On appeal from a determination of the Commissioner of Insurance.
Allcorn, Seidman and Botter. The opinion of the court was delivered by Seidman, J.A.D.
This appeal involves a challenge to a schedule of interim rates and fees for title insurance approved by the Commissioner of Insurance on June 15, 1978. The contentions of appellants New Jersey Builders Association and New Jersey Realtors Association, and of the several intervenors who have joined them in opposition to the schedule, are essentially these: (1) that the Commissioner is without authority to adopt interim rates absent an emergency situation; (2) that the Commissioner, instead of approving submitted rates and fees, had promulgated his own in a manner contrary to his statutory authority; (3) that the Commissioner failed to hold a plenary hearing before approving the schedule; (4) that the regulation of fees charged by title insurance companies would violate the antitrust laws and constitute unauthorized practice of law, and (5) that the Commissioner's action in approving the schedule was not reasonably based on adequate findings.
The history of this litigation begins with the adoption of the Title Insurance Act of 1974, N.J.S.A. 17:46B-1 et seq. , which we described in N.J. Land Title Ins. Rating Bur. v. Sheeran , 151 N.J. Super. 45, 48 (App. Div. 1977), as representing "the first comprehensive regulation of title insurance companies doing business in this State, and which requires, among other things, that rates charged by such insurers comport with filed rate schedules which have been first approved by the Commissioner of Insurance." We related in that case the action taken by the Commissioner following the enactment of the statute:
In the meantime, and pursuant to N.J.S.A. 17:46B-46, the New Jersey Land Title Insurance Rating Bureau (Rating Bureau), appellant herein, was formed to represent 18 of the 20 title insurance companies doing business in New Jersey. Rating Bureau undertook the preparation of a rate schedule for its members, discussing its work in progress with representatives of the Department of Insurance during the summer and into the fall of 1975. Its first filing was made on October 20, technical revisions thereof were filed on October 22, and finally, on November 25, the day before the legislatively anticipated effective date of the filed rates, a substantial group of revisions was filed. Obviously the 24 hours remaining after the final filing could hardly have allowed the Commissioner to commence, no less complete, the thorough review contemplated by the act prior to his approval or disapproval of the filed rates. N.J.S.A. 17:46B-45. Accordingly, the Commissioner advised Title Bureau that although the rates were not and could not yet be approved, the title companies could nevertheless use the filed rates pending his further action. He also advised Rating Bureau that pursuant to the discretion accorded him by N.J.S.A. 17:46B-45(a), he would conduct a pre-approval public hearing on the filed rates, which as a matter of fact, represented a generally higher cost for title insurance than previously prevailed.
The public hearing commenced as scheduled on December 15, 1975. At its outset the Public Advocate, supported by other interested parties, applied to the Commissioner for suspension of the filed but not yet approved rates. The Commissioner, persuaded by the oral argument on that application, directed that
We affirmed the action taken by the Commissioner. Thereafter, the Rating Bureau suggested to the Commissioner that it was no longer practical to continue with the prior rates and proposed an interim rate structure to achieve "the broad purposes
of N.J.S.A. 17:46B-1 et seq. pending the institution of a statistical reporting system and the collection of data upon which the Commissioner of Insurance can predicate his approval of a 'permanent' rate schedule." In September 1976 the Commissioner solicited from all title insurance companies doing business in the State a "complete list of all rates, fees and charges used at the present time * * * for any and all coverages, endorsements and services, including any and all such charges made by each agent and subagent doing business with your company in New Jersey." An extensive reporting form was included. Upon receipt of the completed forms the Commissioner prepared and sent to all the parties herein a summary of the data contained therein and requested written comments with respect to it. He also forwarded to all parties in January 1978 his own version of an interim rate proposal, "so that you may make the Commissioner aware of any very serious problems which might arise in your view, if an interim rate proposal of this kind is adopted." He advised them, further, that "[t]he interim rates and charges would continue for approximately 2 I/2 years, during which a full two years of experience would be reported under a statistical plan."
Following a meeting in March to discuss the interim rate proposal, the Commissioner distributed a revised proposal, indicating in his forwarding letter that it required further refinement. Drafts of specific items were requested in preparation for the next meeting, which was held in April.
The Commissioner issued his interim rate order on June 15, 1978, effective July 1. It established a schedule of rates on which title insurance premiums were to be calculated, and of fees and charges for various underwriting services. The Rating Bureau informed the Commissioner that it had determined not to appeal the order, and that "[f]or purposes of complying with N.J.S.A. 17:46B-41 et seq., you may consider the schedule of interim rates and rating system rules attached to your Order as a filing made by the Bureau on
behalf of its members." The interim rate order was stayed pending the ...