Minnesota Discovers Limits To Its Regulator's Power Over Insurers

In Minnesota, the Commissioner of the Department of Commerce regulates the insurance industry, and he has a statutory right to conduct investigations "related to the duties and responsibilities entrusted to" him. Last month, in Matter of the Petition of the Property Casualty Insurers Association of America, Inc., 41 Minn. State Register 830 (Dec. 7, 2016), the state's Office of Administrative Hearings took up the question of just what those "duties and responsibilities" are. The Commissioner's position was that licensing a company to sell insurance in Minnesota makes any aspect of that company's business subject to his oversight. An Administrative Law Judge disagreed, ruling that the Commissioner's regulatory powers do not extend to practices beyond the sale of insurance products. The decision establishes an important basis for future challenges to regulatory overreach.