Could Maryland's new commercial-insurance backstop pool cover nurse-midwives for malpractice even though the law setting it up said it didn't apply to medical malpractice insurance?

Plain-English summary

The Insurance Commissioner asked the Attorney General to sort out three tangled questions about Maryland's brand-new Commercial Casualty Underwriting Association ("CCUA"), created by Chapter 663 of the Laws of Maryland 1986 as a market of last resort for businesses that could not otherwise buy commercial casualty insurance. First, the law let the Commissioner activate a nurse-midwife insurance subpool within the CCUA, yet a separate section said the CCUA law did not apply to medical malpractice insurance at all, an apparent contradiction. Second, the statute was unclear about whether assessments charged to member insurers to fund the CCUA should be based on all their commercial casualty premiums or only some of them. Third, it was unclear which of two different judicial review standards applied to different kinds of Insurance Commissioner decisions under the new law.

The opinion resolved the nurse-midwife conflict by concluding that the General Assembly's specific mention of nurse-midwives in one section outweighed the law's general exclusion of malpractice insurance, especially given that the legislature acted after nurse-midwives lost their private malpractice coverage in an insurance-market crisis and specifically asked to be included. On assessments, the opinion concluded premiums from property, malpractice, auto, and workers' compensation insurance had to be excluded from the base used to charge member insurers, matching how the CCUA's own recoupment mechanism and two sister insurance pools worked. On judicial review, the opinion drew a line between the Commissioner's broad, policy-type decisions (reviewed under the more deferential standard) and case-specific coverage-denial decisions affecting a single business (reviewed under the standard used for more fact-focused, individualized rulings).

Currency note

This opinion was issued in 1986. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why would Maryland create a special malpractice insurance option for nurse-midwives inside a law that said it didn't cover malpractice insurance at all?
The opinion explained that nurse-midwives had lost their private malpractice coverage in a 1985 insurance-market crisis and could not afford the rates offered to physicians, so the legislature specifically wrote them into the new CCUA law even though the law generally excluded malpractice insurance, and the opinion concluded that specific inclusion controlled over the general exclusion.

When Maryland calculated how much each insurance company had to pay to support the new CCUA pool, did that calculation include premiums from car insurance or workers' compensation policies?
No. The opinion concluded that premiums attributable to property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance had to be excluded from the assessment base, consistent with how the CCUA's recoupment mechanism and two similar Maryland insurance pools operated.

If a business was denied coverage by the CCUA, did it get the same kind of court appeal as when the Insurance Commissioner set broad policy for the whole program?
No, according to the opinion. A single business's coverage-denial appeal was reviewed under the same standard used for individualized, fact-based agency decisions, while broader determinations, like whether a whole insurance line was unavailable in the market, were reviewed under a more deferential standard reserved for the Commissioner's broader, policy-type decisions.

Background and statutory framework

Chapter 663 of the Laws of Maryland 1986 created the CCUA as a residual market mechanism, made up of all insurers licensed to write commercial casualty policies in Maryland, to make coverage available when the Commissioner found, after a hearing, that a "subpool" of businesses could not get commercial casualty insurance and that the lack of coverage threatened their operations and the general welfare. The law let the Commissioner require the CCUA to activate certain listed subpools, including nurse-midwives, but separately excluded property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance from the Act altogether, reasoning that those lines already had their own residual-market mechanisms elsewhere in Maryland law (the Maryland Joint Insurance Association, the Medical Mutual Liability Insurance Society, the Maryland Automobile Insurance Fund, and the State Accident Fund).

The opinion reconciled the nurse-midwife provision with the malpractice exclusion by looking at the legislative history: written testimony to the Senate Finance Committee described how nurse-midwives' malpractice carrier withdrew from the Maryland market in 1985, leaving them unable to obtain coverage from roughly twenty other carriers despite earning a fraction of physicians' salaries, and the CCUA bill specifically responded to that crisis. Applying the rule that a specific statutory provision controls over an inconsistent general one, the opinion concluded the CCUA could issue nurse-midwife malpractice coverage. On the assessment question, the opinion harmonized the general premium-base language with the narrower recoupment provision and with the parallel structure of the Maryland Joint Insurance Association and the Professional and Executive Liability Fund, both of which used matching assessment and recoupment bases. On judicial review, the opinion applied Court of Appeals precedent distinguishing quasi-legislative decisions (based on general facts affecting the public, reviewed under Article 48A's §242B rate-regulation standard) from quasi-judicial decisions (based on facts about a specific party in an adversarial proceeding, reviewed under §40), concluding that individual coverage-denial appeals under §606(b) were quasi-judicial while the Commissioner's market-unavailability findings and Board of Governors appeals under §602(a) and §604(a)(2) were quasi-legislative.

