ORDERS:
ORDER
I. Statement of the Case
This matter comes before me pursuant to S.C. Code Ann. § 38-73-10, et seq., (1989 & Supp.
1994) and S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 1994) upon a request for a
lender's collateral protection property and casualty insurance premium rate increase. A hearing
was conducted on November 27, 1995. The request was not opposed by the Department of
Insurance. Upon review of the testimony and evidence submitted, the rate increase request is
approved.
II. Issues
Will the lender's collateral protection property and casualty insurance premium rate increase
request made by the Petitioner result in rates that are excessive, inadequate, or unfairly
discriminatory within the meaning of S.C. Code Ann. § 38-73-10(a)(1)(Supp. 1994)?
III. Analysis
1. Positions of Parties:
The South Carolina Department of Insurance does not oppose the rate increases requested.
United Financial Casualty Company asserts the rate increase is not excessive, inadequate, or
unfairly discriminatory.
2. Findings of Fact:
I find, by a preponderance of the evidence, the following facts:
1. Petitioner submitted on August 9, 1995, to the South Carolina Department of Insurance a
formal filing for revision of its lender's collateral protection property and casualty insurance
premium rate increase.
2. The filing requested a rate change that results in an overall percentage change of -12.20%, but
which has the effect of increasing the premiums for some policy holders and decreasing the
premiums for other policy holders, depending upon their policy limit, risk classification, or base
rate.
3. By notice dated September 18,1995, and published in several newspapers of general circulation
throughout the State thirty (30) or more days in advance of the hearing, the public was advised
that an application for a rate increase by Petitioner had been made and that a hearing would be
held on November 27, 1995.
4. The Department of Insurance conducted an independent investigation of the filing.
5. The 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.
6. The rate increase request was not contested by the South Carolina Consumer Advocate or any
member of the public.
7. The last rate increase by the Petitioner was obtained on January 9, 1995.
3. Discussion
The filing of a request for a rate change requires the Department of Insurance to determine if the
rate change is excessive, inadequate, or unfairly discriminatory within the meaning of S.C. Code
Ann. § 38-73-10(a)(1) (Supp. 1994). In the instant case, the actuary for the Department of
Insurance reviewed the filing and found the rate increase was not excessive, inadequate, or
unfairly discriminatory. Further, no member of the public nor the Consumer Advocate entered
any opposition to the request for a rate increase. Accordingly, the request for a rate increase is
approved.
4. Conclusions of Law
Based on the foregoing Findings of Fact and Discussion, I conclude, the following as a matter of
law:
1. The South Carolina Administrative Law Judge Division is empowered to hear this case
pursuant to S.C. Code Ann. § 38-73-910 (1989) and Chapter 23 of Title I of the 1976 Code, as
amended.
2. In general, a request for an insurance rate increase is governed by S.C. Code Ann. §§ 38-73-10,
et seq. (1989 & Supp. 1994).
3. Pursuant to S.C. Code Ann. § 38-73-910 (1989), 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.
4. Petitioner met the burden of proof in a rate increase request by establishing that the revised
rates would not be excessive, inadequate, or unfairly discriminatory. See S.C. Code Ann. §
38-73-10(a)(1) (Supp. 1994).
5. A property and casualty insurance coverage rate increase may not be granted within twelve
months of a previously granted rate increase. See S.C. Code Ann. § 38-73-920.
IV. ORDER
The insurance premium rate increase requested by Petitioner, United Financial Casualty Company,
is approved with the rate increase as sought in the August 9, 1995, filing effective January 9,
1996.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 27th day of November, 1995. |