Credit Ins. Gen. Agents Assn. v. Payne

In Credit Ins. Gen. Agents Assn. v. Payne (1976) 16 Cal.3d 651, the Supreme Court upheld the Commissioner's authority to limit the amount of compensation paid to agents in the sale of credit life and credit disability insurance. In Payne, the Supreme Court primarily addressed the necessity of the regulation--finding that the administrative record supported the Commissioner. As noted ante, the Associations have not attacked the Regulation on necessity grounds. The Payne court observed that under statutes governing credit insurance, the Legislature evidenced its intent to "grant the commissioner broad discretion to determine what reasonable rules and regulations in the area of credit insurance are necessary to promote the public welfare." (Payne, supra, 16 Cal.3d at p. 656.) The Commissioner had authority to promulgate the regulation because the credit insurance statutes gave the Commissioner power under section 779.21 to adopt regulations "'as may be necessary to carry out the provisions of the article relating to credit insurance,'" and under section 779.9 to disapprove a credit insurance form if it contains provisions that are "'unjust, unfair, inequitable, misleading, deceptive ... or are contrary to any provision of the Insurance Code or of any rule or regulation promulgated thereunder.'" (Payne, at p. 656.)