Citations

Statutes:

• Article 48A, §599(1), §600(k), and §601(a)(1), (d), (e)(1), (f), (i)(1), (j)(1), and (k)(2)(i) (CCUA creation, purpose, membership, and assessment/recoupment mechanics)
• Article 48A, §602(a), (b), (b)(1), (b)(2), and (b)(7) (subpool activation criteria and nurse-midwife subpool)
• Article 48A, §604(a)(2) and (b) (appeals from Board of Governors decisions; general judicial review provision)
• Article 48A, §606(a) and (b), (b)(1) (denial of coverage to a commercial entity and its appeal route)
• Article 48A, §607 (exclusion of property, malpractice, auto, and workers' compensation insurance)
• Article 48A, §40 and §242B (the two judicial review standards at issue)
• Article 48A, §478B(5), §478C(3), and §478C(9) (Maryland Joint Insurance Association assessment and recoupment structure)
• Article 48A, §549(e) and §554 (Medical Mutual's extension to "other health care providers" including nurse-midwives)
• Article 48A, §559(h), §560(c), and §561(d) (Professional and Executive Liability Fund assessment and recoupment structure)
• Chapter 663 (Senate Bill 379), Laws of Maryland 1986 (enacting the CCUA)
• Chapter 129, Laws of Maryland 1985 (extending Medical Mutual to other health care providers)
• Article 101, §§70-84 (State Accident Fund, the workers' compensation residual market)
• Article 8 of the Maryland Declaration of Rights (separation of powers basis for the two judicial review standards)

Cases:

• Vournas v. Montgomery County, 300 Md. 123, 128 (1984)
• City of Baltimore v. Hackley, 300 Md. 277, 283 (1984)
• Lumberman's Mut. Casualty Co. v. Insurance Comm'r, 302 Md. 248, 268 (1985)
• A.S. Abell Pub. Co. v. Mezzanote, 297 Md. 26, 40 (1983)
• Maguire v. State, 192 Md. 615, 623 (1949)
• Bridges v. Nicely, 304 Md. 1, 10 (1985)
• Schweitzer v. Brewer, 280 Md. 430, 438 (1977)
• Supervisor of Assessments v. Sloan, 57 Md. App. 286, 293 (1984)
• Bledsoe v. Bledsoe, 294 Md. 183, 189 (1982)
• McClurkin v. Maldonado, 304 Md. 225, 233 (1985)
• Kindley v. Governor of Maryland, 289 Md. 620, 625 (1981)
• State Ins. Comm'r v. National Bureau of Casualty Underwriters, 248 Md. 292, 303-04 (1967)
• Baltimore Gas and Elec. Co. v. McQuaid, 220 Md. 373, 382 (1959)
• Maryland Fire Underwriters Rating Bureau v. Insurance Comm'r, 260 Md. 258, 263-64 (1971)
• Katz v. Insurance Comm'r, 53 Md. App. 420, 425 (1983)
• Department of Natural Resources v. Linchester Sand & Gravel Corp., 274 Md. 211 (1975)
• Montgomery County v. Woodward & Lothrop, Inc., 280 Md. 686, 711-12 (1977)
• Hyson v. Montgomery County Council, 242 Md. 55, 64-65 (1966)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1986/Volume71_1986.pdf

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

INSURANCE

Commercial Casualty Underwriting Association-Malpractice Insurance For Nurse Midwives-Calculation Of Assessments-Nature Of Judicial Review.

August 6, 1986

The Honorable Edward J. Muhl
Insurance Commissioner

You have requested our opinion concerning the construction of certain provisions of Chapter 663 (Senate Bill 379), Laws of Maryland 1986. Chapter 663 adds a new Subtitle 43, the Commercial Casualty Underwriting Association Act, to the Insurance Code, Article 48A of the Maryland Code.1 The Act provides for the creation of a Commercial Casualty Underwriting Association ("CCUA" or "Association").

