ORDERS:
FINAL DECISION
This matter comes before me pursuant to S.C. Code Ann. §38-73-10 et seq. (Supp. 1998) and
S.C. Code Ann. §§1-23-310, et seq. (Supp. 1998) on Petitioner's request for revisions to its Private
Passenger Automobile loss costs, revisions to various manual rules, and introduction of the 202
Classification Plan and Safe Driver Insurance Plan. The hearing in this matter was held before me
on February 9, 1999. Present at the hearing were Dave J. Clark, Assistant Regional Manager of
Insurance Services Office, Inc., and James C. Gray, Jr., representing Insurance Services Office, Inc.;
Mr. Dean Kruger, Director of Forms and Rates, South Carolina Department of Insurance; Douglas
Concannon, Associate General Counsel, representing the South Carolina Department of Insurance;
and, Ms. Hana Pokorna-Williamson, Staff Attorney, South Carolina Department of Consumer
Affairs.
STATEMENT OF CASE
On October 1, 1998, Insurance Services Office, Inc. (ISO) made a filing with the Director
of Insurance, requesting approval of an overall increase of 0.0% in its Private Passenger Automobile
loss costs, revisions to various manual rules, and introduction of the 202 Classification Plan and the
Safe Driver Insurance Plan, with supporting material (ISO filing PP 98-RLR1). The filing was
amended on November 30, 1998, to introduce a new reinsurance facility recoupment rule to reflect
revised reinsurance facility surcharge procedures.
FINDINGS OF FACT
Having observed the witnesses and exhibits presented at the hearing and closely passed upon
their credibility, taking into consideration the burden of persuasion by the parties, I make the
following Findings of Fact by a preponderance of evidence as to the requested revision in Private
Passenger Automobile loss costs and manual rules:
1. The Director of Forms and Rates reviewed this filing, and determined that the
requested loss cost and manual rules revisions, when used by the ISO member and subscriber
companies, would produce rates that are not excessive, inadequate or unfairly discriminatory. 2. The Consumer Advocate originally questioned the propriety of applying age and sex
classification factors to comprehensive loss costs as proposed by ISO. In response to that concern,
ISO provided statistical support for the proposed classifications and an explanatory memorandum.
Based on that information and his own independent analysis, the Consumer Advocate is now
satisfied that the factors in question will not produce rates that would be unfairly discriminatory.
Therefore, the Insurance Department and the Consumer Advocate's Office do not oppose the overall
loss cost level and manual rules changes and request that the changes be approved.
3. There is no overall loss cost level change as a result of the Petitioner's filing.
4. The Petitioner's most recent loss cost level change was an overall decrease of -4.6%
effective on June 1, 1998.
5. The proposed effective date of the Petitioner's changes will be June 1, 1999.
6. I find that the revision of the loss costs and manual rules is appropriate. Furthermore,
I find that requested loss cost and manual rules revisions, when used by the ISO member and
subscriber companies, will produce rates that are not excessive, inadequate or unfairly discriminatory
CONCLUSIONS OF LAW
Based upon the foregoing 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. § 38-73-1320 (Supp. 1997) and Chapter 23 of Title I of the
South Carolina Code of Laws, as amended.
2. Generally, a request for an insurance loss cost revision is governed by S.C. Code
Ann. §§ 38-73-10 et seq. (Supp. 1998).
3. Petitioner met the burden of proof in a loss cost revision request by establishing
that the revised loss costs would not be excessive, inadequate, or unfairly discriminatory. S.C.
Code Ann. §38-73-10(a)(1) (Supp. 1998).
ORDER
IT IS THEREFORE ORDERED, that the proposed loss costs and other changes
requested by Petitioner are approved with an effective date of June 1, 1999.
IT IS SO ORDERED
Ralph King Anderson, III
Administrative Law Judge
February 22, 1999
Columbia, South Carolina |
