ORDERS:
CONSENT ORDER AND ORDER OF DISMISSAL
1. On February 12, 2002, Philip S. Porter, Consumer Advocate for the State of South Carolina (the Consumer Advocate)
requested the South Carolina Department of Insurance (the Department) to initiate a public hearing on the filing of
Fairmont Insurance Company requesting an approval of an overall increase of +9.9% in its workers compensation
insurance premium rates.
2. On February 19, 2002, the Department filed with the Administrative Law Judge Division and Agency Transmittal Form
requesting a public hearing.
3. The Administrative Law Judge Division assigned this matter to the Honorable C. Dukes Scott under the Docket No. 02-ALJ-09-0065-CC. A hearing on the matter has not yet been set.
4. Meanwhile, the Consumer Advocate retained a consulting actuary and requested two sets of additional information from
the Company. In his first data request, the Consumer Advocate requested sufficient actuarial information to justify the level
of the rate request, particularly as it would relate to the Company's expense multiplier. In the Consumer Advocate's
opinion, this information was not contained in the original filing submitted to the Department of Insurance. In the second
data request, the Consumer Advocate requested the actual data from which the expense factors were calculated; the total
rate of return calculation for profit factors; and the actuarial justification for any other factors used in developing the rate
request. The Company responded that to achieve an adequate rate level, it adopted the latest approved industry loss costs
(which was a significant overall reduction) and loaded them with the Company's indicated expense provisions. The
Company further responded that the projected rate of return for the South Carolina Workers Compensation book was
10.8%. Since its current 2001 developed loss and ALAE ratio was 141.1%, its actual return was significantly less. The
Company well documented its assertions. Having reviewed this additional information, the Consumer Advocate is now
satisfied that the request satisfies the statutory requirements. The Consumer Advocate hopes that in the future, the similar
information would be routinely provided in the original filing.
5. Based on the foregoing, the Consumer Advocate now withdraws his original request for a hearing in this matter.
6. There are no unresolved issues remaining; therefore, all parties agree to the dismissal of this matter.
NOW, THEREFORE, the above referenced matter is dismissed.
IT IS SO ORDERED.
____________________________________
C. DUKES SCOTT
ADMINISTRATIVE LAW JUDGE
May, 20, 2002
Columbia, South Carolina
WE CONSENT:
___________________________ _____________________________________
Perlita Clemente T. Douglas Concannon, Esquire
Actuarial Assistant Associate general Counsel
TIG Premier Insurance Company South Carolina Department
5205 N. O'Connor Blvd. of Insurance
Irving, TX 75039 P.O. Box 100105
Columbia, SC 29202-6160
___________________________
Hana Pokorna-Williamson, Esquire
Staff Attorney
South Carolina Department of
Consumer Affairs
P.O. Box 5757
Columbia, SC 29250-5757 |
