DC Appleseed Center for Law and Justice, Inc. v. District of Columbia Department of Insurance, Securities and Banking

Summary

The District of Columbia Court of Appeals reviewed orders of the District of Columbia Department of Insurance, Securities and Banking concerning Group Hospitalization and Medical Services, Inc.'s 2011 surplus. The court held that the agency had not adequately complied with the statutory requirement to coordinate its review with Maryland and Virginia and remanded for further proceedings. The opinion also addressed the applicability of a 2015 congressional charter amendment and related procedural and Commerce Clause issues.

Holdings

1. The 2015 amendment to GHMSI's charter does not apply to the determination or distribution of GHMSI's 2011 surplus because Congress expressly limited the amendment to surplus for years after 2011.
2. The requirement that DISB review GHMSI's surplus in coordination with other jurisdictions requires more than soliciting and considering their input, but it does not require unanimous agreement or deference to the other jurisdictions.
3. The Commissioner's coordination obligation applies to the substantive determinations resulting from the surplus review, including whether the surplus is excessive and what portion is attributable to the District, not merely to the procedural mechanics of review.
4. Objections to inadequate coordination before the December 2014 order were not preserved because they were not timely presented to the Commissioner.
5. DISB reasonably selected a 95 percent three-year confidence level and reasonably used a fixed surplus target rather than a range.
6. The equity-portfolio issue must be remanded because the Commissioner adopted DISB's expert approach without addressing Appleseed's specific objection that the calculations exaggerated the effect of potential equity losses.
7. The Commissioner may consider GHMSI's full, multijurisdictional operations when determining excess surplus and allocating a portion of that surplus to the District, but the attribution analysis was inadequately explained and must be reconsidered on remand.
8. On remand, the Commissioner must account for the requirement that formal agency adjudications be based on matters contained in the official administrative record.
9. The court did not decide the specific Commerce Clause challenge or disputes over the appropriate form of community-health reinvestment because those issues were inadequately developed or might change on remand.

Questions Presented

1. Whether the 2015 congressional amendment to GHMSI's charter applied to the determination and distribution of GHMSI's 2011 surplus.
2. What the statutory requirement that DISB review GHMSI's surplus in coordination with Maryland and Virginia requires.
3. Whether DISB adequately coordinated its review with Maryland and Virginia and adequately placed relevant coordination matters on the administrative record.
4. Whether DISB's selection of a 95 percent three-year confidence level and a fixed surplus target was reasonable and adequately explained.
5. Whether DISB adequately addressed Appleseed's objection to the treatment of GHMSI's equity portfolio in the actuarial analysis.
6. Whether DISB adequately explained its method for attributing excess surplus to the District.
7. Whether DISB adequately explained GHMSI's projected premium growth rate and whether it was permissible to assess the reasonableness of the 2011 surplus based on information available at the time rather than hindsight.
8. Whether the orders violated the Commerce Clause.
9. Whether DISB was required to address Appleseed's requests for reimbursement of actuarial fees and prejudgment interest.

Disposition

reversed_and_remanded