Court Opinion

ID: 9628057
Source: CourtListenerOpinion
Date Created: 2023-08-22 09:06:22.43158+00
Date Added: 2024-06-11T09:06:38.062302
License: Public Domain

McCLINTOCK, Justice, Retired,
dissenting, in which RAPER, Justice, joins.
I disagree with the majority’s handling of this case. They impose upon the Insurance Commissioner the requirement that he take into consideration certain “value factors” which attach to utilization of mortgage guaranty insurance. What this boils down to is that the Commissioner, when reviewing rate structures, must evaluate, consider, and weigh the benefit the citizenry of this state receives from the availability of the insurance against the inequities in the proposed rate structure. Accordingly, if the withdrawal of the insurance carrier from the state (the assumption is made no other carrier would step forward and replace the departing carrier) would be to the state’s detriment, then presumably the majority imposes the duty upon the Commissioner to approve the rate structure. The Commissioner must decide whether the state is *521better off with the insurance in the proposed package or without it altogether.
This approach is clearly legislative. This is obvious from the failure of the opinion to cite authority supporting the imposition of this requirement. The majority says that “[t]he Commissioner should consider relevant factors other than specified factors enumerated in a statute. * * *” From that the majority makes the quantum leap that these “value factors,” a phrase manufactured from thin air, are relevant to the question of whether the rates are “excessive, inadequate or unfairly discriminatory.” Section 26-14-105(a)(iv), W.S.1977.
The majority’s discussion of the state’s need for mortgage insurance belies the judicial cloak worn by them. Clearly the opinion is the product of a legislative concern that if the Commissioner is allowed to revoke the rate structure, the insurance carriers may in fact withdraw from the state and hurt the housing industry. It is often difficult for a court to operate in a vacuum, to consider only the law, and sometimes when questions are otherwise too close to call, public policy should be considered. But here where the law is clear or at least had been clear (in no other case arising from actions taken by either the Insurance Commissioner or the Public Service Commission has the court found that these “value factors” must be considered, though now it would appear that they must since these factors have been ruled relevant to questions concerning whether rates are excessive, inadequate, or unfairly discriminatory) the court has, out of fear that the legislature unwisely granted the Insurance Commissioner too much power, in effect enacted an amendment to the Wyoming statutes imposing upon the Commissioner the duty to consider these “value factors.”
Of course, the majority did include the disclaimer that “the Commissioner might conclude that the value was nil. * * *” But after several pages of the court saying that the value was not nil, what does that sentence mean? It means that if the Insurance Commissioner does find the “value factors” to be nil, the case will be up here again as will all other cases in which the Commissioner rejects a rate structure and discounts the “value factors” as minimal. It will soon be our task to determine what these “value factors” are worth, and whether the Commissioner adequately considered them and we will be in the insurance regulation business.
Not only do I believe that the rationale for the majority’s reversal was erroneous, but I also am convinced that these cases should be affirmed. Accordingly, I will address several issues not reached by the majority.
The loss experience of the entire mortgage guaranty industry for the last decade has been approximately 20 percent of premiums earned. MGIC, which writes over 40 percent of all mortgage guaranty business, has earned some $323,000,000 in premiums on a nationwide basis since 1971 and has incurred losses of some $63,000,000 amounting to a nationwide 19.75 percent loss ratio. Verex has experienced a nationwide loss ratio of 21.60 percent loss ratio for the past six years. MGIC and other companies did incur heavier than normal losses in 1974 and 1975, probably because of the nationwide recession. Losses in 1976 and 1977, however, declined significantly from the two previous years.
Since 1971 all mortgage insurers doing business in Wyoming have issued some 6,700 policies insuring $188,000,000 in Wyoming loans. These companies have earned premiums from those policies totalling $1,700,000. During this time only two claims have been paid in the state: In 1971 a claim was paid for $2,000 and in 1973 another claim was paid for $5,000. MGIC has had a loss ratio of .67 percent for the last six years in this state and Verex has had a loss ratio of .61 percent for that same period. This compares with the average loss ratio of .58 percent for all of the mortgage guaranty insurers transacting business within the state. The Commissioner has “noted that these rather modest losses were incurred during the greatest period of nationwide economic turbulence (1971-1976) in the last forty years.”
*522Other Rocky Mountain states have also experienced significantly lower losses than states located in other areas of the country. The total loss ratio experience during the years 1971 through 1976 in all of the states for all of the companies licensed to do business in Wyoming varies from a high of 58.5 percent in Georgia to a low of .58 percent in Wyoming. Other states having high ratios are Arizona, 48.6 percent; Florida, 35.02 percent; Mississippi, 32 percent; Nevada, 48.96 percent; New Jersey, 41.36 percent; and New York, 47.18 percent. Other states having a low ratio are Alaska, 2.16 percent; Hawaii, 3.8 percent; Montana, 3.84 percent; New Mexico, 3.19 percent; and South Dakota, 8.01 percent. Ratios for other states in this geographical region are Colorado, 17.45 percent; Idaho, 5.03 percent; Nebraska, 8.31 percent; North Dakota, 9.8 percent; and Utah, 7.89 percent.
