71 Op. Att'y Gen. 127 (1982)
 
71 OAG 127 128 129 130 131 132

OPINION NO. OAG 37-82,

Wisconsin Attorney General Opinions

7 May 1982

Insurance;

The Wisconsin Auto Insurance Plan and
Rejected Risk Plan do not constitute
unconstitutional delegations of authority and
are otherwise constitutional. The boards of
these plans are private, independent, ongoing
concerns, not state agencies, and members of
these boards are not public officers.
Questions regarding the plans
and boards discussed.

SUSAN MITCHELL, Commissioner Office of The
Commissioner of Insurance

You request my opinion concerning several
questions involving two insurance
risk-sharing plans continued by Section
619.01(6), Stats., the Wisconsin Auto
Insurance Plan and the Wisconsin
Rejected Risk Plan.

The two plans which are the subject of this
opinion are relevantly identical. Each plan
provides insurance for those risks rejected
by insurers in the marketplace; the Auto
Insurance Plan provides auto insurance, and
the Rejected Risk Plan provides workers'
compensation insurance.

Each plan is governed by a board which
operates the plan and makes policy decisions
relating thereto. And each plan requires all
insurers and agents conducting the type of
insurance encompassed by the plan to
participate in the plan.

Because these two plans are substantially
identical, my answers to your questions will
be the same as to each plan.

Your first question is:

     Are the plans an unconstitutional
     delegation of authority under Article 4
     of the Wisconsin Constitution or
     otherwise in violation of any other
     article of the Constitution?

My answer to both parts of this
question is no.

Wisconsin Constitution art. IV, Section 1,
provides that: "The legislative power shall
be vested in a senate and assembly."

Legislative delegations of authority, under
this constitutional command, are proper
when "the purpose of the delegating statute
is ascertainable and there are procedural
safeguards to insure that the board or
agency acts within that legislative purpose."

In Matter of Guardianship of Klisurich,
98 Wis.2d 274, 280, 296
N.W.2d 742 (1980).

 
71 OAG 127 128 129 130 131 132

The purpose of the delegating statute,
Section 619.01, Stats., is readily
ascertainable: the statute furthers the
public interest by providing insurance
protection for those unable to obtain it
in the marketplace.

See comment to Chapter 144,
Section 22, Laws of 1969.

Further, an examination of the statutes
creating these plans (Auto Plan   Section
204.51, Stats. (1967); Rejected Risk Plan
Section 205.15, Stats. (1967)), reveals that
procedural safeguards were established to
assure the attainment of the legislative
purpose. Accordingly, it is my opinion that
these plans are constitutionally valid
delegations of authority. [1]

In addition, it is my opinion that these
plans do not violate the due process and
equal protection clauses of U.S. Const.
amend. XIV and Wis. Const. Art. I, Section 1.

The insurance industry is properly subject to
regulation by the state under the police
power, bound up as the industry is in the
public interest.

Ministers Life & Casualty Union v. Haase,
30 Wis.2d 339, 349,
141 N.W.2d 287 (1966).

A police power statute challenged on either
due process or equal protection grounds will
be sustained if there is any "reasonable
basis" for its enactment.

State v. Amoco Oil Co.,
97 Wis.2d 226, 259,
293 N.W.2d 487 (1980);

State v. Jackman,
60 Wis.2d 700, 705-06,
211 N.W.2d 480 (1973).

There can be no serious doubt that the
assigned-risk pool is a reasonable method
by which to provide for the public welfare
concerning insurance.

Therefore, there is a "reasonable basis" for
these plans, and they are constitutional.

Your second question is:

     Must the Boards of the Plans comply with
     Chapter 19, Wis. Stats., regarding
     public records and open meetings?

My answer to both parts of this
question is no.

 
71 OAG 127 128 129 130 131 132

Section 19.81(2), Stats., provides that the
open meetings law applies to

     "all state and local governmental bodies
     . . . ." The term "governmental body" is
     defined in Section 19.82(1), Stats., to
     include, in relevant part, "a state or
     local agency, [or] board . . . ."
 

Note that each plan may assess member
insurers to cover whatever operating costs
and losses that may accrue to the plan.

Neither plan receives money from the
Legislature, and the ability of the plans to
incur financial liability has in no way been
limited by the Legislature.

All moneys and property are acquired by the
plans and are subject to the sole authority
of the plan (not the state) as to the
holding, use and disposal thereof.

Liabilities incurred by the plans
are their own liabilities and not
liabilities of the state.

Considering these factors as a whole,
and reading them in light
of

Lister v. Board of Regents,
72 Wis.2d 282,
240 N.W.2d 610 (1976),

Majerus v. Milwaukee County,
39 Wis.2d 311,
159 N.W.2d 86 (1968),

and

Sullivan v. Board of Regents of
Normal Schools,
209 Wis. 242,
244 N.W. 563 (1932),

I conclude that the plans are private,
independent, ongoing concerns and are not
state boards or state agencies.

Therefore, they are not "governmental bodies"
as defined in Section 19.82(1), Stats., and
are not subject to the open meetings law.

The requirements of Section 19.21(1), Stats.,
dealing with public records, fall on public
officers. The crucial inquiry then is whether
members of these boards are public officers.