Specifically, you have posed the following questions:

1. If the CCUA is directed to activate a subpool for nurse-midwives, pursuant to §602(b)(2), may the Association issue malpractice insurance to nurse-midwives, in light of the provision in §607 that the Act does not apply to medical malpractice insurance?

2. In determining the assessment to be levied against member insurers to support the CCUA, should the Association base its calculations on (i) premiums attributable to all commercial casualty insurance policies issued in this State or (ii) only those premiums attributable to commercial casualty policies other than property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance?

3. Which judicial review provisions, those in §40 or in §242B, apply to decisions of the Insurance Commissioner ("Commissioner") under §§602(a), 604(a)(2) and 606(b)(1)?

For the reasons set forth below, we conclude as follows:

1. The CCUA may issue malpractice insurance to nurse-midwives upon the activation of that subpool.

2. The premium base upon which assessments are calculated should exclude premiums attributable to policies of property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance.

3. Appeals from the quasi-legislative decisions of the Commissioner under §§602(a) and 604(a)(2) are subject to judicial review in accordance with §242B, while appeals from the quasi-judicial decisions of the Commissioner under §606(b)(1) are subject to judicial review in accordance with §40.

I
Overview of Chapter 663

Chapter 663 of the Laws of Maryland 1986 provides for the creation of the CCUA, consisting of all insurers licensed to write commercial casualty policies in the State of Maryland. §601(a)(1). The Association is designed to act as a residual market mechanism to "make certain commercial casualty insurance available to all qualified applicants." §599(1). The Act provides the following criteria for coverage by the Association:

"The Association shall issue policies of insurance only if, after a hearing, the Commissioner finds that commercial casualty insurance is unavailable for a particular subpool and that:

(1) A substantial number of commercial entities within any subpool are or within 6 months will be unable to obtain commercial casualty insurance from an insurer authorized to do business in this State or an approved surplus line insurer;

(2) The lack of commercial casualty insurance severely hampers the operation of the commercial entities in this subpool;

(3) The lack of commercial casualty insurance will cause a substantial number of commercial entities in the subpool to cease operations in this State; and

(4) The cessation of operation of a substantial number of commercial entities in a subpool will be detrimental to the general welfare of the citizens of this State." §602(a).

The Commissioner has broad authority to designate subpools. §602(b)(7). The Act also expressly identifies certain subpools that "the Commissioner may require the association to activate," including licensed nurse-midwives. §602(b)(1) through (6).

However, several specified lines of casualty insurance are excluded from the Act by §607:

"This subtitle does not apply to:
(1) Property and homeowner's insurance;
(2) Medical malpractice insurance;
(3) Motor vehicle insurance; and
(4) Workers' compensation insurance."

II
Malpractice Insurance for Nurse-Midwives

As noted in Part I above, the Insurance Commissioner has specific authority to require the CCUA to activate a subpool composed of "[n]urse-midwives licensed under Title 7, Subtitle 6 of the Health-Occupations Article." §602(b)(2). However, §607(2) provides that the Act does not apply to "[m]edical malpractice insurance." In order to reconcile these apparently conflicting provisions in a manner that effectuates the General Assembly's intent, we examine the Act in its entirety, consider the circumstances surrounding its enactment, and apply established rules of statutory construction.

Property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance are each excluded from the Act by §607. It is reasonable to conclude that these lines of insurance were excluded because a residual market mechanism has already been created for them, namely, the Maryland Joint Insurance Association, for essential property insurance (Subtitle 27A); the Medical Mutual Liability Insurance Society of Maryland ("Medical Mutual"), for medical malpractice insurance (Subtitle 36); the Maryland Automobile Insurance Fund, for motor vehicle insurance (Subtitle 16A); and the State Accident Fund, for workers' compensation insurance (Article 101, §§70-84).

Until July 1, 1985, Medical Mutual was authorized to provide medical malpractice insurance to physicians only. Chapter 129 of the Laws of Maryland 1985 extended its reach to "other health care providers," defined as persons "licensed or authorized to practice a health occupation." See §§549(e) and 554. Nurse-midwives are licensed pursuant to Title 7 of the Health Occupations Article and, therefore, come within the definition of "other health care providers." Accordingly, Medical Mutual provides an alternative to the private medical malpractice insurance market for nurse-midwives in Maryland. Under these circumstances, it is initially puzzling as to why the General Assembly specifically provided, in §602(b)(2), that the Insurance Commissioner may activate a subpool of insurance for nurse-midwives.2

When a statute is ambiguous, "the circumstances existing and events occurring at the time of the statute's enactment may be considered." Vournas v. Montgomery County, 300 Md. 123, 128 (1984). Therefore, we turn to what the General Assembly considered when it enacted Chapter 663.

