Opinion ID: 2543807
Heading Depth: 1
Heading Rank: 4

Heading: Statutory Authority to Regulate Stop-Loss Insurance

Text: ATA argues the Commissioner is without statutory authority to regulate stop-loss insurance. As head of an agency, the Commissioner's authority is limited by law: Administrative agencies are creatures of statute and their power is dependent upon authorizing statutes, therefore any exercise of authority claimed by the agency must come from within the statutes. There is no general or common law power that can be exercised by an administrative agency. Pork Motel, Corp. v. Kansas Dept. of Health & Environment, 234 Kan. 374, 378, 673 P.2d 1126 (1983). ATA argues Kansas statutes, including the 1997 amendment to K.S.A. 40-2201 (Furse 1993), do not grant the Commissioner the authority to regulate stop-loss insurance. ATA explains the amendment to K.S.A. 40-2201 (Furse 1993) merely defines stop-loss insurance without bringing that definition within the realm of the Commissioner's control. The Commissioner responds to ATA's argument by asserting three distinct arguments: (1) Kansas statutes generally grant the Commissioner authority to regulate stop-loss insurance; (2) the amendment to K.S.A. 40-2201 (Furse 1993) specifically grants the Commissioner authority to regulate stop-loss insurance; and (3) the stop-loss insurance at issue is in substance insurance as defined in K.S.A. 40-2201(a), over which the legislature has given the Commissioner clear authority to regulate. The interpretation of statute is a question of law over which this court exercises unlimited review. Babe Houser Motor Co. v. Tetreault, 270 Kan. 502, 506, 14 P.3d 1149 (2000). The Commissioner relies on K.S.A. 40-102 and K.S.A. 40-103 to argue the legislature has generally conferred the authority necessary to regulate stop-loss insurance. This argument is not persuasive. Highly summarized, K.S.A. 40-102 merely requires to Commissioner to be responsible for the administration of all laws relating to insurance, ... and all other duties which are or may be imposed... by law. Implicit in this grant of authority is the existence of laws and other duties, which are presumably to be found elsewhere in the statutes. In looking for the legislature's grant of authority to the Commissioner to regulate stop-loss insurance, K.S.A. 40-102 sends the reader looking elsewhere. K.S.A. 40-102 by itself does not give the Commissioner specific authority. The Commissioner also asserts K.S.A. 40-103 grants the authority to regulate stop-loss insurance. True, K.S.A. 40-103 gives the Commissioner powers of supervision, control and regulation of corporations ... authorized to transact the business of insurance, but that power is qualified by the phrase, necessary to enforce the laws of this state relating thereto. Therefore, the reader of K.S.A. 40-103 must also look elsewhere to discern the substance of what powers the Commissioner is given. This view was also taken by the Court of Appeals in Durrett v. Bryan, 14 Kan. App.2d 723, 728, 799 P.2d 110 (1990) ([K.S.A. 40-103] expressly provides, however, only the power to make regulations necessary to enforce the laws relating to supervision of insurance, i.e., some other statute must first provide more specific basis for authority before this statute comes into play.). The real issue here involves the amendment to K.S.A. 40-2201 (Furse 1993), which added subsection (b). See L. 1997, ch. 190, sec. 24. K.S.A. 40-2201 now contains the following definitions: (a) The term `policy of accident and sickness insurance' as used herein includes any policy or contract insuring against loss resulting from sickness or bodily injury or death by accident, or both, issued by a stock, or mutual company or association or any other insurer. (b) The term `policy of stop loss or excess loss insurance coverage' means a policy, contract, endorsement, attachments, amendments or other modifications that insure against losses of the policyholder issued by a stock, or mutual company or association or any other insurer. The Commissioner argues the amendment clearly grants authority to regulate stop-loss insurance. Furthermore, the Commissioner argues any other interpretation would render the statute meaningless. ATA, on the other hand, asserts the alternative interpretation that the legislature defined stop-loss insurance in order to exclude such insurance from the Commissioner's reach and that such interpretation is at best just as likely as the Commissioner's. Thus, the proper interpretation of K.S.A. 40-2201(a) and (b) is, on its face, uncertain. If the meaning of the statute cannot be determined by looking at the plain and unambiguous language, then we may look to the historical background of the enactment, the circumstances attending its passage, the purpose to be accomplished, and the effect the statute may have under the various constructions suggested. Robinett v. The Haskell Co., 270 Kan. 95, 100-01, 12 P.3d 411 (2000). As Robinett instructs, the current analysis should consider the historical background of the legislative amendment. At the time of the amendment, the Shawnee District Court had ruled the Commissioner did not have authority under Kansas statutes to regulate stop-loss insurance. It is logical to conclude the legislature amended 40-2201 in response to the Shawnee District Court order. Further, it is logical to conclude the purpose of the amendment was to give the authority to the Commissioner that the district court had said did not exist. The session law in issue, L. 1997, ch. 190, sec. 24, was also known as Senate Bill 204. The language in the session law containing the amendment to 40-2201 did not appear until after the Shawnee District Court's April 25, 1997, memorandum decision. For example, the form of the Senate Bill 204 as reported on March 24, 1998, only contained 15 sections but did not yet contain § 24. House J., 1997, pp. 539-40. The next time Senate Bill 204 appears in either the House or Senate Journals with the amendment affecting 40-2201 was the report of the conference committee on May 3, 1997. House J., 1997, pp. 958-68. ATA argues that if the legislature's amendment was in response to the Shawnee District Court's decision, it does not follow that the legislature responded intending to change the law, i.e. the legislature might have intended to memorialize what the district court had established. When a legislature revises an existing law, it is presumed that the legislature intended to change the law. Board of Sedgwick County Comm'rs v. Action Rent to Own, Inc., 266 Kan. 293, 304, 969 P.2d 844 (1998). However, this presumption may be weak according to the circumstances and may be wanting altogether. 266 Kan. at 304. The presumption is fairly strong in the case of an isolated, independent amendment, but is of little force in the case of amendments adopted in a general revision or codification of the law. Board of Education of U.S.D. 512 v. Vic Regnier Builders, Inc., 231 Kan. 731, 736, 648 P.2d 1143 (1982). Assuming the presumption applies here, and there is no reason to believe it does not given the amendment is isolated and independent, the amendment is interpreted as granting the Commissioner authority to regulate stop-loss insurance. Assuming the opposite conclusion, i.e. the legislature intended for the Commissioner not to have such authority, would render the amendment meaningless. There is a presumption the legislature does not enact meaningless legislation. KPERS v. Reimer & Koger Assocs., Inc., 262 Kan. 635, 643, 941 P.2d 1321 (1997). At the time of the amendment, the district court had already ruled, issuing an injunction barring the Commissioner from regulating the insurance. As a practical matter, there was nothing for the legislature to do if the Shawnee District Court's decision was the outcome it desired. The legislature's amendment to 40-2201 gives the Commissioner the authority to regulate stop-loss insurance.