Court Opinion

ID: 9696364
Source: CourtListenerOpinion
Date Created: 2023-08-25 18:45:50.381902+00
Date Added: 2024-06-11T18:20:21.738229
License: Public Domain

SHIRLEY S. ABRAHAMSON, J.

(dissenting).

This case is a declaratory judgment action commenced pursuant to sec. 227.05(1), Stats., to obtain judicial review of a rule promulgated by the Commissioner of Insurance. The majority treats this case as if it were conducting a review of a trial by the circuit court of the Commissioner on a charge of disseminating misleading information. I write because I believe the majority’s approach does not conform to the statutes or case law and because I believe it produces the wrong result.
The majority states the major question which the circuit court confronted and decided as — “Whether the Buyer’s Guide and Policy Summary prescribed by Com*115missioner Mitchell would be misleading to prospective purchasers of whole life insurance due to their failure to include the NPCI [Net Payment Cost Index] and ELAD [Equivalent Level Annual Dividend] with the SCI [Surrender Cost Index] for the policies under consideration.” (Sujyra, p. 100) The majority concludes that the circuit court properly held the documents to be misleading, reasoning as follows: the Commissioner’s rule-making power is exceeded if the Commissioner requires insurance companies or agents to disseminate information that is misleading because it is incomplete; whether the Buyer’s Guide and Policy Summary are misleading is a question of fact for the circuit court to decide sitting as the trier of facts based on evidence presented to that court; this court will not reverse the circuit court’s findings that the Guide and Summary are misleading unless these findings of fact are clearly erroneous and against the great weight and clear preponderance of the evidence even if there is evidence to support contrary findings that the Guide and Summary are not misleading. This summary of the steps of the majority’s reasoning highlights the basic flaw of the opinion, namely that the majority has lost sight of the nature of the case.
Briefly I view the case as follows: This case is a judicial review of a rule promulgated by an administrative agency.1 The rule was promulgated pursuant to the *116Commissioner’s statutory power to adopt rules requiring insurance companies to disseminate information about the cost of life insurance policies.2 The Commissioner *117adopted the rule after lengthy hearings in which Aetna participated. The participants at the hearings discussed the types of information which would be helpful or misleading to consumers, and the insurance company participants presented the same arguments to the Commissioner as they later presented to the circuit court and this court. After taking into consideration the concerns of industry and the consumer, the Commissioner selected the information which she believed would be most helpful to the consumer and decided how this information could best be presented to the consumer in an informative manner which would not be misleading. In formulating the rule the Commissioner necessarily had to decide the same question which according to the majority confronted the circuit court and which now confronts this court— “whether the Buyer’s Guide and Policy Summary would be misleading to prospective purchasers of whole life insurance due to their failure to include the NPCI and ELAD with the SCI for the policies under consideration.” (Supra, p. 100) By promulgating the rule the Commissioner has implicitly answered this question in the negative. This same question can be phrased in different terms as follows: Do the Guide and Summary provide adequate, helpful information and further the Commis*118sioner’s goal of disseminating information to assist consumers in comparing the cost of life insurance policies prior to purchase? By promulgating the rule the Commissioner has implicitly answered the question in the affirmative. In formulating the rule the Commissioner has performed a quasi-legislative, quasi-law making role which the legislature has delegated to her. In this declaratory judgment action to review the rule, the court in effect reviews the Commissioner’s decision that the information she requires disseminated is not misleading and fulfills its purpose.
I dissent because the majority has not restricted itself to a review of the Commissioner’s rule; instead the majority has improperly substituted a court’s judgment for a quasi-legislative decision of the Commissioner.

