Opinion ID: 1342549
Heading Depth: 2
Heading Rank: 3

Heading: Interrelation of CCPA with Insurance Statutes

Text: At the center of this matter is disagreement as to the appropriate forum for challenging approved insurance rates. Because the Legislature has granted exclusive jurisdiction over matters of insurance rate setting to the Commissioner, CitiFinancial argues that any determination of whether approved insurance rates are excessive or unreasonable must be decided, at least in the first instance, by the Commissioner. Conversely, Respondent Lightner looks to the language in the Act creating a cause of action for excessive charges and maintains that the issue should be resolved in a judicial rather than an administrative forum. See W.Va. Code § 46A-5-101(1). Turning to the position advocated by Respondent Lightner, we examine the basis for his assertion that a circuit court is the proper forum in which to address the issue of whether he was charged unreasonable and excessive amounts for credit insurance. As support for his contention, Respondent Lightner goes beyond the Act and relies upon language added to the insurance statutes in 2002 in direct response to a decision issued by this Court interpreting statutes pertaining to premiums and policy exclusions. [22] Citing the language of West Virginia Code § 33-6-30(c) that accords approved insurance rates a presumption of statutory compliance, Respondent uses this language as the underpinning for judicial involvement in issues of insurance rate making. Through its creation of a cause of action permitting recovery of excess charges included in consumer transactions, Respondent maintains that the Legislature set in place a procedure by which the statutory presumption of compliance may be challenged in a judicial forum. [23] To accept Respondent's position would require us to view the inclusion of the presumption language in West Virginia Code § 33-6-30(c) as express vitiation of the rate-making authority previously granted to the Commissioner in both the insurance statutes and in the Act itself. This construct is easily disassembled. Attempting to diminish the rate-making authority granted to the Commissioner, Respondent Lightner relies upon statutory language that, while having little significance to the issues presented here, only serves to underscore the Legislature's intent to remove issues involving insurance rates from the purview of judicial review. With its 2002 amendments to the statutory provision that addresses how insurance policies are to be construed, the Legislature was clear in its intent: The new provisions, including the presumption, were expressly adopted to curb what the Legislature perceived as judicial intrusion into issues of insurance rate setting. See W.Va.Code § 33-6-30(b). [24] Whether intended or not, the position advanced by Respondent Lightner has the end result of involving the judiciary in issues of insurance rate making. As evidenced by the data Respondent Lightner introduced to defeat CitiFinancial's motion for summary judgment, factual evidence on issues such as loss ratios and rates of return is required to disprove the reasonableness of an established insurance rate. These issues, due to their highly specialized nature, are typically reserved to the Commissioner's bailiwick. See W.Va.Code §§ 33-20-3; 33-20-4, 33-6-30(b). It stands to reason that if a circuit court is allowed to invade this administrative arena and reexamine the issue of whether a given insurance rate is reasonable or excessive, the judiciary will necessarily be substituting its determinations as to permissible insurance rates for those previously determined by the Commissioner and supplanting its opinion in matters expressly delegated to the Commissioner's expertise and jurisdiction. A further peril that cannot be overlooked is that judicial intervention in the rate making area would open the door to conflicting decisions amongst the various circuits regarding what constitutes an unreasonable or excessive charge for credit insurance. In this manner then, the uniformity of regulation that the Legislature has established by delegating all matters involving rate making and rate filings to the Commissioner is certain to be infringed if circuit courts or jurors are permitted to second guess the reasonableness of rates previously approved by the Commissioner. [25] To support his theory that the judiciary has concurrent authority over issues of insurance rate making, Respondent Lightner argues that there is no statutory support for CitiFinancial's contention that the Commissioner has exclusive jurisdiction with regard to such matters. We disagree. Under the comprehensive system established by the Legislature for purposes of regulating the insurance industry there is no question that the Commissioner is charged with overseeing the rates charged for various insurance products. See W.Va.Code § 33-20-3 (listing factors pertinent to insurance rate making); W.Va.Code § 33-20-4 (requiring that insurers comply with filing obligations); see also W.Va.Code § 33-6-8 (requiring Commissioner's approval of insurance-related forms). And, instead of reducing the Commissioner's authority over issues of insurance rate making, an examination of the CCPA demonstrates that the Legislature reaffirmed the Commissioner's authority over this regulatory area. In the introductory language to West Virginia Code § 46A-3-109, the Legislature announced: [ N]othing contained in this section with respect to insurance in any way limits the power and jurisdiction of the Insurance Commissioner of this state in the premises[.] W.Va.Code § 46A-3-109(a)(2) (emphasis supplied). After requiring that permissible charges in consumer transactions must be reasonable in relation to the benefits, the Legislature made it mandatory that whenever the additional charge was for insurance this determination has to be made by the Commissioner: Provided, That as to insurance, the policy as distinguished from a certificate of coverage thereunder may only be