Written testimony by the Maryland Chapter of the American College of Nurse-Midwives to the Senate Finance Committee recounts the insurance crisis that hit nurse-midwives in the summer of 1985. Letter from Kathleen Slone, CNM, to Chairman Dennis Rasmussen (February 6, 1986). At that time, the insurer that had provided their medical malpractice insurance pulled out of the market altogether. Unable to obtain coverage from some twenty other carriers, nurse-midwives urgently asked the General Assembly to include them in the provisions of the CCUA legislation. They explained that, since nurse-midwives' salaries are only one-fourth the average for obstetricians and gynecologists nationally, they are not able to afford the level of insurance offered to their physician colleagues. With these circumstances as backdrop, the General Assembly enacted Chapter 663 and specifically included nurse-midwives within its scope.

It is clear that the General Assembly meant to provide a market specifically for nurse-midwives in the CCUA. Regardless of the fact that the Act generally does not apply to medical malpractice insurance and that Medical Mutual already covers nurse-midwives, the General Assembly specifically addresses nurse-midwives in §602(b)(2). The Court of Appeals has consistently held that a specific enactment prevails over an incompatible general enactment in the same or another statute. See, e.g., Lumberman's Mut. Casualty Co. v. Insurance Comm'r, 302 Md. 248, 268 (1985); A.S. Abell Pub. Co. v. Mezzanote, 297 Md. 26, 40 (1983); Maguire v. State, 192 Md. 615, 623 (1949). Therefore, we conclude that the CCUA is legally permitted to issue medical malpractice insurance to nurse-midwives.

III
Assessment Base

Section 601(d) provides that "[e]ach member insurer [of the CCUA] shall participate in the expenses and losses of the Association in the proportion that the member insurer's premiums written bear to the aggregate premiums written by all members of the Association." "Premiums written" is broadly defined in §600(k) to mean "gross direct premiums charged during the second preceding calendar year with respect to commercial casualty insurance policies in this State and the general casualty components of commercial multiperil policies," less certain amounts returned or paid out to policyholders.

Neither §600(k) nor §601(d) expressly excludes from this calculation premiums collected as a result of the issuance of property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance. However, when member insurers are permitted to recoup the expenses for the support of the CCUA, premiums written by CCUA members for insurance other than property and homeowner's, medical malpractice, motor vehicle and workers' compensation are calculated for the purposes of recoupment. §601(k)(2)(i).

In light of these discordant provisions, you have asked whether the CCUA should assess member insurers based upon "premiums written" excluding, or including, premiums for property and homeowner's, medical malpractice, motor vehicle and workers' compensation insurance.

On their face, §§601(d) and 600(k) appear to give the CCUA authority to assess member insurers based upon premiums written for all commercial casualty policies, notwithstanding the limitations on recoupment embodied in §601(k)(2)(i). However, such a construction would produce an illogical and inequitable result and appears to conflict with the legislative intent.3

As evidenced by the exclusion in §607, the General Assembly intended to take the four listed kinds of insurance out of the commercial casualty assessment mechanism. In our view, the provisions of §§600(k) and 601(d) should be read in conjunction with the exemption language in §607. This reading would harmonize those sections with the recoupment provision, because premiums written on property and homeowner's, medical malpractice, motor vehicle, and workers' compensation policies would then be exempt from the CCUA's assessment base as well as from its recoupment mechanism. The intention as to any one part of a statute may be found by reading all the parts together. See Bridges v. Nicely, 304 Md. 1, 10 (1985); Schweitzer v. Brewer, 280 Md. 430, 438 (1977); Supervisor of Assessments v. Sloan, 57 Md. App. 286, 293 (1984).

Material in the legislative history supports this construction. See Bledsoe v. Bledsoe, 294 Md. 183, 189 (1982) (approving the use of committee reports and other extrinsic aids to determine legislative intent). The Floor Statement to Senate Bill 379 comments that Amendment No. 11, which added §601 to the bill, provides for the assessment of losses to all commercial casualty insurers "with certain exceptions." What those exceptions are is made clear by the legislative notes on Senate Amendment No. 3. Those notes explicitly state that the purpose of Amendment No. 3 is to exempt workers' compensation from the CCUA's assessment base. In explaining this legislative action, the note explains that workers' compensation already has a residual market (the State Accident Fund) and that this is the same justification for exempting personal lines and medical malpractice from assessments under the bill. These notes from the legislative files support the proposition that the General Assembly intended to exempt the lines of insurance itemized in §607 from the CCUA's assessment base.

