SC Administrative Law Court Decisions

STATEMENT OF THE CASE

This matter is before me on the application of the Unisun Insurance Company ("Unisun"), Amerisure Insurance Company ("Amerisure") and Michigan Mutual Insurance Company ("Michigan Mutual") for approval of an increase in their private passenger automobile rates.

On or about January 26, 1996, Unisun, Amerisure and Michigan Mutual filed applications with the Chief Automobile Analyst, Department of Insurance, requesting approval of a +5.0% base rate increase.

The hearing was held before me on March 29, 1996.

Notice of the hearing had been published in the State Register, Post and Courier, The State, The News and Press, The Greenville News and The Herald newspapers. (see attached Exhibit 1). No members of the public attended.

Present at the hearing were Michael A. Molony, Esquire, Attorney for Unisun; Gwendolyn L. Fuller, Esquire, Department of Insurance; and Catherine Edwards Heigel, Esquire, Department of Consumer Affairs.

FINDINGS OF FACT

From testimony, exhibits and arguments presented at the hearing, I find, conclude and recommend as follows:

1. Unisun has requested an overall +5.0% base rate change for its voluntary private passenger automobile insurance business.

2. Unisun's indicated rate level change and proposed rate change by coverage are as follows:

3. The Bodily Injury and Property Damage proposed change differs by each territory. These proposed rate changes are supported by the territorial experience for Total Liability sorted by each territory.

4. This revision of automobile insurance rates for private passenger automobile is based on Unisun's experience for the latest three (3) Calendar/Accident years ending December 31, 1995. The indications are for an overall increase of +14.0%. Unisun proposes a change of +7.1% Bodily Injury Liability and +19.1% Property Damage Liability rate change in its Voluntary Private Passenger Automobile insurance rates. With no change applicable to Uninsured/Underinsured Motorists coverage, the overall change to liability coverages amounts to +9.7%, compared to the indicated need of +14.0%. With no change to Comprehensive and Collision coverages, the overall effect of this request amounts to +5.0%.

5. The last rate increase requested by the Petitioner was February 15, 1995.

6. The Consumer Advocate had no objection to Unisun's proposed overall increase of 5.0% in Private Passenger Automobile rates.

7. The Chief Actuary of the South Carolina Department of Insurance has reviewed this filing and testified that the overall increase of 5.0% would produce rates that are not excessive, inadequate or unfairly discriminatory.

8. The Department of Insurance recommends that the overall increase of 5.0% in Private Passenger Automobile rates be approved.

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) and 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 any 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 (12) 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 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.

Having fully considered the preponderance of evidence on the record, the proposal of the Unisun Insurance Company, Amerisure Insurance Company and Michigan Mutual Insurance Company for a revision in Private passenger Automobile 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.

IT IS THEREFORE ORDERED that the proposed rates be approved effective April 15, 1996.

AND IT IS SO ORDERED.

_____________________________

ALISON RENEE LEE

Administrative Law Judge

March _____, 1996

Columbia, South Carolina.