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.
1995) and S.C. Code Ann. §§ 1-23-310, et seq. (1986 & Supp. 1995) upon a request for a
homeowners' property and casualty insurance premium rate increase. A hearing was conducted
on February 20, 1996. The request for a rate increase was not opposed by the Department of
Insurance. The Consumer Advocate intervened and, after discovery and the filing by Petitioner of
an amended filing, also determined it does not contest the rate increase. Upon review of the
testimony and evidence submitted, the rate increase request is approved.
II. Issues
Will the homeowners' 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. 1995)?
III. Analysis
1. Positions of Parties:
The South Carolina Department of Insurance and the Consumer Advocate do not oppose the rate
increases requested. American Economy Insurance 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 November 21, 1995, to the South Carolina Department of Insurance a
formal filing and on February 1, 1996 an amended filing seeking a revision of its homeowners'
property and casualty insurance premium rate increase.
2. The filing requested a rate change that results in an overall percentage change of 15.30% but
which has the effect of increasing the premiums for some policy holders and decreasing the
premiums for other policy holders.
3. By notice dated December 28, 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 February 20, 1996.
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.
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. The Consumer Advocate intervened and determined it would not oppose
the request for a rate increase. Further, no member of the public 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 (Supp 1995) 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. 1995).
3. Pursuant to S.C. Code Ann. § 38-73-910 (Supp 1995), 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. 1995).
IV. ORDER
The insurance premium rate increase requested by Petitioner, American Economy Insurance
Company, is approved with the rate increase as sought in the November 21, 1995, filing and the
February 1, 1996 amended filing, effective upon the date of this Order.
IT IS SO ORDERED.
____________________________
RAY N. STEVENS
Administrative Law Judge
This 21st day of February, 1996. |