Further insight into the legislative intent underlying the Act can be gleaned from an examination of the structure of the Maryland Joint Insurance Association ("JIA"), established pursuant to Subtitle 27A, and the Professional and Executive Liability Fund ("PELF"), established pursuant to Subtitle 37. These residual market mechanisms have purposes similar to those of the CCUA and are strikingly alike in structure, so it is logical to assume that the CCUA legislation was modeled after the JIA and the PELF and that the General Assembly's intent with regard to all three was similar.

Both the JIA and the PELF have equivalent assessment and recoupment bases. Section 478C(3) provides that, with respect to the JIA, each member insurer shall participate in the expenses and losses of the JIA in the proportion that its premiums written bear to the aggregate premiums written by all JIA members. "Premiums written" is defined in §478B(5) to include only premiums charged with respect to essential property insurance and the essential property insurance components of multiperil policies. Thus, the assessment calculation is based upon only those premiums attributable to essential property insurance policies that the JIA is authorized to issue.

The JIA's recoupment base is similarly restricted. Section 478C(9) provides in pertinent part that, to recoup loss and expense assessments, the JIA's plan of operation shall provide for the addition of surcharge or rating factors to be added to premiums for essential property insurance and homeowner's insurance covering property located in this State.

The PELF likewise operates with symmetrical bases for assessment of losses and expenses and recoupment. As with the CCUA and the JIA, member insurers participate in PELF's expenses and losses in the proportion that their premiums written on certain lines of insurance bear to the aggregate premiums written on those lines of insurance by all PELF members. §560(c). "Premiums written" is defined in §559(h) to include only premiums charged with respect to general liability insurance policies in this State and the general liability components of multiperil policies. Section 561(d) provides for the direct recoupment of any assessments from the policyholders of any subpool which the Insurance Commissioner has activated.

In essence, the assessment and recoupment provisions of the JIA and the PELF are aimed at producing a wash: Policyholders who benefit from the issuance of policies by either group bear the cost of expenses and losses, which are passed through to them by each member insurer. Accordingly, one can reasonably assume that the General Assembly intended to create the same parity between the assessment base and the recoupment base when it established the CCUA.

IV
Judicial Review of Commissioner Decisions Under Chapter 663

A. Introduction

Orders, decisions, and findings of the Commissioner pertaining to the operation of the CCUA are subject to judicial review. You have inquired specifically about the nature of judicial review of the following kinds of decisions under the Act:

(1) a finding, under §602(a), that commercial casualty insurance is unavailable for a particular subpool;

(2) a requirement, in an order issued under §602(a), that one or more of the subpools specified in §602(b) be activated;

(3) an order, under §604(a)(2), upholding or reversing a decision of the Board of Governors of the Association; and

(4) a decision, under §606(b)(1), to uphold or reverse Association's denial of insurance to a commercial entity.

Section 604(b) provides that "[a]ll orders, decisions, and findings of the Commissioner made under this subtitle are subject to judicial review in accordance with §242B of this Article." Section 242B, in turn, sets forth the scope of judicial review of decisions of the Commissioner made under Subtitle 16, titled Rates and Rating Organizations.

However, §606(b) provides that a commercial entity denied insurance by the Association may appeal that decision to the Commissioner and may request a hearing "under §§35 through 40" of the Insurance Code. Section 40 prescribes the procedures for judicial review of the Commissioner's decisions made after a quasi-judicial hearing.

B. Judicial Review of Quasi-Legislative and Quasi-Judicial Decisions

The difference in judicial review turns on the nature of the underlying decision:

"The 1963 revision [of the Insurance Code] provided two types of judicial review from actions of the Insurance Commissioner. One under §40 of Art. 48A was from actions in which the Commissioner acted in 'a quasi-judicial capacity,' as §39 put it, the other, under [§242B(2), then §245] for judicial review of the legislative orders and decisions as to rates and rating organizations. On an appeal from a judicial or quasi-judicial action under §40(4), the court is directed to 'hear the matter de novo' on the record and any additional evidence offered in court, and decide whether the action appealed from was unconstitutional, unlawful or unsupported by competent, material and substantial evidence or by the weight of such evidence, as shown by the whole record and the de novo evidence taken in court." State Ins. Comm'r v. National Bureau of Casualty Underwriters, 248 Md. 292, 303-04 (1967).