issued by an individual licensed under the laws of this state to sell the insurance and the determination of whether the charges therefor are reasonable in relation to the benefits shall be determined by the Insurance Commissioner of this state [.] W.Va.Code § 46A-3-109(a)(4) (emphasis supplied). To identify the amount that can be charged for credit-related insurance, the rate making authority of the Commissioner is called upon: The premium or identifiable charge for the insurance required or obtained by a creditor may equal, but may not exceed the premium rate filed by the insurer with the Insurance Commissioner. W.Va. Code § 46A-3-109(b)(3). In the closing paragraph of this statutory provision, the Legislature granted the Commissioner exclusive authority to promulgate legislative rules for the purpose of implement[ing] the provisions of this article relating to insurance. W.Va.Code § 46A-3-109(c). Not only are we unable to identify any provision in the Act that supports Respondent Lightner's contention that the Legislature intended to give circuit courts concurrent jurisdiction over issues of insurance rate making, we find to the contrary that the Act is replete with language indicating that the Commissioner's jurisdiction over insurance-related matters was not intended to be altered by the provisions of the CCPA. See W.Va.Code § 46A-3-109(a)(2),(a)(4),(b)(3),(c). As discussed above, the Legislature confirmed its grant of authority to the Commissioner to regulate the rate-making aspects of the insurance industry in each of these referenced statutory provisions. See id. Accordingly, we conclude that in providing for a cause of action that permits the recovery of excess charges included in a consumer credit transaction pursuant to the provisions of West Virginia Code § 46A-3-109 and § 46A-5-101, the Legislature did not authorize the circuit courts to invade the jurisdiction of the Commissioner and conduct a reexamination of insurance rates previously approved by the Commissioner. Rather than challenging the credit insurance rates through the filing of an action under the CCPA, Respondent Lightner should have sought relief under West Virginia Code § 33-20-5(d). That provision expressly provides the right to a hearing before the Commissioner for the purpose of challenging approved insurance rates. In explanation of his failure to seek such a hearing, Respondent Lightner asserts that he cannot be made whole through such an administrative challenge. While monetary damages cannot be awarded in connection with an administrative hearing held pursuant to West Virginia Code § 33-20-5(d), that provision is the procedural mechanism established by the Legislature for challenging insurance rates. [26] And, in our opinion, the absence of monetary damages does not suggest that an aggrieved party or organization who seeks to challenge insurance rates can bypass the administrative procedures expressly set in place for the purpose of questioning approved insurance rates. [27] Even if an individual seeks to pursue monetary relief under the Act, an administrative challenge should occur before recovery is sought under the Act for alleged excessive rate charges. [28] Accordingly, we hold that any challenge to an approved insurance rate by an aggrieved person or organization should be raised pursuant to the provisions of West Virginia Code § 33-20-5(d) in a proceeding before the Commissioner. [29] Any ruling issued by the Commissioner on the issue of the reasonableness of insurance rates or compliance with statutory provisions is a final order that is subject to the provisions of the Administrative Procedures Act (APA). See generally W.Va. Code § 29A-5-1 to -5 (Repl.Vol.2007) (setting forth provisions for contested administrative matters); see C.S.R. § 114-13-8 (providing that every final order entered by Commissioner constitutes final order under APA which is appealable to circuit court); see also W.Va.Code § 33-2-13 (requiring Commissioner to hold hearings upon demand of aggrieved person). Consequently, judicial review of a determination by the Commissioner on the issue of whether insurance rates are reasonable and in compliance with statutory requirements does exist. Such review, however, occurs as a result of the APA and not, as Respondent Lightner sought, through filing a cause of action under the CCPA. As discussed above, the inclusion of the statutory language that creates a presumption of compliance occurred as part of the Legislature's attempt to strengthen the rate making powers of the Commissioner. See W.Va.Code § 33-6-30(b),(c) (2002 amends). Through its adoption of this statutory language, the Legislature established a procedural mechanism by which insurance rates are presumed to be in compliance with all regulatory requirements upon their approval by the Commissioner. While approved insurance rates are still subject to challenge, the burden for disproving the validity of such rates is placed on the entity who seeks to set the rates aside. See W.Va. Code § 33-20-5(d). Respondent Lightner argues that he should be able to challenge this presumption as part of his cause of action under the CCPA before the circuit court. The inclusion of the presumption within the insurance statutes and as part of legislation specifically enacted to prevent judicial reexamination of approved insurance rates suggests just the opposite. Consequently, we are of the opinion that the presumption of statutory compliance for approved insurance rates set forth in West Virginia Code § 33-6-30(c) may only be rebutted in a proceeding before the Commissioner. Based on the foregoing discussion, we find the necessary grounds [30] for issuing a writ of prohibition to prevent the enforcement of the May 6, 2008, order of the Circuit Court of Marshall County denying partial summary judgment to CitiFinancial with regard to the claims pending against it for alleged unreasonable and excessive credit insurance charges. Accordingly, the writ of prohibition sought by CitiFinancial is granted. Writ granted.