Federal Life and Casualty Company

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IN THE MATTER OF FEDERAL LIFE AND CASUALTY COMPANY Docket 6812. Order and opinion, May, 1956 Interlocutory order reversing ruling of hearing examiner who limited scope of proceeding to states without regulating statutes, and returning the matter to him to determine whether insurance advertising activity beyond the reach of state regulation may be involved.

Before Mr. Frank Hwr hearing examiner.

Mr. J. W. Brookfield, Jr. and Mr. Donald K. King for the Commission.

Beaumont, Smith Harris of Detroit, Mich., for the respondent. ORDER GRANTIXG APPEAL FROM HEARING EXA):INER OIilER LIMITING SCOPE OF rROCEEDIXG Counsel in support of the complaint having filed an interlocutory appeal from a ruling of the hearing examiner limiting the scope of this proceeding to the respondent's advertising representations disseminated in the States of Rhode Island and Mississippi and in the District of Colmnbia; and The Commission having concluded, for the reasons set forth in its opinion in the matter of The American Hospital and Life Insurance Company, Docket o. 6237, issued April 24, 1956, that the examiner was in error in so ruling:

It is ordered That the appeal of counsel in support of the complaint , and it hereby is, gcanted.

It is furthe1' ordered That insofar as the hearing examiner s order of November 16, 1955, purports to limit the scope of this proceeding to advertising representations disseminated in Rhode Island, Mississippi and the District of Columbia, said order is hereby reversed. It is further ordered That the respondent's request for consideration of other alleged errors in the examiner s order, raised for the first time in the answering brief, be, and it hereby is, denied, Commissioners Gwynne and Mason dissenting in part and concurring in part.

JOINT OPINION OF CHAIRl\AN GWYN:! AND COMMISSIONER MASON DISSENTING IN PART AND COXCURING IN PART In AmfrWan Hospital and Life Insurance Oompany (Docket 6237) we stated our views as to the proper accommodation of federal-state authority over the insurance industry under the nnique conditions of FEDERAL LIFE AND CASUALTY CO. 1327 1326 Opinion the McCarran Insurance Act. We did not, however, on the record there presented, attempt to define the precise scope of federal power nor do we believe that such defil1ition could be accomplished in any single proceeding.

The hearing examiner found here that the respol1dent was licensed to sell insurance and did sell in all the states of the Union, except Montana and etah; that the business is handled through general agents in the states and respondent does not sell by mail; that in all but three jurisdictions, state regulating statutes did exist; that some of respondent's agents have used radio and television advertising in interstate commerce, sometimes ,,,ith and sometimes ,without respondent' s permission.

,V c believe that there 1nay be an area of insurance advertising activity in commerce-for example, radio or TV within the peculiar aegis of the federal government and effectively beyond the reach of date regulation.

1Ve would, therefore, return this proceeding to the hearing examiner for the limited purpose of identifying such commercial activity and determining the extent to which those practices may be condemned UlHler Section J of the Federal Trade COlnmission \ct. Before passing upon such a novel question, we believe that due administrative process requires full opportunity for counsel on both sides to brief the issue.

To this limited degree we concur in the order herein. 1328 FEDERAL TRADE COM.V!ISSION DECISIONS Complaint 52 F. T. C.