially be appointed by the Governor with the consent of the Senate, but would thereafter be elected beginning with the general state elections for state officials in 1960 and then every four years thereafter. Subsequent to the passage of Act 200, the legislature in 1958 proposed a constitutional amendment to add the Commissioner of Insurance to the list of constitutionally elected officers, which, if passed, would have given constitutional ratification to Act 200. William C. Havard, The 1958 Proposals to Amend the Louisiana Constitution, 19 La. L.Rev. 128, 131 (1958). However, the amendment, which was proposed by Act 560 of 1958 was rejected by the voters in the general election of 1958. Id. at 128. See also William C. Havard, The 1960 Proposals to Amend the Louisiana Constitution, 21 La. L.Rev. 109, 113 n. 11 (1960). By Act 609 of 1960, the legislature again proposed a constitutional amendment to add the Commissioner of Insurance to the constitutional elective offices. Id. at 113. This time the amendment was approved by the voters and the Commissioner of Insurance was created as a constitutionally elective officer in the executive branch at that time. Thus, La. Const. art. V, sec.1 (1921) was amended to provide in pertinent part: The executive department shall consist of a Governor, Lieutenant Governor, Comptroller, Treasurer, Secretary of State, Register of the Land Office, Commissioner of Agriculture and Immigration, Commissioner of Conservation, Commissioner of Insurance and Custodian of Voting Machines.... (Emphasis added). The 1921 Constitution provided that the legislature could not consolidate the office of the Commissioner of Insurance with any other office and stated that the Commissioner of Insurance was to be elected for a term of four years. La. Const. art. V, secs. 1 and 18 (1921). The 1921 Constitution, however, did not specify any duties or functions of the Commissioner of Insurance; instead, the duties and functions were statutorily provided. See Records of the Louisiana Constitutional Convention of 1973: Committee Documents, Vol. XI, p. 174 (Exhibit F). At the Constitutional Convention of 1973, the delegates determined to propose to the voters that the office of the Commissioner of Insurance be continued as a constitutional elective office. There was strenuous debate, however, on the issue of whether the duties and functions of the Commissioner should be specified in the new constitution, or whether the duties and functions should continue to be only statutorily defined. See Records of the Louisiana Constitutional Convention of 1973: Convention Transcripts, Vol. VI, pp. 644-63. For example, delegates rejected the following proposal: Section 11. Powers and Duties of the Commissioner of Insurance Section 11. There shall be a department of insurance headed by the commissioner of insurance, who shall administer the insurance code. The department shall exercise such functions and the commissioner shall have such other powers and perform such other duties as may be authorized by this constitution or provided by statute. Id. at p. 644. Delegate Stagg explained the several amendments that were to be offered as follows: The difference between this proposal and the reason why there are three amendments before you instead of just one, is because there is a philosophical dispute going on among those who propose the amendments. The other sets of amendments gives to the insurance commissioner the responsibility for regulatory and other functions. A third one says that he shall administer the rate-making and regulatory functions related to insurance. This is the difference between or among the amendments. One of them permits the insurance commissioner simply to administer the insurance code and that the regulatory and rate-making matters are carried on like they are now by the casualty and surety rating bureau. This convention will have to decide how we shall administer the insurance because the proposers of these amendments have not agreed. Id. After considerable debate on the above proposal, it was rejected, in part because many delegates believed the amendment did not give sufficient rate-making power to the Commissioner, while other delegates apparently believed the wording contained in the proposal was too broad. Id. at pp. 644-49. Two other proposals that more specifically enunciated the powers of the Commissioner were similarly rejected after lengthy debate. Id. at pp. 649-53, 657-61. One of the rejected proposals would have given the Commissioner the constitutional authority to administer the Insurance Code and made him responsible for all regulatory and other functions of the state relating to insurance and all of its phases. Id. at p. 649. Another of the rejected proposals would have given the Commissioner the authority to administer the insurance code and made him responsible for all rate making, regulatory and other functions of the state relating to insurance. Id. at p. 657. The proposal that was finally adopted by the delegates, and ultimately approved by the voters, stated: Section 12. Powers and duties of the commissioner of insurance Section 12. There shall be a department of insurance headed by the commissioner of insurance. The department shall exercise such functions and the commissioner shall have such powers and perform such duties as may be authorized by this constitution or provided by statute. Id. at p. 654. In explaining this amendment, delegate Casey stated: Let's lay it on the line that as this amendment is present right now, today, the legislature and the legislature alone, unless we put something else someplace in this constitution, will enunciate those duties and functions of the commissioner of insurance and will enunciate the functions of the department of insurance. That is what the law is today and has been previously and frequently mentioned, that really is all that today's constitution does is establish a commissioner of insurance and says he's elected for four years. The entire functions are set forth only by statute and by law. I submit to you that this is the simplest and I would hope the best method of accomplishing this end. If you wish, on the other hand, that the commissioner of insurance would have regulatory functions, let it be clearly understood that you don't vote for my amendment. Id. The debate continued, in part, as follows: Delegate Arnette: So, if your amendment is adopted, what we've got is a situation of a statewide elected official with no power. Is that as it is now? ... Delegate Casey: Mr. Arnette, if this amendment is adopted, it merely says that the legislature by statute will establish the duties and functions of that officer and of that department. This is done in many, many other cases, that we are giving to the legislature the prerogative to establish the duties and functions of certain activities or agencies of the state.    Delegate Juneau: Mr. Chairman and fellow delegates ... Do you want to elect a commissioner of insurance who really doesn't have the true responsibility with regard to insurance and that's rates? That's what it's really all about.... If you adopt the amendment, you have in essence a commissioner of insurance who really doesn't have the authority.... We've got them hanging in space with no authority.    Delegate Jenkins: Mr. Chairman, delegates, ... Well, our theory is if we give all of this power to one man, he will, as many people have said, be an absolute czar. He will be allowed to run on a plank promising to the people all sorts of things which he can deliver only by seriously injuring or curtailing the services of this occupation, this profession. You need in something with such tremendous power some system of checks and balances.... Let's have a commissioner of insurance elected by the people, but let's give the legislature some authority to alter his functions and responsibilities as changing times and new information dictate, rather than once and for all setting him up as a czar over this industry. Id. at pp. 654-55. At the conclusion of these and other remarks, the amendment was adopted. Consequently, La. Const. art. IV, sec.11, entitled Commissioner of Insurance; Powers and Duties, now provides: There shall be a Department of Insurance, headed by the commissioner of insurance. The department shall exercise such functions and the commissioner shall have powers and perform duties authorized by this constitution or provided by law.