Certified Final Objection No. 144 of the

 

Joint Legislative Committee on Administrative Rules

 

            At its meeting on September 24, 2010, the Joint Legislative Committee on Administrative Rules (Committee) voted, pursuant to RSA 541-A:13, IV, to enter a preliminary objection to Final Proposal 2010-67 containing Ins 1700 of the Insurance Department (Department) relative to the New Hampshire Medical Malpractice Joint Underwriting Plan.  The Department responded pursuant to RSA 541-A:13, V(c) with a cover letter and amended rule from the Commissioner dated November 3, 2010. 

 

At its meeting on November 18, 2010, the Committee voted, pursuant to RSA 541-A:13, V(f), to enter a final objection to Final Proposal 2010-67.  The final objection has been filed with the Director of the Office of Legislative Services for publication in the New Hampshire Rulemaking Register.  The effect of a final objection is stated in RSA 541-A:13, VI:

 

     After a final objection by the committee to a provision of a rule is filed with the director under subparagraph V(f), the burden of proof thereafter shall be on the agency in any action for judicial review or for enforcement of the provision to establish that the part objected to is within the authority delegated to the agency, is consistent with the intent of the legislature, is in the public interest, or does not have a substantial economic impact not recognized in the fiscal impact statement.  If the agency fails to meet its burden of proof, the court shall declare the whole or portion of the rule objected to invalid.  The failure of the committee to object to a rule shall not be an implied legislative authorization of its substantive or procedural lawfulness.

 

            The following summarizes the bases for the Committee’s final objection.  The Committee’s preliminary objection was made after discussion in the Committee meetings of September 16 and September 24, 2010, and the final objection was made after discussion in the Committee meeting of November 18, 2010.  The final objection, where noted, was based on public comments and Committee staff annotations to proposed Ins 1700.  Copies of the Committee meeting transcripts and other relevant documents may be obtained from the Office of Legislative Services.

 

            Ins 1700

 

            1.  The Committee objected that, pursuant to Committee Rule 402.02(a) and Committee Rule 401.02, the proposed Chapter Ins 1700 authorizes the Commissioner to exercise a degree of management and decision-making authority regarding the operations of the New Hampshire Medical Malpractice Joint Underwriting Plan, currently the New Hampshire Medical Malpractice Joint Underwriting Association, which is contrary to legislative intent and beyond the agency’s authority, as noted in Committee staff annotations.

 

            The Committee discussed that the proposed Ins 1700 amends the language of the existing Ins 1700 to reflect the activities of the Commissioner under RSA 400-A:15 and RSA 404-C.  RSA 400-A:15 grants rulemaking authority to the Commissioner in broad language, and RSA 404-C grants the Commissioner authority to establish risk-sharing plans including medical malpractice insurance.  However, RSA 400-A:12 limits the Commissioner from being connected with the management of any insurer, and RSA 402:11-a withdraws the authority of the insurer to transact business in New Hampshire if the insurer is controlled in whole or in substantial part by a government agency. In the view of the Committee, it was unclear that all the rule amendments to the existing rule comported with the intent of the statutes and thus were within the authority of the Commissioner, given RSA 400-A:12 and RSA 402:11-a.

 

            In response to the preliminary objection, the Department had amended Ins 1703.02(a) and Ins 1704.01(a) in order to address the Committee’s concern.  However, the Committee made the final objection on the same grounds as in the preliminary objection.  Under Committee Rule 401.02, the Committee determined that the proposed Ins 1700 goes beyond the duties of the Commissioner under RSA 400-A:15 and RSA 404-C, given RSA 400-A:12 and RSA 402:11-a.  Under Committee Rule 402.02(a), the Committee also decided that the proposed Ins 1700 conflicts with the specific statutes RSA 400-A:12 and RSA 402:11-a.

 

            2.  The Committee objected that, pursuant to Committee rules 402.02(b)(2) and 403.01(d), the proposed Part Ins 1708 on termination and dissolution of the New Hampshire Medical Malpractice Joint Underwriting Plan is contrary to legislative intent and not in the public interest due to lack of clarity, as noted in Committee staff annotations, and, pursuant to Committee rule 404.01(a)(1), has a substantial economic impact not recognized in the fiscal impact statement.

 

            Ins 1708 addresses the termination and dissolution of the New Hampshire Medical Malpractice Joint Underwriting Plan (“Plan”).  The Final Proposal had stated that any plan of dissolution shall be adopted by rule pursuant to RSA 541-A.  In response to the Committee’s preliminary objection, the Department had amended Ins 1708 to indicate instead that the Commissioner’s order of termination and the plan of dissolution of the Plan shall be presented to the full General Court for review and approval, and neither the order nor the plan shall take effect until reviewed and approved by the General Court.  Under Committee Rule 403.01(d), the Committee found the amended language not clear and understandable as noted in Committee staff annotations.  Under Committee Rule 402.02(b)(2) the Committee determined the rule may therefore lead to rulemaking outside the process mandated by RSA 541-A.  The Committee also concluded, under Committee Rule 404.01(a)(1), that there was a substantial economic impact not recognized in the FIS. 

 

            3.  The Committee objected that, pursuant to Committee Rule 403.01(d), the proposed Ins 1700, based on public comments received at the time of the preliminary objection, is not in the public interest due to lack of clarity regarding “vested rights” and retrospectivity because Ins 1700 in the Committee’s view fails to acknowledge adequately the decision of the New Hampshire Supreme Court in Tuttle v. New Hampshire Medical Malpractice Joint Underwriting Association, 159 N.H. 627 (2010).

 

            In response to the Committee’s preliminary objection, the Department specified in Ins 1701.02 on the scope of Ins 1700 that the New Hampshire Medical Malpractice Joint Underwriting Plan would operate in accordance with the provisions of Ins 1700 and “state law, including the decision of the New Hampshire Supreme Court in Tuttle v. NH Medical Malpractice Joint Underwriting Association, 159 N.H. 627 (2010).”  In the Committee’s view, under Committee Rule 403.01(d), the proposed Ins 1700 was still not clear and understandable regarding vested rights and retrospectivity.