Conversely, the Court of Appeals noted, §242B(2) [then §245] "shows in its terms that a different standard was intended in an appeal from a legislative action." 248 Md. at 304. When reviewing a quasi-legislative action of an administrative agency, a court must affirm the decision if it is supported by a preponderance of the evidence and if the agency's findings are supported by competent, material, and substantial evidence on the whole record and are not against the weight of the evidence. Id. See also, e.g., Baltimore Gas and Elec. Co. v. McQuaid, 220 Md. 373, 382 (1959).

The scope of judicial review of the Commissioner's legislative actions under the rating organization subtitle was also addressed in Maryland Fire Underwriters Rating Bureau v. Insurance Comm'r, 260 Md. 258, 263-64 (1971), in which the Court of Appeals described the scope of judicial review as "narrow." As the Court of Special Appeals later put it, "a reviewing court 'should be loathe to substitute its judgment for the result reached by an administrative agency'" in the exercise of legislative functions. Katz v. Insurance Comm'r, 53 Md. App. 420, 425 (1983) (quoting Maryland Fire, 260 Md. at 266).

The establishment of two separate standards of judicial review for appeals from decisions of the Commissioner has its roots in the separation of powers doctrine, embodied in Article 8 of the Maryland Declaration of Rights. Department of Natural Resources v. Linchester Sand & Gravel Corp., 274 Md. 211 (1975). As explained in Linchester, the General Assembly has delegated some of its legislative authority to administrative agencies and, in order to preserve the separation of powers and the judiciary's proper role, the scope of judicial review is narrowly circumscribed. 274 Md. at 221-25. When an administrative agency acts in a quasi-legislative capacity, judicial review of that particular action "is limited to assessing whether the agency is within its legal boundaries"; when an agency acts in a quasi-judicial, or factfinding capacity, the reviewing court has authority to review the appealed conclusions to determine "whether the contested decision was rendered in an illegal, arbitrary, capricious, oppressive or fraudulent manner." 274 Md. at 224.

Legislative or quasi-legislative decisions involve legislative facts, as opposed to adjudicative facts. Montgomery County v. Woodward & Lothrop, Inc., 280 Md. 686, 711-12 (1977); Hyson v. Montgomery County Council, 242 Md. 55, 64-65 (1966). Adjudicative facts are facts about the parties and their activities, businesses, and properties. They usually answer the questions of who did what, where, when, how, why and with what motive or intent. Legislative facts, in contrast, do not usually concern the immediate parties but are general facts which help the tribunal decide questions of law, policy, and discretion. Montgomery County v. Woodward & Lothrop, Inc., 280 Md. at 712. See also 2 Davis, Administrative Law Treatise §12:3, at 413 (2d ed. 1979). The difference between the two, broadly speaking, is whether the decision is to be made on individual or general grounds.4 Where a single or discrete number of entities are involved and a factual determination is made based upon evidence of record in an adversary or trial-type proceeding, the process is judicial in nature. Montgomery County v. Woodward and Lothrop, Inc., 280 Md. at 713.

C. Applicability to Chapter 663 Decisions

Section 604(b) provides generally that "[a]ll orders, decisions, and findings of the Commissioner made under the [Act] are subject to judicial review in accordance with §242B." In contrast, §606(b) specifically authorizes a commercial entity that has been denied coverage by the Association under §606(a) to appeal the decision to the Commissioner and "request a hearing under §§35 through 40" of the Insurance Code. As previously discussed in Part II above, a specific enactment prevails over an incompatible general enactment in the same or another statute. Accordingly, the specific provision of §606(b)(2) prevails over the general language contained in §604(b), as to §606(b) decisions.

This result is entirely compatible with the overall scheme of judicial review under the Insurance Code, as discussed in Part IVB above. A hearing held pursuant to §606(b) would be inherently quasi-judicial in nature. The Association would be placed in an adversarial position vis-a-vis the commercial entity that was denied coverage, and the Commissioner would be required to decide factual issues concerning that particular commercial entity. The Commissioner's decision would affect only a single commercial entity and would not have a general and far-reaching effect. Accordingly, the Commissioner would be exercising a quasi-judicial function and the judicial review provisions set forth in §40 would be appropriate.