THE COMMISSIONER’S DECISION AND THE ATTACK THEREON
Despite this wide variation in the average loss ratios experienced by the companies in the different states, none of the companies doing business in Wyoming has differentiated its rates between the areas of greatest and lowest losses.1 This lack of differentiation was the principal focus of the Commissioner’s rejection of the rates. In his order of October 4, 1977, which substantially repeated his order of May 6, 1977, he held:
“* * * [T]he premium rate schedule utilized by the Respondent in the State of Wyoming is excessive; and
“* * * the benefits provided by the Respondent to Wyoming property owners are unreasonable in relation to the premium charged; and
“* * * the failure of the Respondent to differentiate its premium rate schedules between those areas of the country which have produced the greatest losses and those areas of the country, such as Wyoming, which have incurred the fewest losses, discriminates unfairly against premium-paying Wyoming residents; * * *”
The Commissioner also held the rates objectionable on other grounds:
“* * * [T]he assessment of a first year premium which is disproportionate to the risk being assumed and the assessment of the same renewal premium for each and every year in which coverage is continued is unfairly discriminatory against premium-paying Wyoming residents; and
“* * * the premium assessed by the Respondent is not reasonable in relation to the benefits provided to premium-paying Wyoming residents, when the principal balance of the loan decreases to the point where the appraised value of the property exceeds the principal balance of the loan by twenty-five percent; and
“* * * the practice of providing that all premiums received become fully earned upon payment of a claim is in violation of law; and
“* * * the minimum premium retention of $50 by the Respondent on certificates cancelled during the first year of coverage is excessive and unreasonable;”
On the basis of his findings and conclusions, the Commissioner ordered withdrawn the previous approval of the two companies’ rate schedules and policy forms, effective as of June 6,1977.2 After consideration of the record of the hearings before the Commissioner and briefs of the parties, the district court affirmed the decisions of the Commissioner, except that retroactive operation of the order of October 4 to June 6 was eliminated, as were directions in both orders that the companies file new rates. At no time *523did the Commissioner attempt to fix the rates that should be charged. His orders contained an extensive discussion of the issues in the case, and the district court generally found that the orders were not objectionable under the provisions of § 9-4-114(c), W.S.1977,3 relating to the scope of judicial review of administrative orders.
MGIC sets forth three propositions which it believes require setting aside the Commissioner’s order: (1) that MGIC was not afforded substantive or procedural due process; (2) the Commissioner’s actions are based on an overbroad delegation of legislative authority, either improperly assumed by the Commissioner or unconstitutionally granted by the legislature; and (3) the Commissioner’s order imposes an unacceptable burden on interstate commerce.
Verex states five main propositions with eight subpropositions. It contends: (1) that failure of the Commissioner to adduce evidence of excessive profits resulted in action that was violative of due process; (2) that to limit the underwriting pool to Wyoming is violative of due process and the supremacy clause of the federal constitution; (3) that because of lack of specificity of the applicable statute, it represents an unlawful delegation of legislative power; (4) when statutes are vague, due process requires the agency to promulgate standards to insure fairness; and (5) that the action of the Commissioner must be set aside for want of proper notice in the initiation of the proceedings.
I am satisfied with the majority’s treatment of the procedural due process and burden of proof questions. However, I believe the following issues need to be addressed.
1. Do the applicable statutes set up proper standards so that there has not been an improper delegation of the legislative power; and if so, has the Commissioner exceeded the powers delegated to him?
2. Was there substantive due process?
3. Do the Commissioner’s actions in these cases impose an unacceptable burden on interstate commerce?
4.Miscellaneous.
I
EXISTENCE OF PROPER STANDARDS
As has been previously pointed out, § 26-15-113(a)(v), W.S.1977, permits disapproval of policy forms if the “rates or classification are excessive, inadequate or unfairly discriminatory.” However, this section is not the only one pertaining to the review of rates. Chapter 14 of Title 26, entitled “Rates and Rating Organizations,” sets forth the factors which shall be considered by the Commissioner in his review of rates. I find no conflict in the two chapters and consider Chapter 14 as pertinent to any review, whether it be made at the time of the original submission of rates or in connection with some inquiry requested by a citizen or on the Commissioner’s own motion. The first section of Chapter 14, § 26-14-101, W.S.1977, declares the purpose of the chapter to be “to promote the public welfare by regulating insurance rates to the end that they shall not be excessive, inadequate or unfairly discriminatory * * Section 26-14-105(a), W.S.1977, then directs:
“(a) All rates as to casualty and surety insurance shall be made in accordance with the following provisions:
“(i) Due consideration shall be given to past and prospective loss experience within and outside this state, to catastrophe hazards, if any, to a reasonable margin for underwriting profit, to past and prospective expenses both countrywide and those specially applicable to this state, and in the case of participating insurers to policyholders’ dividends, savings or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members or subscribers;
“(ii) The systems of expense provisions included in the rates for use by any insurer or group of insurers may differ *524from those of other insurers or groups of insurers to reflect the requirements of the operating methods of any such insurer or group with respect to any kind of insurance, or with respect to any subdivision or combination of insurances for which subdivision or combination separate expense provisions are applicable;
“(iii) Risks may be grouped by classifications for the establishment of rates and minimum premiums. Classification rates may be modified to produce rates for individual risks in accordance with rating plans which establish standards for measuring variations in hazards or expense provisions, or both. Such standards may measure any difference among risks that can be demonstrated to have a probable effect upon losses or expenses;
“(iv) Rates shall not be excessive, inadequate or unfairly discriminatory.” (Emphasis added.)
