ORDERS:
ORDER
STATEMENT OF THE CASE
This matter comes before me pursuant to S.C. Code Ann. § 38-73-10, et seq. (Supp. 1995) and
S.C. Code Ann. § 1-23-310, et seq. (Rev. 1986 and Supp 1995) upon a request by Republic
Mortgage Insurance Company ("Petitioner") for a mortgage guaranty casualty insurance premium
rate change filed with the South Carolina Department of Insurance ("Department"). A hearing
was held on July 16, 1996 at the Administrative Law Judge Division offices, Columbia, South
Carolina. The request was not contested by the Department, the Consumer Advocate for the
State of South Carolina, nor any member of the public.
Upon review of the testimony and evidence presented, the rate revision is approved.
FINDINGS OF FACT
I make the following Findings of Fact, taking into consideration the burden of the parties to
establish their cases by a preponderance of the evidence and taking into account the credibility of
the witness:
1. This Division has personal and subject matter jurisdiction.
2. Notice of the date, time, place and nature of the hearing was timely given to all parties.
3. Republic Mortgage Insurance Company filed an application with the Department of Insurance
on April 10, 1996, for a revision in its mortgage guaranty casualty insurance premium rates.
Supplemental materials were submitted by Republic Mortgage on July 12, 1996.
4. The Petitioner's aggregate requested change was a decrease of 9.34%, however, prior to July
12, 1996 the Petitioner had requested an overall percentage increase of 0.5 %.
5. The Petitioner's last rate revision occurred in November of 1995, when the petitioner reduced
its overall rate by 0.01%. The Petitioner has not had an increase in its premium rates for
mortgage guaranty insurance in over twelve months.
6. The Petitioner's proposed overall rate change was a decrease of 9.34%, which included an
across the board decrease in the rates charged for both fixed payment and adjustable rate
mortgage guaranty insurance on 30 year, 25 year, and 15 year mortgages.
7. The Petitioner proposed an effective date concurrent with this Court's approval.
8. The Department of Insurance conducted an independent investigation of the filing and its
Deputy Director for Actuarial Services and Chief Actuary, Martin Simons, represented at the
hearing that the rate change request will not produce rates that are excessive, inadequate, or
unfairly discriminatory.
9. The Department recommends that the overall change of -9.34% in mortgage guaranty casualty
insurance premium rates be approved.
CONCLUSIONS OF LAW
Based upon the above Findings of Fact, I conclude, as a matter of law, the following:
1. The South Carolina 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 of the South
Carolina Code of Laws, as amended.
2. Generally, 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), a notice dated June 7, 1996, was
published in five newspapers of statewide circulation at least 30 days in advance of the hearing.
In it, the public was advised that an application for a rate increase by the Petitioner had been made
and that a hearing would be held on July 16, 1996. No member of the public appeared at the
hearing.
4. An excessive rate is one that will produce a rate of return on the insurer's equity that is greater
than the rate of return for other industries of similar risk to that of the insurer in writing this line
of insurance.
5. An inadequate rate is one that will, upon writing the line of insurance, financially impair the
insurer.
6. A discriminatory rate is one that is inconsistent with the expected insurance cost for the
insured.
7. S.C. Code Ann. § 38-73-920 (Rev. 1989) 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. Petitioner has not received any rate level
change in over twelve months.
8. Petitioner has met the burden of proof in a rate change request by establishing that the revised
rates would not be excessive, inadequate, or unfairly discriminatory. S.C. Code Ann. § 38-73-10
(a) (1) (Supp. 1995).
ORDER
IT IS THEREFORE ORDERED, that the proposed insurance rate increases requested by
Petitioner are approved, effective as of the date of this Order.
AND IT IS SO ORDERED.
___________________________________
Marvin F. Kittrell
Chief Judge
Columbia, South Carolina
July ___, 1996 |