On the other hand, appeals from decisions of the Commissioner under §§602(a) and 604(a)(2) are unlike those under §606(b) and should proceed in accordance with the judicial review provisions of §242B. Unlike §606(b), neither §602(a) nor §604(a)(2) contains any specific language in conflict with the general pronouncement in §604(b). Therefore, there is no internal conflict to resolve. Furthermore, the judicial review provisions of §242B are appropriate to the quasi-legislative nature of the functions performed by the Commissioner under §§602(a) and 604(a)(2).

Section 602(a) provides that the Association shall issue policies of insurance only if, after a hearing, the Commissioner finds that commercial casualty insurance is unavailable for a particular subpool and that certain other conditions, as set forth in Part I above, exist. Section 602(b) provides that, upon making the requisite findings, the Commissioner may include in an order under §602(a) the requirement that the Association activate certain subpools.

The Commissioner's determinations under §602(a) and (b) are quasi-legislative determinations based upon legislative facts. The decision whether certain commercial casualty insurance is unavailable and whether or not a subpool should be activated involves broad public policy issues and the exercise of considerable discretion. The decision is based on general facts and its impact is wide-ranging. Accordingly, the narrowly circumscribed scope of judicial review of legislative functions is appropriate to a finding made pursuant to §602(a) and the resultant activation of a subpool pursuant to §602(b).

Likewise, any hearing held pursuant to §604(a)(2) would also be quasi-legislative in nature and judicial review in accordance with §242B would be appropriate. Section 604(a)(2) provides for an appeal to the Commissioner from a decision of the Board of Governors. The Board of Governors is empowered to administer the Association (§601(e)(1)), to submit a program of operation to the Commissioner (§601(f)), to determine the premiums to be charged on policies issued by the Association (§601(i)(1)), and to contract with a licensed insurer or the JIA to administer the affairs of the Association (§601(j)(1)). These decisions have a general, far-reaching effect and are directed toward the public generally, not a discrete or limited number of member insurers or commercial entities. The Commissioner must consider legislative facts when he determines whether to uphold or reverse a generally applicable decision of the Board of Governors. The Commissioner's role in resolving this kind of issue is most accurately characterized as quasi-legislative, not quasi-judicial, in nature and, therefore, the judicial review provisions of §242B are applicable.

V
Conclusion

In summary, it is our opinion that:

1. The CCUA may issue malpractice insurance to nurse-midwives upon the activation of that subpool.

2. The premium base upon which assessments are calculated should exclude premiums attributable to policies of property and homeowner's, medical malpractice, motor vehicle, and workers' compensation insurance.

3. Appeals from the quasi-legislative decisions of the Commissioner under §§602(a) and 604(a)(2) are subject to judicial review in accordance with §242B, while appeals from the quasi-judicial decisions of the Commissioner under §606(b)(1) are subject to judicial review in accordance with §40.

Stephen H. Sachs
Attorney General
Meg R. Loeschke
Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions and Advice

1 All statutory references in this opinion, unless otherwise explicitly stated, are to Article 48A.

2 The Court of Appeals has stated on numerous occasions that the General Assembly is presumed to have had, and to have acted with respect to, full knowledge and information about prior and existing law. E.g., City of Baltimore v. Hackley, 300 Md. 277, 283 (1984). Therefore, one must presume that the General Assembly was aware of the 1985 amendment, which broadened the scope of Medical Mutual to include nurse-midwives.

3 Statutes must be read in such a way as to avoid unjust, illogical, absurd, or unreasonable consequences. See, e.g., McClurkin v. Maldonado, 304 Md. 225, 233 (1985); Kindley v. Governor of Maryland, 289 Md. 620, 625 (1981).

4 "Facts pertaining to the parties and their businesses and activities, that is, adjudicative facts, are intrinsically the kind of facts that ordinarily ought not to be determined without giving the parties a chance to know and to meet any evidence that may be unfavorable to them .... The reason is that the parties know more about the facts concerning themselves and their activities than anyone else is likely to know, and the parties are therefore in an especially good position to rebut or explain evidence that bears upon adjudicative facts. Because the parties may often have little or nothing to contribute to the development of legislative facts, the method of trial often is not required for the determination of disputed issues about legislative facts." 2 Davis, Administrative Law Treatise §12:3, at 413.