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Administrative Law Court
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SC Administrative Law Court Decisions

CAPTION:
State Farm Fire and Casualty Insurance Company vs. SCDOI

AGENCY:
South Carolina Department of Insurance

PARTIES:
Petitioners:
State Farm Fire and Casualty Insurance Company

Respondents:
South Carolina Department of Insurance
 
DOCKET NUMBER:
96-ALJ-09-0042-CC

APPEARANCES:
n/a
 

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.


Brown Bldg.

 

 

 

 

 

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