Court Opinion

ID: 8202701
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:40:05.912087+00
Date Added: 2024-06-11T16:40:59.496881
License: Public Domain

SNYDER, J.
(dissenting). Because I disagree that Becker may require State Farm to continue an insurance policy that represents a prohibited insurance practice in Wisconsin, I respectfully dissent.
Becker purchased the State Farm Medicare Supplement Policy five months prior to the insurance commissioner promulgating an administrative rule prohibiting more than one Medicare supplemental policy or certificate being sold to a Wisconsin Medicare insured. Accordingly, State Farm advised Becker that it was canceling his State Farm Medicare Supplement Policy because the policy was in addition to existing Snap-On coverage and amounted to "overinsurance," the very abuse sought to be addressed by the insurance *716commissioner's rule. Becker responded that even if such coverage was now prohibited, his State Farm supplemental coverage is protected by the insurance contract renewal provision.
The general rule is that statutes operate prospectively and should never be construed as having a retrospective effect on the provisions of an existing contract of insurance unless the terms of the statute clearly show a legislative intent that the statute operate retrospectively. See 1 GEORGE J. COUCH, CYCLOPEDIA of Insurance Law 2D § 13:15, at 840-41 (rev. ed. 1984). State Farm does not contest Becker's enforcement of the insurance contract through a renewal date following the effective date of the administrative rule. State Farm maintains that renewing the contract beyond that renewal date is in violation of the prospective effect of the administrative rule.
The issue is whether Becker's contract rights survive the insurance commissioner's prohibited practice rule. Becker concedes that the State Farm policy duplicates coverage provided in the Snap-On plan but wishes to retain the State Farm coverage to obtain additional prescription drug reimbursements.1 The trial court held that State Farm had the right to terminate the coverage.2
By promulgating the administrative rule, the insurance commissioner preempted persons in Wisconsin from contracting for more than one Medicare *717supplemental coverage after August 1, 1990.3 Where a provision is required by law (statute or administrative rule), it is mandatory and obligatory on the insured as well as the insurer. Jones v. Preferred Accident Ins. Co., 226 Wis. 423, 425-26, 275 N.W. 897, 898 (1938). Where there is an applicable rule of law, the legislature has declared:
the public policy of the state to be that that which had theretofore been subject to contract between the parties shall hereafter be by certain prescribed forms and with specific conditions concerning the respective rights and duties of the parties thereto, the statutory provisions step in and control and regulate the mutual rights and obligations rather than the provisions of any contract the parties may attempt to make varying therefrom.
Id. at 426, 275 N.W. at 898 (quoting Williams v. Travelers Ins. Co., 168 Wis. 456, 462, 169 N.W. 609, 610-11 (1919)). "When the legislative will is expressed in the peremptory terms of a statute, it 'is paramount and absolute, and cannot be varied or waived by the private conventions of the parties.'" Id. at 426, 275 N.W. at 898-99 (citations omitted). That holding resolves the conflict between an insured's contract rights surviving the prospective application of an administrative code prohibition.
*718Whether or not we agree with government intervention, for whatever purpose, into a citizen's right to handle his or her own affairs, once government does intrude we must adhere to the rule of law. Becker is clearly a member of the class of persons (Wisconsin Medicare recipients) intended to be protected from excessive Medicare supplemental coverage by the limitation to just one supplemental coverage. Becker desires an exemption from the class protection from such potential abuse and excess.4 However, Becker cannot pursue contractual rights that are contrary to the prevailing law.
In order to preserve Becker's access to the prohibited Medicare supplemental coverage, my colleagues apply contract law. After holding that Becker retains his right to continue a prohibited policy because it was not prohibited at the insurance contract's inception, they apply contract principles that would look to the intent of the parties. The intentions of the parties are irrelevant to the continuance of a prohibited contract. It is not a matter of reading "[a]ny sale" to mean "[a]ny future sale" in order to return to the insurance contract and shield Becker from the effects of the code prohibition.
In its amicus curiae brief, the Elder Law Center argues that "[a] decision adverse to Mr. Becker could seriously disrupt the present coverage of many other retired employees." That may be true, but that argu*719ment must be made to the insurance commissioner. The insurance commissioner created the administrative rule to protect Becker and "the many other retired employees" from coverage excesses and abuses. We cannot assume that the insurance commissioner failed to consider the loss of the Medicare recipients' individual insurance contract rights that would attend the application of the administrative rule.
In sum, Becker's problem is with the insurance commissioner, not with State Farm or the judiciary. In order to do business in Wisconsin, State Farm is obligated to avoid prohibited insurance practices. A prohibited insurance practice cannot be varied or waived by either Becker or State Farm based upon contract law or a past contractual relationship.
I would affirm the trial court.

 Becker paid a $1590.60 annual premium and a $10 membership fee for the State Farm Supplement Policy coverage.

 The trial court's order read: "That at all times material hereto, State Farm Mutual Automobile Insurance Company had the right to refuse renewal of the policy in question with said right to refuse renewal effective as of March 13, 1991." March 13,1991 was the policy renewal date.

 I am bemused'by the amicus curiae position of the insurance commissioner that the administrative rule applies only to an insurer. The commissioner maintains that if an insurer violates the rule, it is subject to civil forfeitures and other penalties, but that the rule does not apply to void the contractual rights of the insured (whom it is intended to protect) from entering into contracts with an insurer for duplicative coverage. It was less confusing when "prohibited" meant "prohibited."

 Whether Becker's reasons for wanting the State Farm coverage are meritorious is moot. In effect, the insurance commissioner has decided that one additional policy to supplement Medicare is enough to meet the needs of Medicare recipients, that such a restriction is good public policy, and that the insurance industry can meet the needs of Medicare recipients with just one additional coverage.