ORDERS:
ORDER AND DECISION
On August 4, 1994, the American Bankers Insurance Company of Florida (Company) filed an
application with the Chief Insurance Commissioner requesting approval of an overall rate increase
of +25.3% in their Homegard rates.
By appropriate notice dated November 2, 3, and 4, 1994, the public was advised that an
application had been made and that a hearing would be held on December 16, 1994.
The South Carolina Department of Consumer Affairs petitioned to intervene and was ordered to
intervene of right on the above referenced matter on November 18, 1994.
Prior to the hearing the parties reached an agreement regarding a rate increase that would not be
protested by the South Carolina Departments and would meet the statutory requirements. On
December 13, 1994, the Company amended their original rate increase request from +25.3% to
+8.0%.
The hearing was held before me on the above referenced matter on December 16, 1994.
Present at said hearing were counsel for the parties and Mr. Martin M. Simons, Chief Casualty
Actuary with the Department of Insurance.
From testimony, exhibits and arguments presented at the hearing, I make the following:
FINDINGS OF FACTS
1. The Company originally requested an overall rate increase of +25.3% in its Homegard property
and casualty insurance rates.
2. After reviewing the Company's original support data, the South Carolina Department of
Insurance Chief Casualty Actuary and Acting Consumer Advocate for the State of South Carolina
questioned some of the rating methodology.
3. Additional information was provided to the Departments of Insurance and Consumer Affairs
and discussions ensued. Based on those communications, the Company amended the amount of
the requested increase from +25.3% to +8.0%.
4. The proposed increase of +8.0% appears to be justified and the State of South Carolina
Department of Insurance recommends its approval and the Department of Consumer Affairs does
not object to it.
CONCLUSIONS OF LAW
The law governing the making of rates is well defined. Insurance rates are regulated under 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 § 38-73-330 (Supp. 1993). 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 the Company, the testimony adduced at the hearing and
matters officially noted during the course of the hearing. I have resolved all factual questions on
the basis of the exhibits and testimony in the record and on the basis of the independent analysis of
the rate filing formulated by the State of South Carolina Department of Insurance and Department
of Consumer Affairs.
The proposal of the American Bankers Insurance Company of Florida for a revision in Homegard
rates would produce rates which would not be excessive, inadequate nor unfairly discriminatory
and would be in compliance with South Carolina Code Annotated, Section 38-73-330.
ORDER
It is therefore, ORDERED that the proposed rates be approved. The effective date of the
proposed rates must not occur before January 5, 1995.
________________________________
ALISON RENEE LEE
Administrative Law Judge
December ____, 1994
Columbia, South Carolina. |
