Original jurisdiction in case of Pennsylvania Association of Life Underwriters, Robert B. Jacoby, CLU, Robert Seiler, Ernest M. Boll, CLU, James W. Shindler, George G. Pote, CLU, John D. Hopper, CLU, and James A. Pellow, CLU, v. Commonwealth of Pennsylvania, Department of Insurance, William J. Sheppard, Insurance Commissioner.
Robert J. Demer, with him Thomas R. Balaban, William R. Balaban, and Shaffer, Calkins & Balaban, for plaintiffs.
John H. Isom, Assistant Attorney General, with him Guy J. DePasquale, Assistant Attorney General, and Robert P. Kane, Attorney General, for defendant.
President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Mencer, Rogers and Blatt. Opinion by Judge Blatt.
[ 29 Pa. Commw. Page 460]
The Pennsylvania Insurance Commissioner promulgated certain regulations, entitled Disclosures in Solicitations of Life Insurance, found at 31 Pa. Code § 83, and stated as authority for such regulations The Insurance Unfair Practices Act.*fn1 The Pennsylvania Association of Life Underwriters and certain individuals (plaintiffs) filed a complaint in equity within our original jurisdiction which challenged the Commissioner's authority to promulgate these regulations and which sought to permanently restrain the Commissioner from enforcing them. Because there are no issues of material fact to be resolved, the plaintiffs have moved for judgment on the pleadings and, we, therefore, are concerned here with the legal issue of whether or not the Commissioner had authority to promulgate these regulations.
[ 29 Pa. Commw. Page 461]
[t]he authority of a public administrative agency ordinarily includes the power to make or adopt rules and regulations with respect to matters within the province of such agency, provided such rules and regulations are not inconsistent with law. In exercising its power, an administrative body may adopt or make only such rules and regulations as are necessary and reasonable, and it may not act arbitrarily. While an administrative agency ordinarily may adopt and follow a regulatory policy with respect to matters within its administrative discretion, the exercise of such discretion is not without some limitation, and no declared regulatory policy of an administrative policy [sic] may preclude the future exercise of its functions as an administrative agency of the Legislature.
The exercise by an administrative agency of its rule-making function is subject to limitations arising from the fact that its authority is a delegated power. The power of such an agency to prescribe rules and regulations under a statute is only a power to adopt regulations to carry into effect the will of the Legislature as expressed by statute. Administrative agencies are not empowered to make rules and regulations which are violative of or exceed the powers given them by the statutes and the law, but must keep within the bounds of their statutory authority in the promulgation of general rules and orders.
1 Pennsylvania Law Encyclopedia, Administrative Law and Procedure, Chp. 2, § 32 at 281-282.
It is clear that there are two types of administrative rule-making power; ...