5 Ways a New Supreme Court Ruling Could Shape Life, Health and Advice Regs

The U.S. Supreme Court on Friday issued a 6-3 ruling that will have a big, hard-to-predict effect on federal agencies’ ability to regulate life insurers, annuity issuers and health insurers.

The court said, in a decision on Loper Bright Enterprises v. Raimondo, a case involving whether fishing companies should have to pay for the National Marine Fisheries Service to put compliance observers on their boats, that the courts need not defer to the expertise of federal agencies when reviewing the agencies’ regulations and actions.

The plaintiffs in the Loper case and a related case argued that U.S. Commerce Secretary Gina Raimondo, who oversees the service, had no authority to impose the payment requirement, the court found.

Lawyers for the Biden administration argued that Raimondo had the authority to impose the requirement under Chevron v. National Resources Defense Council, a 1984 ruling that found that the federal courts should show deference to federal agencies in most cases, except when the agencies are being unreasonable.

The Supreme Court majority held that the Chevron deference doctrine approach is unworkable and often cripples the courts’ ability to apply federal laws that might help citizens win out over federal agencies.

Chief Justice John Roberts wrote the opinion for the majority.

Justice Elena Kagan wrote a dissent representing the views of the three justices who disagreed with the ruling.

Finding out what the ruling will really undo will take time. Daniel McKillop, an attorney at Scarinci Hollenbeck, cited arguments by Justice Brett Kavanaugh that overturning the Chevron precedent could eventually reduce the amount of litigation, by discouraging new presidential administrations from overturning predecessors’ regulations whenever the party in charge of the White House changes.

If the ruling has as much impact as Kagan predicts, it could have a strong effect on efforts by the U.S. Department of Health and Human Services, the Centers for Medicare and Medicaid Services and the U.S. Labor Department to regulate health benefits, where federal law already gives federal agencies room to weigh in.

State insurance regulators usually take the lead in regulation of sales of life insurance and annuities, but the new Loper ruling could affect moves by the U.S. Securities and Exchange Commission to regulate life and annuity products that can be classified as securities, such as registered index-linked annuities, and the Labor Department’s ability to regulate any services that may fall under the federal Employee Retirement Income Security Act.

For a look at five life, health and annuity areas where the Loper ruling could have a major impact, based on the view of Supreme Court justices and legal observers, see the gallery above.

Credit: The White House. Credit: Matthew/ Adobe Stock