Paul Lightner sought to challenge the legitimacy of certain charges imposed upon him by Citifinancial and Triton for insurance products, including credit insurance, associated with a Citifinancial loan product. He alleged that the rates were excessive and unreasonable and that such charges are expressly prohibited by statute in West Virginia. Citifinancial claimed that, essentially, any charge whatsoever for credit insurance products is reasonable if the rate has been approved by the Insurance Commissioner of West Virginia. The Insurance Commissioner agreed after a proceeding in which Lightner was not afforded a hearing. Lightner appealed, contending he was entitled to a hearing and that any reasonably conducted hearing would reveal that the charges violated the law because of the extraordinary contrast between what West Virginians were being charged and what others around the country were paying.
Whether or not the Insurance Commissioner was required to afford Lighter a hearing on his insurance rate challenge and whether or not the results of the insurance commissioner proceeding without a hearing was correct.
This case is the third in a trilogy of cases which appear to vest extensive, and nigh-un-reviewable authority, over insurance ratemaking in the Office of the West Virginia Insurance Commissioner. The three cases began with State ex rel. Citifinancial v. Madden, 223 W.Va. 229, 672 S.E.2d 365 (2009), continue with Brickstreet v. Bunch, 231 W. Va. 321, 745 S.E.2d 212 (2013) and conclude in this case. In all three cases, West Virginia citizens or businesses challenged ratemaking activities of insurance companies in, citing statutes providing causes of actions and remedies in respect to the same. In Bunch and Lightner, the Insurance Commissioner's practice of denying such claimants a hearing was challenged.
The challenges were all turned aside. According to Syllabus Point 4 of Madden,
“The presumption of statutory compliance for approved insurance rates set forth in West Virginia Code § 33–6–30(c) (2002) (Repl.Vol.2006) may only be rebutted in a proceeding before the Insurance Commissioner.” Syllabus Point 4, State ex rel. CitiFinancial v. Madden, 223 W. Va. 229, 672 S.E.2d 365 (2008).
This syllabus point had appeared to leave open the prospect for challenging an excessive rate before the Commissioner. But after the Commissioner made it clear that it would not entertain any such challenges, by refusing the challengers any hearings and vigorously supporting the insurance carriers in the associated litigations (as the Court aptly put it at one point: "[t]he Commissioner echoes the Respondent insurance companies' arguments." Op. at 13), Paul Lightner challenged the process and the results in this Administrative Procedure Act appeal.
The Court ruled unanimously for the Commissioner, indicating that hearings are simply an option the Commissioner has and not a right a citizen may invoke, except in certain circumstances. Opinion at 13-17. That issue remains alive for those circumstances to present themselves one day however, as the Court stated:
"While this Court recognized in Bunch that there are instances involving an alleged deviation from approved rate filings where a factual dispute exists requiring an administrative hearing to be held, this case did not present any factual disputes warranting a hearing in this case."
Op. at 22.
In respect to the rates, the Commissioner and the Court indicated that the Commissioner's failure to establish a benchmark rate for the credit insurance products doomed Lightner's challenge to the rates he was charged. Op at 19-21.
The triad of cases, Citifinancial, Bunch and Lightner, certainly place a considerable amount of authority and trust in the Insurance Commissioner. Essentially, there are two sides to the coin, one prospective and one retrospective. Prospectively, where the Commissioner has not disapproved a rate, it appears that challenges to the rate are unlikely to succeed, no matter how excessive the rates may be in fact. Retrospectively, it appears that the challenge a citizen is permitted to make -- the one before the Insurance Commissioner, is fraught with difficulty because granting only a limited hearing or even no hearing at all is within the Commissioner's authority. Accordingly, for West Virginians desirous of protection from excessive insurance rates in a regulated monopoly, find that their recourse is limited to the political process by which the Commissioner is named and sharply curtailed in the courts of this State. This is an area where the Court is clearly signalling that it will not intervene.