Court Opinion

ID: 7320678
Source: CourtListenerOpinion
Date Created: 2022-07-25 21:16:21.238714+00
Date Added: 2024-06-11T16:19:50.299398
License: Public Domain

KESTIN, J.S.C. (Temporarily Assigned),
concurring in part and dissenting in part.
I concur in all aspects of the court’s decision except the deference accorded the Commissioner’s decision disallowing Aetna the opportunity to establish a reserve, funded through its rates, to meet its statutory obligation to share in the losses incurred by the MTF. The Commissioner’s stated rationale for denying this relief is that the establishment of a reserve is premature because no MTF loss bill has yet been sent to Aetna. This position makes no sense to me.
Establishment of a reserve to meet an anticipated loss is, by definition, premature; but that quality negates neither the prudence of such a step nor its necessity. It is common practice among well-run businesses to establish reserves to meet anticipated losses. Failure to do so might well be considered to be evidence of mismanagement.
I agree that the Commissioner of Insurance is authorized to regulate insurance companies, not to operate them. I would take the next step in the reasoning process and hold that, absent a clear source of authority in a specific statutory provision or in a regulation adopted in fair pursuit of a power *57conferred by statute, the Commissioner may not forbid the use of a prudent business practice.
We are obliged to defer to a proper discretionary determination by the head of a State agency. See Metromedia, Inc. v. Director, Div. of Taxation, 97 N.J. 313, 327, 478 A.2d 742 (1984). But, in the absence of a statute-based policy determination supported by substantial evidence in the record, the Commissioner’s decision to deny Aetna the right to pursue a prudent business practice is arbitrary and, therefore, does not call for deference.
Although the extent of the ultimate MTF deficit has not yet been quantified, the Commissioner acknowledges that it will be substantial. Aetna’s future responsibility for a share of that loss is not merely anticipatory, it is inevitable. See N.J.S.A. 17:33B-lld.
There is no good in arguing with the inevitable. The only argument available with an east wind is to put on your overcoat. And in this case, also, the prudent will prepare themselves to encounter what they cannot prevent.
James Russell Lowell, Democracy, in 7 LITERARY AND POLITICAL ADDRESSES 1, 14 (Houghton Mifflin Co., Boston 1975) (1886).
We should reverse the Commissioner’s decision to deny Aetna the opportunity to insulate itself against future loss by means commonly used in commerce and industry. I would broaden the scope of our remand to require the Commissioner, with such reasonable safeguards as he deems appropriate, to include this factor in determining Aetna’s automobile premium rates.