The leading cases in Wisconsin concerning the
question of who is a public officer are

Burton v. State Appeal Board,
38 Wis.2d 294,
156 N.W. 386 (1968),

and

Martin v. Smith,
239 Wis. 314,
1 N.W.2d 163 (1941).

These cases make clear that, to be a
public officer, a position must be one
of "public [not private] employment."

Burton,
38 Wis.2d at 300;

Martin,
239 Wis. at 332.

The plans themselves are private,
independent, ongoing concerns and not state
public agencies, as I have concluded above.

Consonant with the plans' private status,
membership on the governing boards represents
private rather than public employment.

As the board members hold private positions,
I conclude that they are not public officers,
and therefore that they need not comply with
Section 19.21, Stats.

 
71 OAG 127 128 129 130 131 132

Your third question is:

     Are the actions of the Boards
     subject to the provision of
     Chapter 227, Wis. Stats.?

The answer to this question is no.

Chapter 227, Stats., applies by its terms
to certain agencies of the state.

These agencies, delineated in Section
227.01(1), Stats., include

     "any board, commission, committee,
     department or officer in the state
     government, except the governor
     or any military or judicial
     officer of this state."

As noted above, the boards
are not state boards.

Therefore, they are not agencies under
Section 227.01(1). Stats., so that
Chapter 227, Stats., does not
apply to actions of the boards.

Your fourth question is:

     May the Boards hire and fire personnel
     without regard to Chapter 230, Wis.
     Stats.?

The answer to this question is yes.

Chapter 230, Stats.,
applies to state agencies.

Section 230.03(3), Stats., defines the term
in relevant part to refer to

      "state boards. . . created by the
       constitution or statutes . . . ."

As noted above, the governing boards of the
plans are not state boards. They are neither
created by constitution or statute.

Therefore, Chapter 230, Stats., does not
apply to the Boards' decisions to
hire and fire personnel.

Your fifth question is:

     Are the plans subject to budgeting and
     appropriation procedures set forth in
     Chapters 16 and 20, Wis. Stats.?

The answer to both parts of this
question is no.

As to Chapter 16, Stats., it is clear from
Section 16.001(1), Stats., that this chapter
applies only to "state agencies."
The boards of the plans are not state
agencies and therefore the Chapter 16,
Stats., procedures do not apply to them.

As to Chapter 20, Stats., Section 20.001(1),
Stats., defines which agencies are subject to
Chapter 20, Stats.

This office has previously indicated, in an
unpublished opinion (OAG 47-80), that these
agencies include only those agencies
delineated under Section 15.02, Stats.,
i.e., the constitutional offices, departments
and independent agencies in the state's
executive branch.

 
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The governing boards of the plans, because of
their private, independent status, do not fit
into any of these designations. Therefore, I
conclude that these boards are likewise not
subject to the requirements of Chapter 20,
Stats.

Your sixth and seventh questions will
be considered together. They are:

     Are members of the Boards and Committees
     of the Plans state officers within the
     meaning of sections 895.45 and 895.46,
     Wis. Stats., when such members act
     within their official capacity?

     Are members of the Boards and the
     Committees of the Plans immune from
     civil liability for damages when acting
     within the scope of their office?

The answer to both these questions is no
Section 893.82, Stats. (formerly Section
895.45, Stats.), bars suit against a state
officer, employe or agent concerning any
act committed in discharge of his or her
office unless the claimant serves notice of
his or her claim to the Attorney General
within a specified time.

Section 895.46, Stats., provides, among other
things, for the state and its political
subdivisions to pay judgments rendered
against public officers or employes for acts
committed while carrying out their duties,
when such officers and employes were acting
within the scope of their employment.

As noted above, board members (and, likewise,
for the same reasons noted above, committee
members) are members of private, independent,
ongoing concerns. I, therefore, conclude that
board and committee members are not state or
public officers (or employes or agents) and
do not enjoy the protection of Sections
893.82 and 895.46, Stats.

In answer to your second question, it must be
noted that the immunity from civil liability
to which you refer is available to public
officers and public employes, not to employes
of private, independent, ongoing concerns.

Scarpaci v. Milwaukee County,
96 Wis.2d 663, 693,
292 N.W.2d 816 (1980);

Yotvat v. Roth,
95 Wis.2d 357, 365,
290 N.W.2d 524 (Ct.App. 1980).

 
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Since board and committee members come under
the latter category, and not the former,
immunity from civil liability does not extend
to their acts as board or committee members.

BCL:JDJ:ewjf

[1]

This analysis holds true whether these boards
are state agencies or are private concerns,
an issue dealt with later in this opinion
Wisconsin courts have often upheld
delegations of authority to private,
independent, ongoing concerns for valid,
public purposes.

See, e.g.,

Townsend v. Wisconsin Desert Horse Asso.,
42 Wis.2d 414, 423
167 N.W.2d 425 (1969);

State ex rel. Warren v. Nusbaum,
59 Wis.2d 391,
208 N.W.2d 780 (1973);

State ex rel. Thomson v. Giessel,
265 Wis. 185,
60 N.W.2d 873 (1953).
 
 
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