I. CHAPTER 227 REVIEW

I consider first the judicial review statutes applicable to this case.
The parties agree that the Buyer’s Guide and Policy Summary are part of a rule promulgated by the Commissioner and that the agency action in the instant case is classified as a rule under ch. 227, Stats. 1979-80. Aetna brought this declaratory judgment action in Dane county circuit court seeking judicial review of the rule pursuant to sec. 227.05, Stats. 1979-80.3 Sec. 227.05(1) provides that, except in instances not applicable here, “the exclusive means of judicial review of the validity of a rule shall be an action for declaratory judgment as to the validity of such rule brought in the circuit court for Dane county.”
Under sec. 227.05(4), Stats. 1979-80, a court shall declare a rule invalid if the rule: violates constitutional provisions; exceeds the statutory authority of the agency; *119or was adopted without compliance with rule-making procedures.
“Sec. 227.05(4) In any proceeding pursuant to this section for judicial review of a rule, the court shall declare the rule invalid if it finds that it violates constitutional provisions or exceeds the statutory authority of the agency or was adopted without compliance with statutory rule-making procedures.”
Aetna asserts that the rule exceeds the statutory authority of the Commissioner. This challenge rests on two grounds: (1) sec. 628.34(1) (a), Stats., which prohibits an insurance company from making misleading statements similarly prohibits the Commissioner from requiring an insurance company to make misleading statements; and (2) the purposes of the insurance laws4 *120administered by the Commissioner are frustrated by the rule which requires an insurance company to make misleading statements.5
The first question a rule challenge raises is what is the record on which judicial review is to be based. Sec. 227.05, Stats. 1979-80 is silent on this point. There are several alternatives, each of which presents advantages and disadvantages. The nature of the record which will be needed is dependent on the issues raised on the review. And the nature of the record may affect the scope of review. Judicial review might be limited solely to a record consisting of the language of the rule and of the statutes and a description of the procedure followed in adopting the rule.6 Or another alternative is review based solely on the record made during the administrative rule-making proceedings. Review might also be based on a record made before the circuit court, or on a record made during the rule-making proceedings supplemented as the circuit court deems appropriate,7 or on a record made by the administrative agency on remand to the administrative agency for further fact finding.8
*121The record in this case includes proceedings before both the agency and circuit court. In the instant case transcripts were made of the Commissioner’s rule-making hearings, and the Commissioner received written material in connection with the hearings. Sec. 227.02, Stats. 1979-80.9 These administrative records were presented to the circuit court. Aetna objected to the introduction *122of the administrative record in the circuit court. The grounds for the objection are not clear. Apparently there was no claim made in the circuit court that the record of the proceedings before the Commissioner were an inadequate basis for judicial review. Nevertheless, in the instant case the trial court heard extensive expert opinion testimony and based its ruling on the record made in that court.
Sec. 227.05 neither authorizes the taking of testimony nor prohibits the taking of testimony in a declaratory judgment action for review of a rule. Neither party explains why evidence was presented in the circuit court. Aetna’s brief justifies the taking of testimony in circuit court citing sec. 227.05(1), Stats. 1979-80, which refers to “supporting evidence,”10 and the order of this court which remanded the matter to the circuit court for a “hearing on the merits.” But this reference in sec. 227.05 (1) to “supporting evidence” appears to be to “supporting evidence” for the purpose of determining whether the legal rights of the plaintiff have been impaired so as *123to justify the declaratory judgment action. The order of this court did not elaborate on the type of hearing to be conducted by the circuit court or prescribe the nature of the record to be reviewed or to be made. The nature of the record upon which judicial review of a rule should be conducted is an important issue. Unfortunately the majority does not consider it and does not provide guidance for future declaratory judgment actions.
Whatever the record upon which review is based, a broader question, also unanswered in sec. 227.05, Stats. 1979-80, is the scope of review, that is the principles of judicial review which the court should apply to determine whether the rule exceeds the Commissioner’s statutory authority.11
The parties disagree as to the scope of review. Aetna argues that the issue of whether the rule is misleading is a fact issue for ab initio determination by the circuit court or a question of law for ab initio determination by the courts. The Commissioner asserts that the review is of a quasi-legislative agency determination; that the court cannot substitute its judgment for that of the Commissioner ; and that the scope of review is the rational basis test.
Principles of judicial review are the means of allocating the decision-making function between agencies and courts and allowing the courts and agencies to work as partners in the furtherance of the public interest. Gardner, Federal Courts and Agencies: An Audit of the Partnership Books, 75 Colum. L. Rev. 800 (1975). The legislature has delegated the policy-making function to the administrative agency and has empowered the court to review the agency rules to ensure that they are lawful. A court should not rubber stamp an agency rule; such *124a review would be a time-consuming, expensive ritual. Judicial review should be a meaningful supervision of the work of the administrative agencies. But in exercising such supervisory powers, the court must exercise judicial restraint. The court is to review the agency rule; the court is not to decide what the rule should be.
Recently courts and commentators have suggested that in reviewing a rule the court might deal separately with the component issues of rulemaking, such as the agency rulemaking procedure, the agency’s interpretations of law, the agency’s factual determinations, and the agency’s decisions on policy within the agency’s exercise of delegated discretion. Under the “component” or “functional” approach to judicial review, the scope of judicial review depends on the issue involved. In 1975, with the enactment of sec. 227.20, Stats. 1979-80, the Wisconsin legislature has adopted this functional approach, albeit in a different context, namely judicial review of administrative decisions. See Judicial Council Explanatory Notes accompanying 1975 AB 163, Ch. 414, Laws of 1975. While not expressly applicable to judicial review of rules, sec. 227.20, Stats. 1979-80, does apply to a wide spectrum of administrative decisions including quasi-legislative decisions which maybe have some similarities with agency rules.12 I find the legislative approach to the scope of *125judicial review embodied in sec. 227.20, Stats., useful in determining the approach to be taken in judicial review of the rule before us.
Sec. 227.20, Stats. 1979-80, provides that the court’s review shall be confined to the record made before the administrative agency13 and describes the review of agency procedure, interpretations of law, and determinations of fact or policy within the agency’s exercise of delegated discretion as follows:
“227.20. Scope of review. (1) The review shall be conducted by the court without a jury and shall be confined to the record, except that in cases of alleged irregularities in procedure before the agency, testimony thereon may be taken in the court and, if leave is granted to take such testimony, depositions and written interrogatories may be taken prior to the date set for hearing as provided in ch. 804 if proper cause is shown therefor.
“(3) The court shall separately treat disputed issues of agency procedure, interpretations of law, determinations of fact or policy within the agency’s exercise of delegated discretion.
*126“ (4) The court shall remand the case to the agency for further action if it finds that either the fairness of the proceedings or the correctness of the action has been impaired by a material error in procedure or a failure to follow prescribed procedure.
“(5) The court shall set aside or modify the agency action if it finds that the agency has erroneously interpreted a provision of law and a correct interpretation compels a particular action, or it shall remand the case to the agency for further action under a correct interpretation of the provision of law.
“(6) If the agency’s action depends on any fact found by the agency in a contested case proceeding, the court shall not substitute its judgment for that of the agency as to the weight of the evidence on any disputed finding of fact. The court shall, however, set aside agency action or remand the case to the agency if it finds that the agency’s action depends on any finding of fact that is not supported by substantial evidence in the record.
“(7) If the agency’s action depends on facts determined without a hearing, the court shall set aside, modify or order agency action if the facts compel a particular action as a matter of law, or it may remand the case to the agency for further examination and action within the agency’s responsibility.
“ (8) The court shall reverse or remand the case to the agency if it finds that the agency’s exercise of discretion is outside the range of discretion delegated to the agency by law; is inconsistent with an agency rule, an officially stated agency policy or a prior agency practice, if deviation therefrom is not explained to the satisfaction of the court by the agency; or is otherwise in violation of a constitutional or statutory provision; but the court shall not substitute its judgment for that of the agency on an issue of discretion.
“(10) Upon such review due weight shall be accorded the experience, technical competence, and specialized knowledge of the agency involved, as well as discretionary authority conferred upon it. The right of the appellant to challenge the constitutionality of any act or of its application to the appellant shall not be foreclosed or impaired by the fact that the appellant has applied for or holds a license, permit or privilege under such act.”
*127To a large extent sec. 227.20, Stats. 1979-80, codifies the rules of review the courts have traditionally employed.
Distinguishing among factual findings (the task of the agency subject to review), issues of law (ordinarily the task of the court), and the agency’s exercise of discretion (policy choices, the prerogative of the agency subject to review) is not easy. Often the three converge. Nevertheless using the component approach to judicial review of the rule before us helps clarify the issues and ensures that the court properly performs its judicial review function.
In this case I tend to favor using the “hard look” doctrine espoused by Judge Leventhal. As I understand it, while the focus of the doctrine is on whether the agency took the requisite “hard look,” the court immerses itself in the record to see if the agency’s action is supported by a factual record and reasoned articulation. Estreicher, Pragmatic Justice: The Contributions of Judge Harold Leventhal to Administrative Law, 80 Colum. L. Rev. 894, 906 (1980). If the agency’s action is so supported, it will be upheld.

