Ostrer v. Schenck

41 N.Y.2d 782, 364 N.E.2d, 396 N.Y.S.2d 335 (1977)

From our private database of 45,900+ case briefs, written and edited by humans—never with AI.

Ostrer v. Schenck

New York Court of Appeals
41 N.Y.2d 782, 364 N.E.2d, 396 N.Y.S.2d 335 (1977)

  • Written by Nicole Gray , JD

Facts

Benjamin Ostrer (plaintiff) was licensed to sell life insurance in the state of New York. Ostrer typically collected commissions up to 55 percent of an individual life-insurance policy’s first-year premium, as was authorized by state insurance law. However, a regulation that was promulgated by the superintendent of insurance, Benjamin Schenck (defendant), limited commissions that Ostrer could collect on the sale of group insurance policies to no more than 5.2 percent of the annual premium of each policy when the policies were issued to trustees of funds established by two or more employers in the same industry for the benefits of their employees or by labor unions for the benefits of their members. The regulation limiting Ostrer’s commissions was promulgated in response to public outcry against abuses in management of funds contributed by employers to union welfare funds for the benefit of union members and their dependents. The regulation applied when 25 or more employees or union members were insured by a policy that offered a fixed amount of insurance, and for which premiums were paid from fund assets by fund trustees. However, Ostrer entered an arrangement with the trustees of a union welfare fund to provide individual policies to the fund’s members as opposed to a single group policy covering all the members. The policy premiums were paid from the fund’s assets but allowed Ostrer to claim higher commissions on the individual policies. In some instances, however, the policies provided inferior benefits to the fund members. For example, when members were temporarily laid off, their individual policies would terminate after a period of unemployment and would need to be reinstated with new premiums paid when work resumed; that would not have been the case with a group policy. When Ostrer attempted to collect commissions on the individual policies that he sold through the arrangement with the fund’s trustees, he was denied full payment by the insurance carrier. Ostrer then sued the superintendent of insurance to have the commission-limiting regulations invalidated. A state trial court found that the superintendent’s regulations conflicted with state insurance law and were invalid. An appellate-division court affirmed. The superintendent appealed.

Rule of Law

Issue

Holding and Reasoning (Jasen, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 742,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 742,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 45,900 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 742,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 45,900 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership