Rulemaking or adjudication? Agencies should be able to choose

A California statute prohibits various unfair insurance practices, including the making of "misleading" statements. It provides that the Insurance Commissioner could sanction insurers for additional unfair practices through an adjudicatory process. This article answers the question that can the Commissioner use rulemaking rather than adjudication to identify additional unfair practices. In Association of California Insurance Companies v. Jones (ACIC), 185 Cal. Rptr. 3d 788 (2015), the Court of Appeal answered No to this question, holding that additional unfair practices could be identified only through adjudication. California Supreme Court review of the ACIC ruling. If it grants a hearing, the Court of Appeal decision would be vacated. Alternatively the Commissioner is also seeking a Supreme Court order to depublish the ACIC decision.