ORDERS:
ORDER AND DECISION
STATEMENT OF THE CASE
On January 26, 1996, the South Carolina Medical Malpractice Liability Insurance Joint
Underwriting Association (JUA) filed an application with the South Carolina Department of
Insurance requesting approval of rate changes in various malpractice insurance policies.
By appropriate notice dated February 20 and 21, 1996, the public was advised that an application
had been made and that a hearing would be held on March 29, 1996. No member of the public
appeared at the hearing.
From the testimony, exhibits and arguments presented at the hearing, I make the following:
FINDINGS OF FACT
1. The JUA is a joint underwriting association which was called into operation in June 1975 by
the South Carolina Department of Insurance to provide medical malpractice insurance within the
state on a reasonable basis.
2. The application represents a 10% increase in physicians', and other medical professionals', 25%
in hospitals' and clinics medical professional, and 25% in general liability insurance. The overall
net increase is 12%.
3. The last increase in rates was in 1994.
4. The consulting actuary utilized by the JUA provided an annual report in which a larger increase
in rate revisions was suggested.
5. JUA reviewed the report and modified the trend factors utilized in determining the increase.
6. The Department of Insurance through its Chief Actuary reviewed the application and the
annual report and testified that the requested revisions would produce rates that are not excessive,
inadequate or unfairly discriminatory.
7. After reviewing the supporting data from the JUA, the Department of Insurance recommends
approval of the application.
CONCLUSIONS OF LAW
The law governing the making of rates is well defined. Insurance rates are regulated under the
Title 38 of the South Carolina Code of Laws, 1976, as amended. The pertinent statutory
requirement is that rates shall be neither excessive, inadequate nor unfairly discriminatory, and
shall include a reasonable margin for underwriting profit. S.C. Code of Laws Section 38-73-430
(Supp. 1995). The filing must meet both the statutory standards and be supported by a
preponderance of evidence. In addition, the premium rate charged must be rates established on an
actuarially sound basis, and must be calculated to be self supporting. S.C. Code Ann. §
38-79-190(4) (Supp. 1995).
An independent investigation was made of the proposed filing. All conclusions were based upon
the documents supporting the filing by the JUA, 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 exhibits, testimony, and pleadings filed on the basis of the independent analysis of the rate
filing formulated by the Department of Insurance.
The proposal of the JUA for a revision of medical malpractice rates would produce rates which
would not be excessive, inadequate or unfairly discriminatory and would be in compliance with
S.C. Code Ann. § 38-73-430.
ORDER
IT IS THEREFORE ORDERED that the proposed rate changes be approved. The effective date
of the proposed rates must not occur before May 1, 1996.
AND IT IS SO ORDERED.
__________________________
ALISON RENEE LEE
Administrative Law Judge
April _____, 1996
Columbia, South Carolina. |