Appellants argue at some length that these statutes constitute an improper delegation of power from the legislature to the Commissioner. MGIC cites, among other cases, Montana Milk Control Board v. Reh-berg, 141 Mont. 149, 376 P.2d 508, 515 (1962), where it is said that:
“* * * If the legislature fails to prescribe with reasonable clarity the limits of power delegated to an administrative agency, or if those limits are too broad, its attempt to delegate is a nullity.”
Verex appears to recognize that some omissions in detail in the delegating statute may be filled in by the administration agency, citing Fook Hong Mak v. Immigration and Naturalization Service, 435 F.2d 728, 730 (2nd Cir. 1970). There it is said that where the legislative body has delegated discretionary power without meaningful standards, the “ * * administrators should develop standards at the earliest feasible time, and then, as circumstances permit, should further confine their own discretion through principles and rules.’ ” Both appellants contend that essential standards were not prescribed by the statute or rule or regulation of the Insurance Commissioner to act as guides in determining whether proposed insurance rates were “excessive, inadequate or unfairly discriminatory.” The Commissioner contends that the terms used do provide a workable standard that can be applied in the examination of any insurance company’s proposed rates.
The question of whether standards should be established through prior rule or regulation or through ad hoc adjudication in the course of consideration of specific problems is not an easy one. I do not believe that this court should attempt to establish any general rule. In New Hampshire-Vermont Physician Service v. Durkin, 113 N.H. 717, 313 A.2d 416, 420 (1973), the insurance commissioner had notified interested companies that he intended to review matters affecting rate levels and afforded them an opportunity to be heard. The court observed:
“* * * The fact that he proceeded in an adjudicatory rather than rule making context is irrelevant to the validity of the order in that the Supreme Court has endorsed an agency’s choice of the former ad hoc approach under circumstances where it ‘may not have had sufficient experience with a particular problem to warrant rigidifying its tentative judgment into a hard and fast rule.’ SEC v. Chenery Corp., 332 U.S. 194, 202, 67 S.Ct. 1575, [1580], 91 L.Ed. 1995 (1947); 1 F. Cooper, State Administrative Law 181-83 (1965); Shapiro, Rule Making as Adjudication,[4] 78 Harv.L.Rev. 921, 926-29 (1965). In this case the commissioner reduced the size of the contingency fund in degrees in order to gather experience data as to the effect of the reduction on the financial condition of Blue Shield. The decision to proceed in this ad hoc fashion lies within his administrative discretion. SEC v. Chenery Corp., supra; 1 F. Cooper, State Administrative Law 180-81 (1965).”
*525Without foreclosing the possibility that in certain types of cases the establishment of guidelines by rule or regulation may be proper and desirable, I am of the opinion that no such standards could be previously promulgated as to what rates would be excessive, inadequate or unfairly discriminatory. Such determinations by an insurance commissioner must proceed and be reviewed on an ad hoc basis. If there was indeed a necessity for the Commissioner by rule or regulation to establish special standards by which to weigh each insurance company’s rate schedule, it has been neglected throughout the history of insurance regulation in the state of Wyoming. I can find no indication that insurance commissioners have adopted such rules or regulations as to any type of insurance sold in this state, yet it appears that companies have uniformly submitted their rate schedules which have been approved or disapproved by the commissioner of insurance. Our statute appears to be virtually identical with regulatory statutes of many other states. Appellants have cited, and I have found, no cases from other jurisdictions holding that an insurance commissioner was required to adopt rules and regulations more specifically defining the terms in question. This seems to me to indicate that, at least in fields of insurance other than mortgage guaranty insurance, there has been no difficulty in applying the requirements of the statute that the rates not be “excessive, inadequate or unfairly discriminatory” to the facts of each proposed rate schedule.
State ex rel. Wisconsin Inspection Bureau v. Whitman, 196 Wis. 472, 220 N.W. 929 (1928), is pertinent authority to the question whether there has been an improper delegation of power. The questions there considered related both to the constitutionality of the Wisconsin rating law and the powers of the commissioner under that act. The act required each insurance rating bureau to file with the commissioner copies of its articles and by-laws, agreements with members, and its rules and regulations. It also provided that no company should fix a rate “which is unreasonable * * * or which discriminates unfairly between risks of essentially the same hazard and having substantially the same degree of protection * * *” and further that:
“The commissioner of insurance shall have power, upon the written complaint of any person having a direct financial interest, or upon his own motion, to review any rate fixed by a bureau or insurer for insurance upon any risk or classification in this state, for the purpose of determining whether the same is unreasonable or discriminatory. * * ” 220 N.W. at 931.
The statute gave the commissioner the power, if he found the rate discriminatory, to remove the discrimination, and if he found it unreasonable, to establish a reasonable rate.
The act was challenged in its entirety upon two grounds:
“* * * First, that it constitutes an unlawful delegation of legislative power; second, that, if it is held to be a delegation of legislative power, the statute erects no standard in accordance with which the discretion of the commissioner of insurance is to be exercised, and vests in him an arbitrary power.” 220 N.W. at 936.
