ORDERS:
ORDER AND DECISION
This matter comes before me on the application of Amica Mutual Insurance Company for a rate
increase of 4.9% in its homeowners' property and casualty insurance premium rates pursuant to
S.C. Code Ann. § 38-73-910 (Supp. 1995) and S.C. Code Ann. §1-23-600 (B)(Supp. 1995).
On January 29, 1996, the Amica Mutual Insurance Company filed an application with the South
Carolina Department of Insurance requesting approval of a rate increase in its homeowners'
property and casualty insurance premium rates.
The South Carolina Department of Consumer Affairs petitioned to intervene and was ordered to
intervene of right on the above-referenced matter on February 21, 1996.
By appropriate notice dated February 20 and 21, 1996, the public was advised that an application
had been made and that a hearing would be held on March 29, 1996. No one appeared at the
public hearing. Amica requested at the contest case hearing to amend its request from an overall
4.9% to an overall 3.9% rate increase in its homeowners' property and casualty insurance
premium rates. The appropriate amendment was filed with the Department of Insurance on April
8, 1996.
From the testimony, exhibits and arguments presented at the hearing, I make the following:
FINDINGS OF FACT
1. The Amica Mutual Insurance Company filed an application with the Department on January 29,
1996 for a rate increase of 4.9% in its homeowners' property and casualty insurance premium
rates. It revised its application to request a rate increase of 3.9% on April 8, 1996.
2. The company provided documentation to support its request to increase Amica's dwelling and
contents base rates as well as territory redefinitions and to revise deductible relativity factors and
revise protection-construction relativity factors. The basis for the requested increase is poor loss
experience during the last five years and competitively inappropriate rates.
3. The last rate increase requested by Petitioner was February 1, 1993.
4. The Consumer Advocate had no objection to Amica's proposed increase of 3.9% in its
homeowners' property and casualty insurance premium rates.
5. The Chief Actuary of the South Carolina Department of Insurance has reviewed this filing and
testified that the overall increase of 3.9% would produce rates that are not excessive, inadequate
or unfairly discriminatory.
6. The Department of Insurance recommends that the increase of 3.9% in homeowners' property
and casualty insurance rates be approved.
CONCLUSIONS OF LAW
The law governing the making of rates is well defined. Insurance rates are regulated under the
Title 38 of the South Carolina Code of Laws, 1976, as amended. The pertinent statutory
requirement is that rates shall be neither excessive, inadequate nor unfairly discriminatory, and
shall include a reasonable margin for underwriting profit. S.C. Code of Laws Section 38-73-430
(Supp. 1995). The filing must meet both the statutory standards and be supported by a
preponderance of evidence.
An independent investigation was made of the proposed filing. All conclusions were based upon
the documents supporting the filing by Amica Mutual, testimony adduced at the hearing and
matters officially noted during the course of the hearing. All factual questions have been resolved
based upon the exhibits, testimony, and pleadings filed and on the basis of the independent
analysis of the rate filing formulated by the Department of Insurance.
The proposal of Amica Mutual Insurance would produce rates which would not be excessive,
inadequate or unfairly discriminatory and would be in compliance with S.C. Code Ann. §
38-73-430.
ORDER
IT IS THEREFORE ORDERED that the proposed rate changes be approved. The effective date
of the proposed rates must not occur before the date of this Order.
AND IT IS SO ORDERED.
__________________________
ALISON RENEE LEE
Administrative Law Judge
April _____, 1996
Columbia, South Carolina |