concluding Legislature may delegate authority to the former State Board of Insurance under the statute’s “encourages misrepresentation” provision; the “standards the Supreme Court (of the United States) has held adequate include ‘just and reasonable,’ ‘public interest,’ ‘unreasonable obstruction to navigation,’ ‘reciprocally unequal and unreasonable,’ ‘public convenience, interest, or necessity,’ ‘tea of inferior quality,’ ‘unfair methods of competition,’ ‘reasonable variations,’ ‘unduly or unnecessarily complicate the structure’ of a holding company system or ‘unfairly or inequitably distribute voting power among security holders’”
How later courts described this case
- concluding Legislature may delegate authority to the former State Board of Insurance under the statute’s “encourages misrepresentation” provision; the “standards the Supreme Court (of the United States) has held adequate include ‘just and reasonable,’ ‘public interest,’ ‘unreasonable obstruction to navigation,’ ‘reciprocally unequal and unreasonable,’ ‘public convenience, interest, or necessity,’ ‘tea of inferior quality,’ ‘unfair methods of competition,’ ‘reasonable variations,’ ‘unduly or unnecessarily complicate the structure’ of a holding company system or ‘unfairly or inequitably distribute voting power among security holders’”
- recognizing the importance of a separation of powers and holding that the State Board of Insurance was acting in a judicial capacity when it acted to approve a particular policy form
- holding that, on judicial review of an agency’s decision, the trial court is “without authority to substitute a nonstatutory standard for that prescribed by the statute”
- holding that trial de novo in administrative context requires retrial "as if no trial whatever has been had in the court below’’
Written by the judges who cited it.
The opinion
MR. JUSTICE GREENHILL,
joined by JUSTICE CULVER, concurring.
I agree that the trial de novo provisions of the statute are constitutional. But I disagree that the policy itself should be struck down because of oral representations or misrepresentations made by agents in connection with the selling of the policy. Any policy of insurance is capable of being misrepresented. And as I read it, this policy itself contains nothing which is illegal, which of itself is misleading or fraudulent, or which peculiarly lends itself to misrepresentation.
The Legislature has clothed the Board of Insurance with broad power in Article 21.21 of the Insurance Code to deal with and stop misrepresentations and false advertising made in connection with the sale of insurance policies. The Board is also given the power to call before it any person who is accused of deceptive acts or practices or unfair methods of competition in the business of insurance. It has authority to issue cease and desist orders to stop the objectionable practices. To me, this would have been the proper approach to the objectionable practices in this case.
*31 As originally introduced in the Legislature, Senate Bill 438, which became Article 3.42 of the Insurance Code, authorized the Board to disapprove a policy form “(d) If the purchase of such policy is being solicited by deceptive advertising.” This authority was deleted before enactment. This is evidence of legislative intent that misleading advertising and practices outside of the policy should be separately dealt with, and that the policy should be judged by its own terms.
I agree that misleading and deceptive practices should be stopped. I disagree only in the manner in which they should be stopped.