ORDERS:
ORDER AND DECISION
This matter comes before me pursuant to S.C. Code Ann. § 38-73-10 et. seq. ( Law. Co-op.
Supp. 1994) and S.C. Code Ann. §§ 1-23-310 et. seq. (Law. Co-op. Supp. 1994) on Petitioner's
request for a rate increase for its personal liability umbrella program.
STATEMENT OF CASE
State Farm Fire and Casualty Insurance Company (hereinafter, "State Farm") made a filing with
the Director of the South Carolina Department of Insurance requesting a rate increase of 15.7
percent for its personal liability umbrella program.
The hearing in this matter was held before me on March 29, 1996.
Present at the hearing were James C. Gray, Jr., Esquire, representing State Farm; Gwendolyn L.
Fuller, Esquire, General Counsel, South Carolina Department of Insurance; and Martin Simons,
Deputy Director, Actuarial Services, South Carolina Department of Insurance.
From testimony, exhibits and arguments presented at the hearing, I find and conclude as follows:
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 rate increase for the
personal liability umbrella program:
1. Respondent published notice advising the public that an application for the establishment of
rates by Petitioners had been made and that a hearing would be held on March 29, 1996, in The
State, The Greenville News, The Post and Courier, The Herald and The Darlington Press.
2. The filer's overall requested change was an increase of 15.7% broken down as follows:
Coverage |
|
|
Proposed Change |
Basic Premium* |
|
+21.9% |
UM/UIM |
|
No Change |
Other
Coverages** |
|
+20.0% |
Total |
|
|
|
+15.7% |
* Includes vehicle charges and discounts and farm exposures.
** Includes Additional Exposures, Child Care, and Professional Liability.
3. The last rate change was March 1, 1995.
4. The Department of Insurance has reviewed this filing and its Chief Actuary testified that the
filing will result in personal umbrella casualty rates that are not excessive, inadequate or unfairly
discriminatory.
5. The facts, the Department of Insurance did not oppose the rate increase for the personal
liability umbrella program based upon the documentation presented to it to support the
application.
6. State Farm, as the filer, submitted the pre-filed expert testimony of John D. Napierski. By
stipulation of the parties on the record, this testimony was admitted without objection. He
testified that the requested rates are not excessive, inadequate or unfairly discriminatory.
CONCLUSIONS
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 or unfairly discriminatory, and shall include a
reasonable margin for underwriting profit. S.C. Code Ann. §38-73-430 (Supp. 1995). The State
Administrative Procedures Act, S.C. Code Ann. § 1-23-320 (i) (Supp. 1995), requires that the
decision in a contested case be based upon the evidence and matters officially noted during the
course of the hearing. The filing, in turn, must meet both the statutory standards and be
supported by a preponderance of evidence. Additionally, S.C. Code Ann. § 38-73-920 (Supp.
1995), in pertinent part, 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.
Pursuant to the responsibilities charged to the Department of Insurance, an independent
investigation was made of the proposed filing. All conclusions were based upon evidence, 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 numerous exhibits and testimony in the
record and on the basis of the independent analysis of the rate filing formulated by the staff of the
Insurance Department.
It is my opinion, having fully considered the preponderance of evidence on the record, that the
proposal of State Farm for a revision in personal liability umbrella program rates would produce
rates which would neither be excessive, inadequate or unfairly discriminatory and would be in
compliance with S.C. Code Ann. § 38-73-430.
Therefore, it is Ordered, that the petitioner's proposed overall requested charge of 15.7% is
APPROVED.
AND IT IS SO ORDERED.
__________________________
ALISON RENEE LEE
Administrative Law Judge
March ____, 1996
Columbia, South Carolina. |