The court considered the general power of the legislature to delegate authority and also two questions raised by the rating bureau which appear particularly pertinent to the present case:
«* * * 2. Lacking a sufficiently definite standard, there is a denial of due process and also an unlawful delegation of legislative power. 3. Is the test of reasonableness a sufficiently definite standard as applied to insurance rates? * * *” 220 N.W. at 932.
In response to the question of lack of proper standards as to the rules which could be adopted, the court said:
“* * * Considering the nature of the subject-matter dealt with, it is quite apparent that any attempt on the part of the Legislature to prescribe a standard would result in effect in a prescription of the *526rules and regulations themselves; in other words, the subject-matter does not admit of the application of any except the most general standards. * * *” 220 N.W. at 942.
It then went on to show why the delegation of power was not unreasonable:
“While the statute does not in terms provide that the commissioner of insurance shall exercise a sound and reasonable discretion in the disapproval of proposed rules and regulations, that condition is necessarily implied. As has been said many times, in many cases administrative officers or bodies must act, not only within the field of their statutory powers, but in a reasonable and orderly manner. * *” Id. at 942-943.
In making the foregoing statements, the court was considering the general power of the commissioner to adopt rules and regulations but it then proceeded to consider the question of rates review and approval. While the court does not again refer specifically to the question of delegability, it does say:
“* * * The Legislature may undoubtedly vest in the commissioner of insurance power to determine whether rates are unreasonable and discriminatory, and, if he shall find them to be unreasonable and discriminatory, power to establish a reasonable rate.[5] In the case cited, the language of the statute sustained was as broad and indefinite as is the language of the statute in this case. * * *” (Footnote omitted.) Id. at 944.
The court then went on to establish the limitations upon the power of the commissioner, who had taken the action he did sometime after a hearing had been held and, as indicated in his decision, without real analysis of the evidence that had been presented in the course of that hearing. The court said:
“* * * The power conferred by the statute must be exercised, however, in accordance with established principles of law. In assuming that he might exercise the power to set aside and fix rates, conferred by the section arbitrarily without a hearing, it is considered that the commissioner of insurance placed an interpretation upon the language of the act which is not at all warranted either by the purpose of the act or by its language. If the act be upheld as interpreted by the commissioner of insurance it confers upon him managerial power rather than the power to regulate. * * *” Id. at 944.
Finally, the court ruled that it was necessary for the commissioner to hold a hearing, receive evidence from both sides and find the facts as established therein. As that court observed:
“The matter of what constitutes a just and reasonable rate for services rendered and risks assumed by insurance carriers is a very difficult, complex and complicated one. In his findings the commissioner of insurance ought to point out for what reasons and in what respects a particular rate is unreasonable or discriminatory. * * *” Id. at 945.
I have already indicated my failure to find any insurance cases holding that the legislative direction to the Insurance Commissioner to determine whether the rates were excessive, inadequate or unfairly discriminatory represented an improper delegation of power because of lack of standards. Other jurisdictions, without discussion of the necessity for standards, have not hesitated to pass upon the actions of the commissioner in his review of insurance rates. The following is not intended to be an exhaustive analysis of all the cases, but in Insurance Services Office v. Whaland, 117 N.H. 712, 378 A.2d 743 (1977), the Supreme Court of New Hampshire carefully and exhaustively reviewed the action of the *527commissioner and dismissed the appeal. It is notable that the statute therein involved, setting forth the factors to be considered by the commissioner, is in all essential respects virtually identical with § 26-14-105(a)(i) and (iv), W.S.1977. In Massachusetts Medical Service v. Commissioner of Insurance, 344 Mass. 335, 182 N.E.2d 298 (1962), the court had no difficulty in reviewing the commissioner’s action under a statute which proscribed rates which were “excessive, inadequate or unfairly discriminatory.” The same is true of Long v. National Bureau of Casualty Underwriters, 209 Tenn. 435, 354 S.W.2d 255 (1961), reh. denied (1962). In the Massachusetts case the commissioner was reversed and the cause remanded to him. In the Tennessee case he was sustained.
Thirty years after its decision in Whitman, the Supreme Court of Wisconsin, in Fire Insurance Rating Bureau v. Rogan, 4 Wis.2d 558, 91 N.W.2d 372, 377 (1958), had before it a statute which permitted the commissioner to disapprove “excessive, inadequate or unfairly discriminatory” rates (these are the same factors that- are listed in § 26-14-105(a), supra). The court did not discuss the question of delegability but merely ruled that while it was not the province of the commissioner or the court to fix the proper rates, “the commissioner was justified in determining that the proposed rates as filed did not meet the requirements of the statute. * * *”
I would therefore reject appellants’ contentions that the insurance act delegates power to the Commissioner to pass upon rates without providing proper standards for his decision. Having reached that conclusion, I would also conclude that the Commissioner did not act in excess of the powers properly vested in him under the statute to determine whether the rates are reasonable. Whether this determination is legally sustainable presents another question which I shall subsequently address.
