ORDERS:
DECISION AND ORDER
STATEMENT OF CASE
This matter comes before me pursuant to S.C. Code Ann. § 38-73-910 (1976); S.C. Code Ann. §
38-73-1370 et. seq. (Supp. 1995); and S.C. Code Ann. § 1-23-600 (B) (Supp. 1995) on
Petitioner's request for an increase in its General Liability Property and Casualty loss costs. A
hearing was held on April 3, 1996 at the Administrative Law Judge Division, 1205 Pendeleton
Street, Columbia, South Carolina. The request was not contested by the Department of Insurance
or any member of the public.
Present at the hearing were Mr. Lester H. Hammond, III, representing Insurance Services Office,
Inc.; Mr. Martin M. Simons, Chief Casualty Actuary, South Carolina Department of Insurance;
and Mr. S. Phillip Lenski, representing the South Carolina Department of Insurance.
The rate increase requested by the Petitioner is approved.
FINDINGS OF FACT
Having carefully considered all testimony, evidence and arguments presented at the hearing in this
matter, by a preponderance of the evidence I find as to the requested revision in General Liability
Property and Casualty loss costs:
1. Respondent published notice advising the public that an application for a rate increase by
Petitioner had been made and that a hearing would be held on April 3, 1996, in The Charleston
News & Courier, The Greenville News, The News & Press, The Rock Hill Evening Herald, and
The Columbia Newspapers.
2. On October 2, 1995, Insurance Services Office, Inc. (ISO) made a filing with the Director of
Insurance requesting approval of an overall increase of +37.4% in its General Liability Property
and Casualty loss costs with supporting material (ISO filing GL 95-TALL1). The filing was
amended on November 1, 1995 and November 30, 1995.
3. The filer's most recent loss-cost level change was an overall increase of +19.0% effective on
December 1, 1994.
4. As filed, the filer's indicated and filed statewide advisory loss-cost level changes from the
current loss costs were:
| SUBLINE |
|
|
|
INDICATED LOSS
COSTS |
FILED LOSS COSTS |
| M&C |
|
0.286 |
|
+28.6% |
| OL&T |
|
+35.0% |
+35.0% |
| Premises and Operations |
|
+30.7% |
+30.7% |
| Products |
|
+43.1% |
+43.1% |
| Completed Operations |
|
|
+73.8% |
+73.8% |
| Products/Completed Ops |
|
+55.9% |
+55.9% |
| GL Overall |
|
|
|
+37.4% |
+37.4% |
5. As a result of informed discovery and negotiations and in agreement with the Respondent, the
Petitioner's proposed loss cost level change was amended resulting in anoverall change for the
General Liability Property and Casualty loss costs to +30.8%, as follows:
| SUBLINE |
|
|
INDICATED LOSS
COSTS |
AMENDED LOSS
COSTS |
| M&C |
+28.6% |
|
|
+27.0% |
| OL&T |
+35.0% |
|
|
+27.0% |
| Premises and Operations |
+30.7% |
|
|
+27.0% |
| Products |
+43.1% |
|
|
+29.7% |
| Completed Operations |
|
+73.8% |
|
|
+57.7% |
| Products/Completed Ops |
+55.9% |
|
|
+41.4% |
| GL Overall |
|
|
|
+37.4% |
|
|
+30.8% |
6. The revision of the loss costs as presented in Paragraph 4 above is appropriate.
7. The filer's proposed effective or distribution date will be August 1, 1996.
8. The Chief Casualty Actuary has reviewed this filing and amendments thereto, and has
determined that the requested loss cost revision, when used by the ISO member and subscriber
companies, would produce rates that are not excessive, inadequate or unfairly discriminatory.
9. Based on these facts the Insurance Department does not oppose the overall loss cost level
changes set forth in Paragraph 4.
10. ISO, as the filer, submitted the pre-filed expert testimony of Kevin B. Thompson, Assistant
Vice President and Actuary with the Commercial Casualty Division of ISO. By stipulation of the
parties on the record, this testimony was admitted without objections. He testified that the
requested revisions would produce rates that are not excessive, inadequate or unfairly
discriminatory.
CONCLUSIONS OF LAW
Based upon the foregoing Findings of Fact, I conclude, as a matter of law, the following:
1. The 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 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. 1995).
3. Pursuant to S.C. Code Ann. § 38-73-910 (Supp. 1995), notice of the filing and of the public
hearing must be published in all newspapers of statewide circulation at least 30 days in advance of
the hearing.
4. The Petitioner has sufficiently established that the increase in premium rates would not be
excessive, inadequate, or unfairly discriminatory. See S.C. Code Ann. § 38-73-10 (a)(1)(Supp.
1995).
5. S. C. Code Ann. § 38-73-920 (Supp. 1995) prohibits an insurer from receiving an insurance
premium rate increase in any line of insurance or in any type of insurance for which a rate increase
has been granted within the preceding twelve months.
ORDER
IT IS THEREFORE ORDERED, that the insurance rate increase requested by the Vigilant
Insurance Company in the filing is approved. The effective date of the increase shall not occur
before the date of this Order.
AND IT IS SO ORDERED.
_______________________________
Ralph King Anderson, III
Administrative Law Judge
Columbia, South Carolina
April 16, 1996 |