II. REVIEW OF FACTUAL UNDERPINNINGS

The majority concludes that in order to determine whether the rule exceeds the Commissioner’s statutory authority the court must “look . . . into their factual underpinnings.” (Supra, p. 109)
I agree with the majority that although rule making involves policy determination and is an act legislative in character, Peterson v. National Resources Board, 94 Wis.2d 587, 595, 288 N.W.2d 845 (1980), there are frequently factual components in rule-making — as there are in the adjudicative process. Misunderstanding of the facts is as dangerous in developing an administrative *128rule as in determining the outcome of an adjudicatory-proceeding.
Unfortunately the majority does not set forth the “factual underpinnings” which it is examining. I suggest that the basic “factual underpinnings” of the rule are that a substantial number of policies are lapsed or surrendered rather than terminated by death; that in a majority of instances whether the policy terminates by lapse, surrender or death, the SCI and the NCPI Indexes as cost comparison tools lead to the same result; that comparison of costs of insurance policies is complex;14 that there is a need for disclosure of cost information; and that there is no single, agreed-upon technique for comparing costs of policies prior to purchase. I believe these factual predicates of the rule are undisputed and unchallenged by Aetna, the circuit court, or the majority opinion.
The majority concludes there is another factual issue underlying the rule and sets it forth as follows: “The question of whether the Buyer’s Guide and the Policy Summary are misleading is a question of fact.” (Supra, p. 110) The majority’s characterization of the question as one of fact is not supported by any citation to authority or by any reasoning of the court.
Assume for the moment, as the majority does, that the question of whether the rule is misleading is one of fact. The issue which then must be decided is who decides this fact — the Commissioner or the circuit court. Considering that the legislature has empowered the Commissioner to determine what information should be disclosed to the consumer and that the legislature has authorized the *129court to review the Commissioner’s rule as to disclosure to determine whether it is in excess of the Commissioner’s statutory authority, I conclude that if the rule is predicated on the disputed factual issue whether the information is or is not misleading, the factual issue should be decided initially by the Commissioner (on the basis of the record presented to her), and her decision should then be reviewed by the circuit court — and this court — to determine if it is supported by substantial evidence on the record. The issue comes back then to what should the record be. I shall not discuss this question further. I merely note that this court has applied the substantial evidence test to records made in “legislative-type decisions,” saying that the court in deciding whether there is substantial evidence to support a legislative-type decision, determines whether reasonable minds could arrive at the same conclusion as the agency. Ashwaubenon v. State Highway Comm., 17 Wis.2d 126, 131, 115 N.W.2d 498 (1962), quoted with approval in Westring v. James, 71 Wis.2d 462, 476, 238 N.W.2d 695 (1976).15
Thus, if the majority is correct that the issue is one of fact, the majority errs in permitting the circuit court to determine the fact ah initio rather than requiring the circuit court to review the Commissioner’s determination of the fact; and the majority further errs in reviewing the circuit court’s determination rather than the Commissioner’s determination.