II
SUBSTANTIVE DUE PROCESS
Counsel for Verex state as one of their arguments that “[t]o limit the underwriting risk pool to Wyoming is arbitrary, violative of equal protection and due process * * Counsel for MGIC states that “[sjubstantive due process guarantees that property will not be taken for arbitrary reasons * * *” and contends that:
“* * * [Cjommon sense as well as legalistic reading of the record in this proceeding dictate the conclusion that the cumulative impact of the Commissioner’s actions and conduct deprived MGIC of its legally protected due process rights.”
It is said in 16A Am.Jur.2d, Constitutional Law, § 807, at pp. 958-959, that “[d]ue process is an elusive concept; its exact boundaries are undefinable, and its content varies according to specific factual contexts. * * *” There appear to be two types of due process, procedural and substantive. Procedural due process “relates to the requisite characteristics of proceedings looking toward a deprivation of life, liberty, or property. * * *” Id., § 813, p. 967. This means, according to the test, that there must be notice, opportunity to defend, and the deprivation must be resolved in a manner consistent with essential fairness. But the whole concept of due process:
“* * * reaches those situations where the deprivation of life, liberty, or property is accomplished by legislation which, by operating in the future, can, given even the fairest procedure in application to individuals, destroy the enjoyment of all three. Substantive due process may be roughly defined as the constitutional guaranty that no person shall be deprived of his life, liberty, or property for arbitrary reasons, such a deprivation being constitutionally supportable only if the conduct from which the deprivation flows is proscribed by reasonable legislation (that is, legislation the enactment of which is within the scope of the legislative authority) reasonably applied (that is, for a purpose consonant with the purpose of the legislation itself). * * *
“It has been said that protection from arbitrary action is the essence of substan*528tive due process, and similarly, that, in substantive law, due process may be characterized as a standard of reasonableness, which is similar to the standard or test of ‘rational grounds ’ used in determining a claim of unequal protection of the laws. * * *” (Footnotes omitted and all emphasis added.) Id., § 816, pp. 978-979.
The key words in all this are “arbitrary” and “reasonable” and the fact that compliance with even the fairest procedure will not save the legislation or administrative action if it is in other respects arbitrary or unreasonable should not be forgotten.
While I have previously indicated my agreement with the majority that the essential requirements of procedural due process have been complied with, I still must consider whether there has been reasonable legislation, reasonably applied. Appellants do not contend that their business is one that should be free of all restraint;6 they appear to concede their amenability to Wisconsin law although from much of the presentation it would appear that they might prefer regulation under federal law. The question, then, is upon what basis is regulation by the state of Wyoming conditioning the insurance companies’ right to do business in this state upon approval of their rate structure to be considered an arbitrary exercise of power outside the scope of proper legislative action? I have found none; such a theory would seemingly be contrary to the whole concept of regulation of insurance companies by the states in which they do business.
While appellants seek the right to do business in Wyoming, they deny the right of this state to impose any regulation or control upon their activities. I find nothing in the nature of the mortgage guaranty business that justifies a lack of local regulation. The purpose of the legislation conditioning an insurance company’s right to do business within the state upon the requirement that their rates be approved as reasonable by the legislative delegate, the Insurance Commissioner, is obviously to protect Wyoming citizens from excessive or unfairly discriminatory rates. Such purpose is legislatively proper. The statute here effecting that purpose is not arbitrary and does not deprive appellants of property without due process of law.
Given the power of the legislature to regulate these companies and given the proper grant of that supervisory power to the Insurance Commissioner, the question left is whether the Commissioner has sought reasonably to protect the rights of Wyoming citizens as directed by the legislature. That is, has he acted with a purpose consonant with the purpose of the legislature? In considering this question, I must note the frequently announced principles which govern this court’s review of the validity of delegated administrative action. As was stated by this court when reviewing the state financial board’s actions in Stock-men’s Bank and Trust Company v. Financial Institutions Board, Wyo., 616 P.2d 1278, 1277 (1980):
“* * * The agency’s decision comes to this court wearing a presumption of legality and validity, and we may not substitute our judgment for that of the administrative body entrusted by the legislature to approve bank charters. [Citations.] [7] The burden is on the appellant to establish that the administrative agency has acted contrary to law. [Citations.] We cannot lightly disregard the credibility given witnesses by the administrative body. [Citation.] The Protestants are aware of and cite precedent of this court, with which we continue to agree, to the effect that when we examine the evidence to determine whether it is substantial enough to support a finding of fact, it *529must be of such relevancy as a reasonable mind might accept as adequate to support a conclusion. * * *”
Cases more specifically in point from other jurisdictions involving statutes virtually identical with our § 26-14-105(a), W.S.1977, include Pack v. Royal-Globe Insurance Companies, 224 Tenn. 452, 457 S.W.2d 19 (1970), where the court, quoting from the earlier case of Long- v. National Bureau of Casualty Underwriters, supra, 354 S.W.2d at 259, said this:
“ ‘If the Commissioner reached his decision from a consideration of the specified factors enumerated in the Statute, and from other relevant factors, we cannot substitute our judgment and vacate his decision. [Citations.]’ ”
Similarly, the Supreme Court of New Hampshire, in Insurance Services Office v. Whaland, supra, 378 A.2d at 746, had this to say:
“At the outset we note that rate-making is a technical and highly complex process requiring much expertise. * * *
“Rate-making is not a judicial function. 1 R. Anderson, Couch on Insurance § 21:38 (2d ed.1959). Due to its complexity as well as to the determination of the legislature, rate-making is left to the discretion of the insurance commissioner who is a specialist in the field and upon whose expertise we must rely. [Citations.] Due to the expertise required in the field, courts should be reluctant to substitute their judgment for that of the commissioner. * * *”
The repeated requirement of our statute that the Commissioner examine suggested rates of all casualty insurance companies, not excepting mortgage guaranty companies, is that the rates shall not be excessive, inadequate or unfairly discriminatory. Our statute, as do the statutes of many other states, requires that the Commissioner consider past and prospective losses “within and outside this state” and its purpose can only be to protect Wyoming residents against paying an unfair share of the premium burden of any company doing business in this and other states. In Insurance Services Office, supra, one of the paramount disputes concerned the use of national figures as opposed to state figures. The court said:
“The commissioner’s written decision reveals that his primary reason for denial of the rate increase is plaintiff’s use of countrywide indices and statistics in support of its filing as opposed to data specifically relating to New Hampshire. The commissioner therefore determined that plaintiff’s exhibits and expert testimony failed to support its requested rate relief. * * *” 378 A.2d at 743.
