State Farm Mut. Auto. Ins. Co. v. Barnes
In State Farm Mut. Auto. Ins. Co. v. Barnes, 41 Colo.App. 380, 383, 585 P.2d 929, 931 (1978), the Colorado Appeals Court found that the State Insurance Commissioner had exceeded his statutory authority by approving a rate increase under the conditions of a fixed profit ceiling by requiring State Farm to hold in trust all net underwriting profits over six point four percent (6.4%).
Although the Colorado court found that the agency had overstepped its statutorily authorized jurisdiction, the court went on to explain that "powers not expressly granted to a regulatory agency will be implied only if such powers are necessary in order to achieve the objectives of the statute...and if the implied power is exercised in a reasonable manner." Id.
The court determined that there was no necessity for the Commissioner to impose a fixed profit ceiling upon State Farm and therefore the action did not fall under powers implied statutorily. Id.