*130
III. REVIEW OF ISSUE OF LAW

I find the majority’s characterization of the issue as one of fact surprising. Ordinarily the determination of whether a rule contravenes a statute involves a comparison of the language of the statute and of the rule and an interpretation of the rule and the statute. These questions are generally viewed as questions of law for purposes of judicial review. Peterson v. National Resources Board, 94 Wis.2d 587, 288 N.W.2d 845 (1980). Inasmuch as the issue in this case is viewed by the majority as being whether the rule is “false or misleading” under sec. 628.34, Stats. 1979-80, the issue can be also characterized as the application of a statutory (legal) concept (“false or misleading”) to an undisputed fact situation (the language of the rule). This kind of issue, sometimes characterized as a mixed question of fact and law, has generally, but not invariably, been viewed by this court as a question of law for purposes of judicial review. Nottleson v. DILHR, 94 Wis.2d 106, 115-117, 287 N.W.2d 763 (1980).16
The court’s analysis in Wawszkiewicz v. Department of the Treasury, 480 F. Supp. 739 (D. D.C. 1979), to determine whether the contents of a rule were misleading is instructive. Consumers attacked a Department of Treasury regulation allowing wine labels to carry the name “Chardonnay” without disclosing that other grape varieties may compose up to 25 percent of the volume. Con*131sumers attacked the regulation, arguing that the label was misleading because it was incomplete and arguing further that the regulation should identify the precise percentage of all grape varieties. The Treasury was empowered by statute to require wines to carry labels in conformity with regulations which “prohibit deception of the consumer” and which prohibit “irrespective of falsity” matters which are “likely to mislead the consumer.” The court began its analysis by saying that the issue whether the label permitted by the regulation was misleading was one of statutory construction and therefore a question of law.17 The court, giving the words on the label the ordinary meaning which the consumer would give them, determined that the “clear implication” to the consumer of the label bearing only the word “Chardonnay” was that the wine was made from that grape variety and no other. The court therefore concluded that the label and rule were misleading and were, therefore, as a matter of law beyond the statutory authority of the Department.18 The Treasury has no statutory authority or discretion to sanction the transmittal of false and misleading information.
Using this approach, this court need not defer to the decision of the Commissioner or of the circuit court, and I conclude that the Buyer’s Guide and Policy Summary do not in and of themselves mislead the ordinary con*132sumer. Looking at the words of the Guide and Summary for their ordinary meaning and as they would ordinarily be understood by a purchaser of life insurance of average intelligence, I conclude that the clear implication of the Guide and Summary is that cost determination of life insurance is a complex process involving many factors which the cautious consumer must evaluate. For example, the Summary states that “to find a low cost policy, compare cost index figures, not just premiums.” This language of the Summary is not limited to the surrender cost index. The Summary does set forth the surrender cost index for the policy because “a policy with a lower Surrender Cost Index is likely to be a better buy.” This statement does not say or mean that a policy with a lower Surrender Cost Index is always a better buy. The utility of the Cost Surrender Index is stated in a qualified manner in both the Summary and in the Guide. Repeatedly the consumer is told that the cost surrender index applies only if the consumer surrenders the policy, not if the consumer dies. The consumer is told that dividends are not guaranteed. The Summary expressly states that “the Surrender Cost Index assumes that the policy is surrendered for its cash value 10 or 20 years in the future. Death prior to these surrender dates may alter the cost comparisons. Figures for participating policies are based on illustrated dividends which are not guaranteed.” Aetna is right: The policy with a lower cost surrender index may not always be a better buy. But the record shows that in the vast majority of cases the policy with a lower Cost Surrender Index will be the better buy— whether the policy is surrendered or terminated by death.
This is not a case of an agency labeling an 85 percent meat frankfurter as “All Meat,”19 or an agency labeling wine made in part of a variety of grapes as “Chardon*133nay”20 or an agency labeling a ham with 10 percent water as “Imitation Ham.”21 There are differences between the food labels and the Guide and Summary in the nature of information presented and in the market context in which these communications are provided to the consumer.
The food labels purport to describe the product the consumer is buying. The labels are not honest, straightforward or truthful; the ordinary purchaser is not getting the goods the label describes. These food labels, read between the shelf and the cash register, are the final and only information required to be made available to the consumer. No sales person licensed by the State of Wisconsin is present and authorized to explain the label or the intricacies of the contents of the package or to provide further information.
In the instant case, the Guide and Summary do not purport to advise the consumer whether the policy presented is the cheapest policy available for that consumer. The Guide and Summary do not predict the cost of a particular policy for a particular consumer. The true cost of the policy can be determined not at the date of purchase but only “after the fact,” that is at death, maturity of the policy, or at surrender of the policy. The Guide and Summary explain how consumers can go about estimating the cost of a policy. The Guide and Summary give the consumer a short course in cost disclosure and comparison shopping. This short course can be supplemented by the licensed salesperson.
Unlike the food labels, the Guide and Summary do not contain any factual misstatements and they are not rendered false and misleading by what they fail to include. *134These documents on their face are hedged with sufficient qualifications and disclaimers to save them from such an attack. No purchaser of a life insurance policy of ordinary education and intelligence reading the documents could think that the SCI supplies all the information the purchaser needs to know or that the SCI is the “final” or “only” answer to comparison shopping. I therefore conclude that the Summary and Guide are not as a matter of law misleading.

