ORDERS:
ORDER AND DECISION
This matter comes before me pursuant to S.C. Code Ann. § 38-73-10, et seq.,
(Supp. 1994) and S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 1994) upon a request for a
commercial automobile property and casualty insurance expense component revision. A hearing
was conducted August 2, 1995. The request was not contested by the South Carolina
Department of Insurance or any member of the public. Upon review of the testimony and
evidence submitted, the revision request is approved.
FINDINGS OF FACT
By a preponderance of the evidence, I find:
(1) Petitioners submitted on April 4, 1995, to the South Carolina Department of Insurance a
formal filing for revision of its commercial automobile property and casualty insurance expense
component factor used in formulating premiums, having an overall premium impact of -14.8%.
(2) By notice dated June 13, 1995, the public was advised that an application for a rate revision
by Petitioners had been made and that a hearing would be held on August 2, 1995.
(3) The expense component is added by each member insurer to the commercial automobile pure
loss component determined by ISO, a rating organization, and approved by the State, to establish
Petitioners' premium rates.
(4) Although the overall impact upon premium rates is -14.8%, the component revision will cause
a slight increase in some garage risk provisions.
(5) The South Carolina Department of Insurance conducted an independent investigation of the
filing.
(6) The South Carolina Department of Insurance, through its Chief Casualty Actuary,
Mr. Martin M. Simons, testifying as an expert witness, represents that the rate increase request
will produce rates that are not excessive, inadequate, or unfairly discriminatory.
(7) The filing was not contested by the State Consumer Advocate or any member of the public.
(8) Petitioners' last approved rate increase was effective August, 1994.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:
(1) The South Carolina Administrative Law Judge Division is empowered to hear this case
pursuant to S.C. Code Ann. § 38-73-910 (Supp. 1994) and Chapter 23 of Title I of the 1976
Code, as amended.
(2) Generally, a request for an insurance rate increase is governed by S.C. Code Ann. §§
38-73-10, et seq. (Supp. 1994).
(3) An "expense component" is that factor applicable to production costs, administrative costs,
and profit margin in this State. S.C. Code Ann. § 38-73-1400(2) (Supp. 1994).
(4) Pursuant to S.C. Code Ann. §§ 38-73-1370, 1380, and 1400 (Supp. 1994), a revision in a
insurance company's rating formula expense component is subject to a public hearing and must be
approved before becoming effective.
(5) Pursuant to S.C. Code Ann. § 38-73-910 (Supp. 1994), notice of the filing and of the public
hearing was given in all newspapers of statewide circulation at least 30 days in advance of the
hearing.
(6) Petitioners met the burden of proof in this revision request by establishing that the revised
resulting rates would not be excessive, inadequate, or unfairly discriminatory. See, S.C. Code
Ann. § 38-73-10(a)(1) (Supp. 1994).
ORDER
IT IS THEREFORE ORDERED that the expense component revisions requested by Petitioners
are approved. The effective date of the revisions is September 1, 1995.
___________________________________
STEPHEN P. BATES
ADMINISTRATIVE LAW JUDGE
August ___, 1995
Columbia, South Carolina |