ORDERS:
ORDER AND DECISION
This matter comes before me on the application of State Auto Property and Casualty Insurance
Company for a rate increase on its automobile private passenger insurance pursuant to S.C. Code
Ann. §§ 38-73-10, et seq., (Supp. 1994) and S.C. Code Ann. § 1-23-310, et seq. (Rev. 1986 &
Supp. 1994). The South Carolina Consumer Advocate petitioned to intervene of right which was
granted by Order dated May 12, 1995. After notice to the parties, a public hearing and contested
case hearing were conducted on June 20, 1995. The request was not contested by the
Departments of Insurance and Consumer Affairs or any member of the public. Upon the review
of the testimony and evidence submitted, the rate increase is approved.
FINDINGS OF FACT
I make the following findings of fact, taking into consideration the burden on the parties to
establish their cases by a preponderance of the evidence and taking into account the credibility of
the witnesses:
1. State Auto filed an application with the Department of Insurance on March 24, 1995 for a
revision in the Personal Auto Program with an overall increase of 4.8%. The filing contains
information to support the proposed increase and details various changes. Petitioner requests an
effective date of October 1, 1995.
2. The Department of Insurance, in conducting its investigation, found the loss trend factors used
in the company's ratemaking calculations excessive and notified the company to that effect.
Discussions ensued between the company and the Department of Insurance and an agreement was
reached in which the overall increase requested was reduced from 4.8% to 3.8%. This change
will result in a savings of premiums to policyholders in South Carolina of approximately
$206,000. Appropriate documentation was sent to the Department to support this change.
3. The Department of Consumer Affairs conducted an independent investigation of the filing and
reached the same conclusion as the Department of Insurance. As a result of the change
negotiated between the parties, the Department of Consumer Affairs does not object to the
revised request.
4. The Department of Insurance, through its Chief Casualty Actuary, represents that the amended
overall request of 3.8% will produce rates that are not excessive, inadequate or unfairly
discriminatory.
5. The last rate increase for Petitioner was in 1992.
6. By notice dated May 8, 1995 and published on May 17, 18, or 19, 1995 in various newspapers
throughout the State, the public was advised that an application for a rate increase by Petitioner
had been made and that a hearing would be held on June 20, 1995. No member of the public
appeared at the hearing.
CONCLUSIONS OF LAW
1. The 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 1, as amended, of the 1976 Code.
2. A request for an insurance rate increase is governed by S.C. Code Ann. § 38-73-10 et seq.
(Supp. 1994).
3. Pursuant to S.C. Code Ann. § 38-73-910 (Supp. 1994), notice of the filing and of the public
hearing was published in all newspapers of statewide circulation at least 30 days in advance of the
hearing.
4. Petitioner has established that the 3.8 percent overall increase in premium 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 insurance rate increases is the private passenger
automobile program requested by State Auto Property and Casualty Insurance Company in the
filing as amended are approved. The effective date of the increase shall not occurred before the
date of this Order.
AND IT IS SO ORDERED.
___________________________
ALISON RENEE LEE
Administrative Law Judge
June ____, 1995
Columbia, South Carolina. |