IV. REVIEW OF AGENCY DISCRETION OR POLICY

The essence of Aetna’s position, and the essence of the majority’s opinion, is that the Buyer’s Guide and Policy Summary are deficient because they emphasize the SCI22 and do not contain two other indices which may be of use to a prospective life insurance policy purchaser. The circuit court reasoned that the rules were misleading because the Commissioner failed to include useful information. Aetna and the majority seek to force the Commissioner to require insurance companies to make more detailed disclosure because they conclude that additional information would make the Guide and Summary more helpful for the consumer.
Although everyone agrees on the desirability of presenting the consumer with effective, meaningful cost disclosure, it is clear from the record, the briefs, the circuit court opinion and the majority opinion that reasonable people disagree as to the best means of achieving fair, meaningful, accurate cost disclosure which the consumer can understand. The dispute in this case really goes to the issue of whether the Commissioner’s exercise of her authority as to what information must be disclosed is sound and reasonable, that is whether the Commissioner *135has abused her discretion, whether the exercise of discretion is outside the range of discretion delegated to the Commissioner by law, whether the rule substantially furthers the objectives sought, whether the rule is a rational means to an end.
The legislature has delegated to the Commissioner the power to select the means to reach the objective. Selecting the means involves assessing existing and projected facts and predicting the effectiveness of a course of action. As I said previously, this court might review each component of the Commissioner’s rule making process. The court would review the Commissioner’s assessment of the facts to determine if they are supported by substantial evidence. Facts and policy blend together. In some instances of rule making, the Commissioner deals less with “ ‘evidentiary’ disputes than with normative conflicts, projectories from imperfect data, experiments and simulations, educated predictions, differing assessments of possible risks, and the like.” Amoco Oil Co. v. Environmental Protection Agency, 501 F.2d 722, 735 (D.C. Cir. 1974). See 1 Davis, Administrative Law Treatise sec. 6.13, p. 510 (2d ed. 1979).
In this case the Commissioner’s decision as to what information will be helpful to the consumer is in the nature of a prediction for which supporting data is conflicting. Whether one index is better for the consumer than two or whether three are better than one, is not readily capable of objective determination. This “fact,” really unknowable, can best be characterized as an educated prediction, or more skeptically as a hunch, based on available empirical data. The Commissioner’s decision rests on an essentially legislative policy judgment, rather than on a factual determination. Cf. FCC v. Nat’l Citizens Comm’n for Broadcasting, 436 U.S. 775, 813-14 (1978).23
*136Where the rule turns on facts which are interrelated with policy choices, risk assessment, and predictions of the future, the court’s review should be directed to the reasons and explanations advanced by the Commissioner in support of the policy choices, risk assessments, and predictions, and should not dwell only on assurances of the correctness of the factual support for the rule. When fact and policy are mixed, as they often are, the court’s objective is “to see whether the agency, given an essentially legislative task to perform, has carried it out in a manner calculated to negate the dangers of arbitrariness and irrationality in the formulation of rules for general application in the future.” Automotive Parts and Accessories Ass’n v. Boyd, 407 F.2d 330, 338 (D.C. Cir. 1968). See also Wisconsin Environmental Decade v. Pub. Service Comm., 79 Wis.2d 409, 425, 256 N.W.2d 149 (1977); Industrial Union Dept. v. Hodgson, 499 F.2d 467, 474-475 (D.C. Cir. 1974).
In dealing with Aetna’s contention that the Summary and Guide are inadequate and should include two more indices, I again turn to the court’s instructive analysis in the Wawszkiewicz Chardonnay wine case. The second issue in that case involved the consumers’ seeking to force the Treasury to require disclosures more detailed than were necessary to prevent the label from being misleading. The court compared its review of the Treasury’s statutory power to prohibit “false and misleading statements” and its review of the Treasury’s statutory power to require labels which “provide the consumer with adequate information as to the identity and quality of the products.” The court said that unlike the statutory obligation on the Treasury to prohibit false or misleading statements, there is a separate and different statutory *137obligation on the Treasury to ensure that the disclosure is adequate. The decision of what information to inelude or exclude for purposes of adequacy is subject to review, said the court, but the issue is one of agency discretion and policy and the standard of review is a “highly deferential one. The reviewing court must affirm the agency if it assures itself that a rational basis exists for the agency determination, and that the agency considered all relevant factors in arriving at its choice.” Wawszkiewicz v. Department of Treasury, 480 F. Supp. 739, 746 (D. D.C. 1979).24
This statement of the standard of review of agency discretion and policy making is substantially similar to the traditional statement, which this court has adopted, of the scope of review of a rule or of a quasi-legislative administrative decision. This court has said it will review quasi-legislative administrative acton to determine if it is arbitrary or capricious, willful or irrational; if it bears any reasonable relation to its objective; if it is reasonably intended and calculated to fulfill the legisla*138tively authorized purposes; if it shocks the sense of justice, indicates lack of fair and careful consideration, or is not the result of the “winnowing and sifting” process. Daly v. National Resources Board, 60 Wis.2d 208, 216, 208 N.W.2d 839 (1973); Kachian v. Optometry Examining Board, 44 Wis.2d 1, 8, 170 N.W.2d 743 (1969); Josam Mfg. Co. v. State Board of Health, 26 Wis.2d 587, 603, 605, 133 N.W.2d 301 (1965); Olson v. Rothwell, 28 Wis.2d 233, 239, 137 N.W.2d 86 (1965); 2 Cooper, State Administrative Law 761 (1965).25

V. APPLICATION OF THE TEST OF RATIONALITY

I conclude that whether the issue before the court is viewed as a review of an issue of fact or as a review of agency discretion or policy, the scope of review is substantially similar, because the essence of the standards applicable to each is the requirement of reasonableness or rationality. 1 Davis, Administrative Law Treatise sec. 6.6, p. 468 (2d ed. 1978) .26 This court has said that “the substantial evidence in light of the record test” in almost any case converges with the concept of reasonableness and rationality, the usual expression of the scope of judicial review of quasi-legislative acts. Westring v. James, 71 Wis.2d 462, 477, 238 N.W.2d 695 (1975). See also *139Assoc. Industries of NYS, Inc. v. U.S. Dept. of Labor, 487 F.2d 342, 350 (D.C. Cir. 1973).
I turn now to determine whether the rule passes the test of rationality.
The Commissioner’s emphasis in her regulations on the cost surrender index is based on the factual predicate— which as we noted previously is undisputed and unchallenged — that most policies are terminated prior to death and that in most cases the SCI and the NCPI point in the same direction.
Considering these facts, the Commissioner concluded that a regulation emphasizing the Cost Surrender Index, requiring a single index in the Summary, and discussing all the indices in the Guide, has merit on the grounds of simplicity. The circuit court reviewed the rule and concluded that the Commissioner erred in several respects in the direction of “over simplification.” It is good to make things simple, says the circuit court, but it is misleading to make things simpler than they are. It is a close question whether the Summary and Guide are “simple” or “simpler.” Reasonable minds could reach different conclusions. The majority admits that the record demonstrates that “various actuarial experts disagreed concerning the issue of whether the . . . documents would mislead prospective purchasers of whole life policies as to their comparative costs.” {Supra, p. 104).
The majority, however, burrows deeper in its review of the rule and concludes that the Commissioner’s approach in determining what information should be furnished to the consumer is inherently flawed because the Commissioner has been guided by what actually happens to most policies rather than by what most consumers intend to do with the policy when buying it. The majority requires the Commissioner to draft the Guide and Summary to reflect the intention of the majority of pur*140chasers to hold the policy until death.27 To the majority of this court then “the point . . . [is] that it is the consumer’s intent at the time of purchase . . . that should determine what information must be disclosed in order to enable them to make an intelligent and informed purchase decision.” (Supra, p. 112) Even if the point has merit I think it obvious that the majority’s conclusion is a policy determination for the agency not for the court. If nothing more, this statement illustrates the necessity for agency review, not de novo judicial decision making. For the challenge is foreseeable that were the Commissioner to base her rule on the grounds the majority suggests, she would mislead the consumer by predicating the rule on a consumer fantasy rather than on the facts of life insurance.
The court is to review the Commissioner’s rule to determine if the quasi-legislative task was carried out in a manner calculated to negate the dangers of irrationality and if, on the basis of the evidence presented, her rule makes sense and is defensible. Upon a review of the record I conclude that the Commissioner’s rule is the result of considered and careful study after long hearings. The Commissioner’s decisional process cannot be characterized as being filled with gaps, mistakes or slipshod reasoning. It is for the Commissioner, not this court, to choose which *141experts to believe and to predict consumer needs. The court need not conclude that the administrator’s policy is the best policy or even the preferable one. Where reasonable minds may differ as to which of several measures should be chosen, courts should defer to the appropriate agency. Mourning v. Family Publications Service, 411 U.S. 356, 371 (1973).
The Commissioner’s rule is not patently unreasonable. It is not void of rational basis. It is not the result of an unconsidered, willful or irrational choice. The Commissioner has given a rational explanation for her decision; her decision is supported by expert opinion.
The area of life insurance cost disclosure is a difficult one, and across the country regulatory agencies and insurance companies are groping for answers.28 I might have drafted the rule in the same manner as the Commissioner or I might have drafted it differently. But I am not the Commissioner of Insurance. The record is adequate to support the Commissioner’s exercise of discretion.
The rules promulgated by the Commissioner are designed to operate in the future in a multitude of transactions. At this time there is no magical formula that will assure that the consumer understands the cost of the policy. The Commissioner should be free to experiment with various rational regulatory approaches and should be able to reexamine regulatory approaches, abandoning or changing those that prove defective and retaining those that function well. The rules are published in the Administrative Code, not in concrete. The rules can be changed if they do not work. The Commissioner and the industry agree that something needs to be done to improve disclosure of cost to the consumer. I would give the rules a chance in the marketplace.
*142For the reasons set forth, I dissent.
I am authorized to state that Justice Nathan S. Hbf-FERNAN joins in this dissent.