The principal findings of the Commissioner that are attacked in this proceeding are that the premium rate schedules of each appellant used in Wyoming are “excessive * * * the benefits provided by the Respondent to Wyoming property owners are unreasonable in relation to the premium charged * * *” and that:
“* * * [T]he failure of the Respondent to differentiate its premium rate schedules between those areas of the country which have produced the greatest losses and those areas of the country, such as Wyoming, which have incurred the fewest losses, discriminates unfairly against premium-paying Wyoming residents * * *.”
If in Wyoming the loss ratio upon mortgage guaranty insurance is .58 percent and in Arizona it is 48.60 percent, it necessarily follows that the Wyoming premiums are going to support the Arizona losses. Simplistic reasoning would then require the conclusion that there is a discrimination between the Wyoming and the Arizona mortgagors who must pay those premiums. When the national average loss ratio is 19.-75 percent and Wyoming’s is .58 percent, it is reasonable to conclude that Wyoming premiums are helping to keep the rates in other states lower than the losses therein. The Wyoming legislature has not indicated that Wyoming should become a part of a national pool for the purpose of underwriting these mortgage guaranty losses. Economists and insurance experts might disagree with this act of self-interest, but the Constitution and pertinent legislation do *530not vest this court with the power to pass upon what is the best or the most equitable system. The question of what conditions are to be imposed in doing business in Wyoming is for the legislature. I have already said that the power to pass upon rates was properly delegated to the Commissioner and he is to determine whether proposed rates are excessive, inadequate or unfairly discriminatory. Our statute, like that of many states, requires the Commissioner to consider the past and prospective experience within and outside the state. He has done just that, and we cannot say that it was arbitrary action on his part to find discrimination as against Wyoming citizens in the rates imposed by the two companies. I therefore would hold that he has acted in a constitutionally permissible way and his actions have not violated substantive due process.
Ill
BURDEN ON INTERSTATE COMMERCE
For some 74 years, beginning with the decision of the United States Supreme Court in Paul v. Virginia, 75 U.S. (8 Wall.) 168, 19 L.Ed. 357 (1869), it appears to have been considered that the issuance of insurance contracts did not involve interstate commerce, and the regulation of the industry was left to the states. The federal attitude changed somewhat in 1962 and we can summarize that change and the subsequent effect no better than was done by Mr. Justice Douglas in State Board of Insurance v. Todd Shipyards Corporation, 370 U.S. 451, 452, 82 S.Ct. 1380, 1381, 8 L.Ed.2d 620, 622 (1962):
“When we held in United States v. SouthEastern Underwriters Asso., 322 U.S. 533, 64 S.Ct. 1162, 88 L.Ed. 1440 [(1944)], that the modern business of insurance was ‘interstate commerce,’ we put it in a category which Congress could regulate and which, if our prior decisions controlled, could not in some respects be regulated by the States, even in absence of federal regulation. See Frankfurter, The Commerce Clause (1937); Rutledge, a Declaration of Legal Faith (1947).
“Congress promptly passed the McCar-ran-Ferguson Act, 59 Stat. 33, 15 U.S.C. § 1011, which provided that the regulation and taxation of insurance should be left to the States, without restriction by reason of the Commerce Clause. Subsequently, by force of the McCarran-Fergu-son Act, we upheld the continued taxation and regulation by the states of interstate insurance transactions. Prudential Ins. Co. v. Benjamin, 328 U.S. 408, 66 S.Ct. 1142, 90 L.Ed. 1342, 164 A.L.R. 476 [(1946)].” (Footnote omitted.)
