Appeal from the Order of the Department of Insurance in case of In Re: American Bankers Insurance Company of Florida, No. R-74-8-6.
William R. Balaban, with him Thomas R. Balaban, Robert J. Demer, and Shaffer, Calkins & Balaban, for appellant.
Gerald Gornish, Deputy Attorney General, with him John H. Isom, Assistant Attorney General and Andrew F. Giffin, Assistant Attorney General, for appellee.
President Judge Bowman and Judges Crumlish, Jr., Wilkinson, Jr., Mencer and Blatt. Judges Kramer and Rogers did not participate. Opinion by Judge Mencer.
[ 26 Pa. Commw. Page 190]
American Bankers Insurance Company of Florida (American) has appealed from an adjudication and order of the Insurance Commissioner (Commissioner) finding American in violation of Section 3 of The Fire, Marine and Inland Marine Rate Regulatory Act*fn1 and 31 Pa. Code § 112.5(6). One hundred and ten separate violations were found, and a penalty of $50 for each violation was assessed, for a total of $5,500.
American contends that the prosecutorial and adjudicatory functions of the Department of Insurance (Department) were insufficiently isolated from each other during the presentation of the case against it at the hearing below. This commingling of functions, American argues, acted to deprive it of procedural due process. We must agree with American and therefore reverse and remand.
American's objection is based on the fact that the Associate Chief Counsel of the Department was appointed a Deputy Insurance Commissioner for the purpose
[ 26 Pa. Commw. Page 191]
of acting as the hearing examiner at American's hearing before the Department. As a result of this appointment, the associate counsel who prosecuted the Department's case was the direct subordinate of the hearing examiner who must act in an impartial judicial capacity.
While there is no showing of actual bias or prejudice on the part of the hearing examiner in this case, such a showing is not necessary to establish a lack of procedural due process. Donnon v. Downingtown Civil Service Commission, 3 Pa. Commonwealth Ct. 366, 283 A.2d 92 (1971). Just as the substantive law is designed to prevent and restrain the excesses of persons, the procedural law is designed to prevent and restrain the excesses of governmental power. An administrative body, as well as a court, must avoid even the appearance of possible prejudice. Horn v. Township of Hilltown, 461 Pa. 745, 337 A.2d 858 (1975).
The Commissioner contends, rightly, that there is no evidence that the hearing examiner aided in any way in the preparation of the complaint or the prosecution. However, the Supreme Court has held that "[a] man cannot sit as judge when he is a member of a board which has brought the accusations." Gardner v. Repasky, 434 Pa. 126, 130, 252 A.2d 704, 706 (1969). In the case at bar, the hearing examiner was a member, in a supervisory capacity, of the office and staff who brought the accusations against American. Therefore, we believe the ruling in Repasky, supra, is equally applicable here.
At the hearing, the examiner was naturally called upon to rule upon the admissibility of evidence and the pertinence of objections. Finally, he was entrusted with drafting the adjudication. In State Board of Medical Education and Licensure v. Grumbles, 22 Pa. Commonwealth Ct. 74, 347 A.2d ...