 We are now in what some commentators call the “third generation” of administrative law. The external and internal controls on administrative agencies have been the subject of increasing judicial and other scholarly attention. There have been significant new approaches in the 1970’s in judicial review of administrative rulemaking. The ideas I have set forth in this dissenting opinion are in part derived from numerous state and federal cases and law review commentaries. See generally, e.g., Davis, Administrative Law Treatise chs. 6, 7, 8 (2d ed. 1978), ch. 30 (1958); Davis, Facts in Lawmaking, 80 Colum. L. Rev. 931 (1980); Estreicher, Pragmatic Justice: The Contributions of Judge Harold Leventhal *116to Administrative Law, 80 Colum. L. Rev. 894 (1980); Gifford, Rulemaking and Rulemaking Review: Struggling Toward a New Paradigm, 32 Admin. L. Rev. 577 (1980); Auerbach, Informal Rule Making: A Proposed Relationship Between Administrative Procedures and Judicial Review, 72 Nw L. Rev. 15 (1977) ; Linde, Due Process of Lawmaking, 55 Neb. L. Rev. 197 (1976) ; Gardner, Federal Courts and Agencies: An Audit of the Partnership Books, 75 Colum. L. Rev. 800 (1975); Nathanson, Probing the Mind of the Administrator: Hearing Variations, and Standards of Judicial Review Under the Administrative Procedure Act and Other Federal Statutes, 75 Colum. L. Rev. 721 (1975); Stewart, The Reformation of American Administrative Law, 88 Harv. L. Rev. 1666 (1975); Wright, The Courts and the Rulemaking Process: The Limits of Judicial Review, 59 Cornell L. Q. 375 (1974); Boyer, Alternatives to Administrative Trial Type Hearings for Resolving Complex Scientific, Economic, and Social Issues, 71 Mich. L. Rev. Ill (1972); Prohnmayer, The Oregon Administrative Procedure Act: An Essay on State Administrative Rulemaking Procedure Reform, 58 Ore. L. Rev. 411, 456-63 (1980) ; Auerbach, Administrative Rulemaking in Minnesota, 63 Minn. L. Rev. 151 (1979); Bunn & Gallagher, Legislative Committee Review of Administrative Rules in Wisconsin, 1977 Wis. L. Rev. 935; Brodie & Linde, State Court Review of Administrative Action: Prescribing the Scope of Review, 1977 Ariz. St. L. J. 537; Bonfield, The Iowa Administrative Procedure Act: Background, Construction, Applicability, Public Access to Agency Law, The Rulemaking Process, 60 Iowa L. Rev. 731 (1975); Currie, Rulemaking Under the Illinois Pollution Law, 42 U. Chi. L. Rev. 457 (1975); Levinson, The Florida Administrative Procedure Act: 197'4 Revision and 1975 Amendments, 29 U. Miami L. Rev. 617 (1975); Gifford, Declaratory Judgments Under the Model State Administrative Procedure Acts, 13 Houston L. Rev. 825 (1976); Sewell, Judicial Review and the Uniform Administrative Procedures Act, 6 Memphis St. U. L. Rev. 253 (1976).

 Sec. 601.41(2), Stats. 1979-80, states that the Commissioner “shall have all powers specifically granted ... or reasonably implied in order to enable the Commissioner to perform the duties [to enforce chs. 600-646].” Sec. 601.41(3), Stats. 1979-80, grants *117to the Commissioner “rule-making authority under s. 227.014(2),” and sec. 227.014(2) (a), Stats. 1979-80, in turn provides:
“Each agency is authorized to adopt such rules interpreting the provisions of statutes enforced or administered by it as it considers to be necessary to effectuate the purpose of the statutes, but such rules are not valid if they exceed the bounds of correct interpretation.”
Aetna concedes that the Commissioner has the power to adopt rules regulating disclosure of information by insurance companies on the cost of life insurance policies. Aetna’s challenge is directed to the particular rules the. Commissioner promulgated.
For a discussion of interpretive rules and legislative rules and the scope of judicial review thereof, see, Minnesota-Dakota Retail Hardware Ass’n v. Sibley Co., 279 N.W.2d 360 (Minn. 1979).

 Chapter 227 provides two review procedures, one for rules, sec. 227.05, and the other for administrative decisions, secs. 227.15, 227.16(1), 227.20, Stats.