As is also pointed out in Todd Shipyards Corporation, prior to the South-Eastern decision the Federal Supreme Court had given broad scope to local regulation of the insurance business, citing Osborn v. Ozlin, 310 U.S. 53, 60 S.Ct. 758, 84 L.Ed. 1074 (1940); and Hoopeston Canning Company v. Cullen, 318 U.S. 313, 63 S.Ct. 602, 87 L.Ed. 777 (1943). In both of these cases the insurance company had carried on activities within the state seeking to regulate it. Also mentioned in Todd Shipyards Corporation are three cases holding that a particular company, under the specific facts relating to the manner in which it had operated, was not subject to regulation: Allgeyer v. Louisiana, 165 U.S. 578, 17 S.Ct. 427, 41 L.Ed. 832 (1897); St. Louis Cotton Compress Company v. Arkansas, 260 U.S. 346, 43 S.Ct. 125, 67 L.Ed. 297 (1922); Connecticut General Life Insurance Company v. Johnson, 303 U.S. 77, 58 S.Ct. 436, 82 L.Ed. 673 (1938). In each of these three cases the only contact of the insurance company with the state which was seeking to regulate was that the property insured was within that state. All transactions concerning the issuance of the insurance had been conducted outside that state. In each case the court held that the company was protected by the due process clause of the Fourteenth Amendment to the Federal Constitution from amenability to that state in which the insured property was located. Todd Shipyards Corporation presented a similar situation, that is, the insured property was in Texas but the insurance had been negotiated and paid for *531outside that state, the policies were issued in another state, and the losses were adjusted and paid outside the state. The case was considered in light of Congress’ previous adoption of the McCarran-Ferguson Act, but after analysis of the legislative history of that act the court held that the business was not subject to regulation in the state where the property was regulated, saying:
“So, while Congress provided in 15 U.S.C. § 1012(a) that the insurance business ‘shall be subject to the laws of the several States which relate to the regulation or taxation of such business,’ it indicated without ambiguity that such state ‘regulation or taxation’ should be kept within the limits set by Allgeyer, St. Louis Cotton Compress, and Connecticut General Life Insurance decisions.
* * * * * *
“The power of Congress to grant protection to interstate commerce against state regulation or taxation [citations] or to withhold it [citations] is so complete that its ideas of policy should prevail.” (Footnotes omitted.) 370 U.S. at 456, 82 S.Ct. at 1383.
“* * * Here Congress tailored the new regulations for the insurance business with specific reference to our prior decisions. Since these earlier decisions are part of the arch on which the new structure rests, we refrain from disturbing them lest we change the design that Congress fashioned.” 370 U.S. at 458, 82 S.Ct. at 1385.
I must emphasize by repetition that the McCarran-Ferguson Act “provided that the regulation and taxation of insurance should be left to the States without restriction by reason of the Commerce Clause. * * *” 370 U.S. at 452, 82 S.Ct. at 1381.
The principles I find in these decisions are that, despite the fact that the business of insurance is considered an interstate business of which the Congress of the United States has the power to assume sole jurisdiction over the regulation thereof, by the McCarran-Ferguson Act that jurisdiction has been ceded to the individual states in which a company may engage in business.8 Further, where a company actually operates a business within a state, the right of that state to regulate the way the company conducts business therein appears unquestioned.
Notwithstanding the fact that both appellants have qualified to do business within the state of Wyoming, have an agent therein, and solicit business therein, they contend that to subject them to regulation by the Wyoming Insurance Department is to impose an unconscionable burden upon interstate commerce. Principally cited as authority are the cases of Southern Pacific Co. v. Arizona ex rel. Sullivan, Attorney General, 325 U.S. 761, 65 S.Ct. 1515, 89 L.Ed. 1915 (1945), and Bibb v. Navajo Freight Lines, Inc., 359 U.S. 520, 79 S.Ct. 962, 3 L.Ed.2d 1003 (1959). In neither of those cases was there a specific congressional grant of supervisory power sought to be exercised by the state. Upon the facts of each case the imposition of the state laws was found to be a direct and material burden upon the interstate operations of the companies. In Southern Pacific Co. the court said that:
“* * * [Examination of all the relevant factors makes it plain that the state interest is outweighed by the interest of the nation in an adequate, economical and efficient railway transportation service, which must prevail.” 325 U.S. at 783-784, 65 S.Ct. at 1527.
In Bibb it is said that:
“* * * [T]he heavy burden which the Illinois mudguard law places on the interstate movement of trucks and trailers seems to us to pass the permissible limits even for safety regulations.” 359 U.S. at 530, 79 S.Ct. at 968.
Hundreds of pages in the transcript of the case at bar are consumed in evidence establishing that mortgage insurance has *532created an outside market for mortgages upon Wyoming properties. It is demonstrated that Wyoming is a capital-poor state and needs that outside money in order that its people be able to finance the homes in which they live. There is no doubt that the out-of-state investment in such mortgages is very substantial and of great benefit to our state, but it has not been shown that regulation of the companies providing such insurance, in the same manner and subject to the same restrictions under which other foreign insurance companies operate in Wyoming in other lines of insurance, will materially interfere with that operation. If the writing of the many other forms of insurance, conducted through local agents within the state of Wyoming, even though it may constitute interstate business, is nevertheless to be considered as subject to state regulation under permission of the McCarran-Ferguson Act, appellants have failed to convince me of any distinction in their business that renders them immune from such regulation.9
The activities of the appellants are relatively new. No authorities have been cited or found which directly support or deny their argument that they are immune to regulation by this state. That should not prevent a favorable conclusion if analysis and argument demonstrate that there are cogent reasons why they must be declared free of state regulation. Appellants have presented no such argument and I cannot conclude upon my own analysis of the case. I would not hold that the companies are exempted from regulation under the laws of Wyoming merely because the business in which they engage is interstate.
