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D promulgated regulation 65 (11 NYCRR Part 202), which limits to specified maximum levels, adjusted for volume, the commissions an insurance agent may receive for life insurance policies issued on a mass-merchandising basis under plans sponsored by union-management employee welfare funds. P is a duly licensed life insurance agent who is in the business of soliciting and placing life insurance coverage for members of union-management welfare funds. P had an agency relationship with the International Life Insurance Company of Buffalo. P was to receive a commission on each individual life insurance policy he placed with the company equal to 55% of the first-year premium. The rate of commission applicable to the placement of a single policy covering a group of individuals was substantially lower. P arranged for the placement of a life insurance program to be sponsored by a Union. The assets of this union-management welfare fund were contributed pursuant to the terms of a collective bargaining agreement. P arranged with the trustees of the fund for a program whereby each member would be issued a uniform individual policy with terms prearranged by the trustees of the fund and the insurance carrier. Thus P got the higher commission rate applicable to individual policies. Regulation 65, limits P’s commission to no more than 5.2% of the annual premium of each policy. The insurance carrier refused to pay P the full commission specified in the agency agreement. P sued D to invalidate Regulation 65. The court ruled for P and the appeals court affirmed. D appealed.

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