 See. 601.01(3) (b), (c), (g) and (j), Stats. 1977, set forth the purposes of the insurance code as follows:
“(b) To ensure that policyholders, claimants and insurers are treated fairly and equitably;
“ (c) To ensure that the state has an adequate and healthy insurance market, characterized by competitive conditions and the exercise of initiative;
“(g) To maintain freedom of contract and freedom of enterprise so far as consistent with the other purposes of the law;
“(j) To keep the public informed on insurance matters;”
Sec. Ins 2.14(1), Wis. Adm. Code (1980), the “purpose” subsection of the challenged rule, states:
“Ins. 2.14 Life insurance solicitation. (1) Puepose. The purpose of this rule is to require insurers to deliver to purchasers of life insurance information which will improve the buyer’s ability to select the most appropriate plan of life insurance for his or her needs, improve the buyer’s understanding of the basic features of the policy which has been purchased or which is under consideration and improve the ability of the buyer to evaluate the relative costs of similar plans of life insurance. This rule does not prohibit the use of additional material which is not in violation of this rule or any other Wisconsin statute or rule. This rule interprets and implements, including but not limited to the following Wisconsin Statutes: ss. 601.01(3) (b), (c), (g) and (j) and 628.34.”

 The majority concerns itself with only the first argument and I shall so limit my opinion. The rationale and result I espouse apply similarly to this second argument.

 See, e.g., Peterson v. National Resources Board, 94 Wis.2d 587, 288 N.W.2d 845 (1980). In Peterson the circuit court took testimony and this court summarizes the testimony but does not rely on it.
See Oregon Rev. Stats., sec. 183.400 (1979), providing that judicial review of a rule shall be limited to an examination of the rule under review; the statutory provisions authorizing the rule; and copies of documents necessary to demonstrate compliance with applicable rule making procedures.

 See, e.g., Iowa Code sec. 17A 19(7) (1977) authorizing the court to hear and consider such evidence as it deems appropriate.

 Sec. 227.05(2), Stats. 1963, which required that when an issue of fact affecting the validity of a rule or the applicability of a rule to a policy is raised in a declaratory judgment judicial review *121of a rule, the matter be referred to the agency. Sec. 227.05(2) was repealed by ch. 191, Laws of 1965. Sec. 227.05(2), Stats. 1963, provided:
“(2) Whenever an issue of fact is raised concerning the applicability of a rule to a party or affecting the validity or proper interpretation of a rule, the court shall, before deciding the pertinent legal question, refer the case to the agency for determination of the fact issue under the declaratory ruling procedure provided in s. 227.06. The determination of such fact issue by the agency shall be transmitted promptly thereafter to the court by the agency, together with all papers transmitted to the agency by the court upon the referral of the case to the agency and a record or certified copy of the entire record of the proceedings before said agency in respect to such determination, subject to the same requirements and provisions as are set forth in s. 227.18. The determination shall be reviewable by the court in the proceeding in which it arose as an issue and the scope of such review shall be as provided in s. 227.20.”
For a discussion of sec. 227.05(2), Stats. 1963, see Josam Mfg. Co. v. State Board of Health, 26 Wis.2d 587, 133 N.W.2d 301 (1965), in which the court held the agency waived any procedural right it may have had to have issues of fact referred back to the agency and further held that the circuit court was authorized to take testimony and make findings of fact. I could find no explanation or discussion of the repeal of sec. 227.05(2), Stats. 1963. I note that the repeal followed the Josam ease. Cf. sec. 227.19, Stats. 1979-80.

 Sec. 227.02, Stats. 1979-80, requires, with some exceptions, that agencies precede rule making with notice and public hearing. See secs. 227.021, 227.022, Stats. 1979-80. In addition, the statutes require that the agency “keep minutes or a record of the hearing in such manner as it determines to be desirable and feasible.” Sec. 227.022(2), Stats. 1979-80. Helstad, New Law on Administrative Buie Making, 1956 Wis. L. Rev. 407, 422.

 Sec. 227.05(1), Stats. 1979-80, provides:
“227.05 Declaratory judgment proceedings. (1) Except as provided in sub. (2), the exclusive means of judicial review of the validity of a rule shall be an action for declaratory judgment as to the validity of such rule brought in the circuit court for Dane county. The officer, board, commission or other agency whose rule is involved shall be the party defendant. The summons in such action shall be served as provided in s. 801.11(3) and by delivering a copy to such officer or to the secretary or clerk of the agency where composed of more than one person or to any member of such agency. The court shall render a declaratory judgment in such action only when it appears from the complaint and the supporting evidence that the rule or its threatened application interferes with or impairs, or threatens to interfere with or impair, the legal rights and privileges of the plaintiff. A declaratory judgment may be rendered whether or not the plaintiff has first requested the agency to pass upon the validity of the rule in question.”

 The Revised Model State Administrative Procedure Act (1961) on which the Wisconsin statute is based is similarly silent. See 14 Uniform Laws Annot. 357, 400 (Master ed. 1980).

 Sec. 227.20, Stats., is applicable to administrative decisions whether reached in a contested case to which the “fair play” provisions of secs. 227.07-227.13, Stats. 1979-80, apply or whether reached after a hearing in which these provisions do not apply. Wisconsin Environmental Decade v. Public Service Comm., 93 Wis.2d 650, 659a-659b, 287 N.W.2d 737 (1980); Ashwaubenon v. P.S.C., 22 Wis.2d 38, 46, 125 N.W.2d 647, 126 N.W.2d 567 (1963).
The applicability of sec. 227.20, Stats., is not limited to decisions which are adjudicatory in nature. Sec. 227.20 governs review of decisions which are reached in the “exercise of the legislative function.” Westring v. James, 71 Wis.2d 462, 475, 238 N.W.2d 695 (1976).

