Aetna v. Wisconsin Insurance Commissioner

  • 1980 - SOA - The Wisconsin Imbroglio, Society of Actuaries - 3p
    • Ed. Note: Several Society members testified in a recent lawsuit in which 14 stock life companies and two field men’s groups sought to prevent Wisconsin’s Insurance Commissioner from requiring that buyers be given
      • (1) a preliminary policy summary that displays the policy’s Surrender Cost Index (SCI) but not its Net Payment Cost Index (NPCI) nor its Equivalent Level Annual Dividend (ELAD) , and
      • (2) a buyer’s guide that describes these figures in a manner objectionable to these plaintiffs.
    • We invited those actuaries to send along concise statements. The letter (P) or (D) denotes a speaker for the Plaintiffs or for the Defendant. The Plaintiffs won the case; the Defendant plans to appeal.
  • 1981 - LC - Aetna Life Ins. Co. v. Mitchell - law.justia.com/cases/wisconsin/supreme-court/1981/80-518-9.html
    • [BT notes april 2016 part 2]
    • 101 Wis. 2d 90
    • 303 N.W.2d 639
    • 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.
    • It is for the Commissioner, not this court, to choose which *141 experts to believe and to predict consumer needs.
    • 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.
    • At this time there is no magical formula that will assure that the consumer understands the cost of the policy.
    • 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. The case was originally assigned to Judge Sachtjen. The record does not disclose why the case was transferred to Reserve Judge Jackman after remand.
    • [4] Sec. 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;

       

      "(g) To maintain freedom of contract and freedom of enterprise so far as consistent with the

      other purposes of the law;

       

      To keep the public informed on insurance matters;

       

      22] Since 1972 the rules have required disclosure of the Surrender Cost Index to the

      consumer after the policy is purchased

      [24] ". . . The question of whether a label, otherwise not misleading, provides adequate

      information is not therefore a matter of statutory construction

       

      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.

       

      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.

      http://ourlivesmadison.com/article/jurist-prudes-from-the-past/

      https://courts.countyofdane.com/judges/Archive

  • 1979-1981 - LC - Aetna v Wisconsin Insurance Commissioner  ---  [BonkNote]
    • 1979 - LC - Aetna Life Ins. Co. v. Wisconsin Insurance Commissioner, Harold Wilde - Court of Appeals
      • District Four, February 28, 1979, No. 79-001, 90 Wis. 2d 861 | 279 N.W.2d 509
    • 1981 - LC - Aetna v. Wisconsin Insurance Commissioner, Susan Mitchell - Supreme Court
      • Argued January 7, 1981 — Decided March 31, 1981
      • 303 N.W.2d 639 (Wis. 1981)
      • 1981 - ACLI - Amicus Curiae Brief - LC - Aetna v. Wisconsin Insurance Commissioner, Susan Mitchell - 28p
        • (p10) - Failure to disclose the magnitude of these important nonguaranteed elements of a life insurance policy can clearly mislead the purchaser.
        • (p10) - The trial court found that Rule INS. 2 .14 (4) (a) requiring delivery to consumers of a Summary and a Buyer's Guide, compelled delivery of false and misleading information to the consumer, contrary to §628. 34(1) (a), Wis Stats. The decision of the trial court should be affirmed. 
        • (p11) - Moreover, competition is further restricted by any system which discourages innovation, l. .e., the design of new products for the marketplace. 
      • 1981 - NAIC - Amicus Curiae Brief - LC - Aetna v. - Wisconsin Insurance Commissioner, Susan Mitchell - 
      • law.justia.com/cases/wisconsin/supreme-court/1981/80-518-9.html
      •  - GoogleScholar - [link]
        • On December 15, 1978, shortly before the January 1, 1979 effective date of Commissioner Wilde's rule, Aetna Life Insurance Company (Aetna) and others,[4] the respondents, commenced an action pursuant to sec. 227.05 (1), Stats....
      • 1981 0331 - LC - Aetna v. Wisconsin Insurance Commissioner, Susan Mitchell - Supreme Court - No. 80518 - Opinion - casetext.com/case/aetna-life-ins-co-v-mitchell
  • 1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p
  • What has happened in the past 2 years-even more than 2 years-in the life insurance industry has been very dramatic.
  • The products have changed considerably, mainly because of high inflation.
    • There are new products now that offer money market rates on the cash value portion of the so-called traditional whole life policy and that blows apart the old disclosure system.
    • The old indices do not accommodate that kind of product. In fact, that even came up in the trial 2 years ago vis-a-vis my proposed system.
  • The Aetna, one of the plaintiffs in the trial, argued that the current cost disclosure indices would not be suitable for their Econo-master policy which has variable aspects to it.
    • So I think that the NAIC is going to have to relook at the whole issue of life cost disclosure.
    • It is an issue that will not go away.
    • ⇒  As long as the internal benefits of a policy are not reflected in the premium, people need help in measuring those benefits.
    • ⇒  That is, in a nutshell, what cost disclosure systems have tried to do. (p10-11)

--  Susan Mitchell, Wisconsin Commissioner of Insurance

1981 0921 - GOV (House) - Insurance Agent Commission Deregulation, John LaFalce (D-NY) - PDF-109p-GooglePlay, VIDEO-?]

  • Any administrative rule requiring dissemination of cost disclosure information that is misleading due to incompleteness is beyond the scope of the insurance commissioner's authority in that it violates sub. (1) (a). Aetna Life Insurance Co. v. Mitchell, 101 Wis. 2d 90, 303 N.W.2d 639 (1981).

docs.legis.wisconsin.gov/statutes/statutes/628/III/345/4/b

Aetna v Mitchell NP 2
  • The Buyer's Guide and the Policy Summary required to be delivered prior to sale emphasized the necessity of comparing the policies with the Surrender Cost Index (SCI) as a means of comparative shopping to aid in determining the lowest cost policy.

1981 0331 - LC - Aetna v Mitchell, Wisconsin Insurance Commissioner - Supreme Court - No. 80518 - Opinion - casetext.com/case/aetna-life-ins-co-v-mitchell

  • 1981 - SOA - Individual Life Insurance Cost Disclosure Issues, Society of Actuaries - 22p