IV
MISCELLANEOUS
Neither party appears to attack the order of the Commissioner specifically on the grounds cited in § 9-4-114(c), supra, and Rule 12.09, W.R.A.P., setting the basis upon which administrative action will be reviewed. The Commissioner’s Conclusions 3 to 6 state objections to the rates as filed by the companies which have not been specifically attacked. Seemingly appellants object to them only as they come within the scope of allegedly improper state regulation. It is asserted frequently and at length throughout the briefs that the action of the Commissioner was arbitrary to the extent of constitutional invalidity. But I believe that the law was proper and that the Commissioner was within his delegated authority and properly proceeded in his determination that the rates were discriminatory. It is not this court’s task to judge the economic wisdom of his decision. We should not be considering the threats made by appellants that they will pull out of the state altogether if we don’t reverse. It is not our province to determine whether insurance of this kind should best be regulated on a national basis. The legislature imposed certain conditions for admission of any foreign insurance companies, including mortgage guaranty insurers, to do business within the state. The Commissioner has in good faith and on the basis of substantial evidence withdrawn his approval of the rate structure. If the law should be changed, that is for the legislature. As I said earlier, the majority’s ruling amounts to legislation.
Verex has individually complained that the Insurance Department failed to adduce evidence of excessive profits on its part. It claims that the department urged that Ve-rex’s profits were excessive because of recent low loss experience in Wyoming. While excessive profits could be a factor to be considered by the Commissioner in passing upon the validity of a company’s rate structure, I do not construe the Commissioner’s findings and conclusions as going to the question of profits. The contention *533that the Commissioner equates low loss experience with excessive profits is therefore based on an improper assumption. What the Commissioner was concerned with, as indicated throughout the many pages of testimony and exhibits, is that Wyoming mortgagors were being discriminated against because even though through some six years the loss ratio in Wyoming had been greatly lower than in many other states, those Wyoming mortgagors were paying the same premiums as the mortgagors in the high-loss states. This the Commissioner considered unfair and in violation of the principle of proportioning the cost of the insurance to the risk involved. I repeat that he has not attempted to fix the rates. I would not say that his decision was the only one that could have been entered. I merely say that it was authorized by law, that it was not arbitrary, and as was said in Fire Insurance Rating Bureau, supra, 91 N.W.2d at 377:
“* * * The ultimate determination of the commissioner is supported by substantial evidence in view of the entire record; he did not proceed in excess of his statutory authority; his determination and order was not arbitrary and capricious, and does not deprive the members and subscribers of the bureau of their property without due process of law.”

. This practice is quite different from other casualty insurance such as fire and automobile where the premiums will vary considerably as between different areas. Appellants, of course, claim that there are material differences between mortgage guaranty insurance and other forms of casualty insurance, the merits of which claim are material to our disposition of the appeal.

. This was the date upon which the Commissioner’s withdrawal of approval of Verex’s rates had been effective and the Commissioner was trying to place his treatment of MGIC and the other companies in line with that order. Retroactive effect of any order was eliminated by the district court and no objection thereto has been made.

. Revised in § 9-4-114(c), W.S.1977, Cum. Supp. 1981.

. The title of this very interesting article is more accurately “The Choice of Rulemaking or Adjudication in the Development of Administrative Policy.”

. Cited is German Alliance Insurance Company v. Lewis, 233 U.S. 389, 34 S.Ct. 612, 58 L.Ed. 1011, L.R.A. 1915C, 1189 (1918). As indicated in Fire Insurance Rating Bureau v. Rogan, infra, 4 Wis.2d 558, 91 N.W.2d 372 (1958), the insurance commissioner of that state no longer has the power to fix the rate. It is conceded in the case at bar that the Wyoming Commissioner’s power is limited only to approval or disapproval and the district court, without objection from the Commissioner, eliminated from his order a requirement that new rates be filed.

. We take it to be too well settled to require extensive citation of authority:
“* * * [T]hat the business of insurance is one that is affected with a public interest, and that it is a proper subject of regulation and control by the state by virtue of the exercise of its police power, in the interest of public convenience and the general good of the people. * * *” (Footnotes omitted.) 43 Am.Jur.2d, Insurance, § 52, pp. 108-109.

. The principles are equally applicable to agency action passing upon insurance filings and rates.

. I am aware that the concept of doing business within a state renders a foreign corporation more susceptible to exercise of jurisdiction bv that state has considerably expanded. This expansion would appear to me to strengthen the right of Wyoming to regulate the business which an insurance company conducts in Wyoming.

. The majority’s approach which imposes an obligation upon the Commissioner to consider the state’s need for the insurance carrier leaves me with one question: Does this requirement apply across the board? Must the Commissioner consider this when reviewing rates for auto insurance? How about the PSC when reviewing electrical rates? I suppose the answer depends upon where the majority found its requirement: whether it is statutorily, constitutionally, or judicially imposed.