 See secs. 227.18, 227.19, 227.20, Stats. 1979-80. The record reviewed, however, is not always the record of a contested case. Thus see. 227.20, Stats, review applies even if the reviewing court is not assured of a full record. The absence of a full record and a “fair-play adjudicative” hearing, this court has said, does not permit the court to ignore the administrative agency record. Ashwaubenon v. State Highway Comm., 17 Wis.2d 120, 126, 115 N.W.2d 498 (1962); Ashwaubenon v. P.S.C., 22 Wis.2d 38, 47, 125 N.W.2d 647 (1963).
Although sec. 227.20 review is on the agency record, I do not wish this opinion to be interpreted as my concluding that the circuit court cannot take evidence in a sec. 227.05 review. The issue of presenting evidence before the circuit court is, as I have noted previously, a troublesome one. At a minimum before evidence is received, the circuit court, with the aid of the parties, should determine in what way the administrative record is inadequate and for what purpose evidence will be taken. See notes 6, 7 and 8 supra and text.

 See, e.g., Belth, Price Disclosure in Life Insurance, 1972 Wis. L. Rev. 1054; Bernacehi, Implementation of Full Disclosure of Policy Value in the Life Insurance Contract, 24 Drake L. Rev. 809 (1975); Note, Life Insurance and The Consumer: At What Price Disclosure, 26 Drake L. Rev. 857 (1977).

 See note 13 supra,. This court has “ ‘equated substantial evidence with that quantity and quality of evidence which a reasonable man could accept as adequate to support a conclusion. . . . There may be eases where two conflicting views may each be sustained by substantial evidence. In such a case, it is for the agency to determine which view of the evidence it wishes to accept. . . .’ ” Reinke v. Personnel Board, 53 Wis.2d 123, 135, 138, 139, 191 N.W.2d 833 (1971), quoted with approval in Daly v. National Resources Board, 60 Wis.2d 208, 220, 208 N.W.2d 839 (1973).

 Even though the determination of the application of a statutory concept to the fact situation may be labeled a question of law, the reviewing court should not disregard the agency’s determination. The determination calls for a value judgment and the court must in each case decide the extent to which weight should be given to the agency’s value judgment. Nottleson v. DILHR, 94 Wis.2d 106, 116-117, 287 N.W.2d 763 (1980). Although I review the application of the statutory (legal) concept to the fact situation de novo, I believe this case is an example of one in which the agency’s determination, if reasonable, should be given weight.

 “In examining an agency’s interpretation of statutory provisions, the Court confronts questions of law which it is required to decide. . . . [C]ourts are the final authorities on matters of statutory construction. ... As part of its independent judicial review, this Court must therefore determine de novo whether the agency has acted consistent with statutory authority.” Wawszkiewicz v. Dept. of the Treasury, 480 F. Supp. 739, 743 (D. D.C. 1979).

 For a similar approach see Federation of Homemakers v. Butz, 466 F.2d 462 (D.C. Cir. 1972) (“All meat” Frankfurters); Armour & Co. v. Freeman, 304, F.2d 404 (D.C. Cir. 1962) (“Imitation Ham”), cert denied 370 U.S. 920 (1962) (preliminary injunction) .

 Federation of Homemakers v. Butz, 466 F.2d 462 (D.C. Cir. 1972).

 Wawszkiewicz v. Dept. of the Treasury, 480 F. Supp. 739 (D. D.C. 1979).

 Armour & Co. v. Freeman, 304 F.2d 404 (D.C. Cir. 1962), cert. denied 370 U.S. 920 (1962).

 Since 1972 the rules have required disclosure of the Surrender Cost Index to the consumer after the policy is purchased.

 Por a discussion of mandated disclosure, see, e.g., March 1981 Wisconsin Securities Bulletin (The Office of Comm’r of Securities), Vol. 9, No. 3, pp. 1-6; Bowers, Book Review of Kripke, *136The SEC and Corporate Disclosure: Regulation in Search of a Purpose, 1980 Wis. L. Rev. 1081; Whitford, The Function of Disclosure in Consumer Transactions, 1973 Wis. L. Rev. 408.

 . . The question of whether a label, otherwise not misleading, provides adequate information is not therefore a matter of statutory construction.
“The Court instead must review the evidence in support of the agency’s policy judgments, but may strike the decisions only upon finding them ‘arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.’ 5 U.S.C. sec. 706(2) (A). This standard of review is a highly deferential one. The reviewing court must affirm the agency if it assures itself that a rational basis exists for the agency determination, and that the agency considered all relevant factors in arriving at its choice. . . . The Court’s role here is of course not simply pro forma, it must be satisfied that the agency has articulated reasons and identified important facts in support of its judgment. . . . But a reviewing judge need not agree that the administrator’s choice is optimal or even preferable; so long as the decision is rational and has support in the record, the court may not substitute its own judgment for that of the agency. . . .” (Citations omitted.) Wawszkiewicz v. Dept. of the Treasury, 480 F. Supp. 739, 746 (D. D.C. 1979).

 “In order to set aside a regulation, it must be clearly unreasonable. If reasonable minds may well be divided on the question, the administrator must be upheld. It must be shown that no reasonable administrator would have made such a regulation and that it is lacking in reason and that it is essentially arbitrary.” Kachian v. Optometry Examining Board, 44 Wis.2d 1, 8, 170 N.W.2d 743 (1969). This issue of reasonableness and rational basis is sometimes put in constitutional terms. See Josam Mfg., supra.

 In this case I would apply the reasonableness test and defer to the agency, even if I viewed the question as one of law. See note 16 supra.

 The court gives specific direction to the Commissioner that all three indices must be included. Even if I agreed that the rule was invalid, I disagree with this approach taken by the majority. There are other indices which the court has not considered, and it is far from clear from the record that ELAD would be helpful. The court should not dictate the decision of what indices should be used. The Commissioner should be given the opportunity to reexamine the issue which may lead to a better articulation of the position previously taken or a change of position.
For one insurance company’s advertising approach to cost disclosure, see The Bankers Life, How Can I Make a Reliable Cost Comparison Between Competitive Policies, Changing Times 43, 44 (June 1980). It refers to only two indices.

 The record shows that several states have adopted disclosure rules which principally use the cost surrender index.