ORDERS:
ORDER ON MOTION TO DISMISS
I. Introduction
On February 25, 1999, the current case was consolidated with seven other cases for purposes of
addressing a Motion to Dismiss which was filed in each of the eight cases by the South Carolina
Department of Insurance (DOI). The Motion to Dismiss is granted based upon Bill 399 ("the Bill"),
carrying Ratification number 2, and signed by the Governor, February 19, 1999.
II. Analysis
A. Bill 399
Bill 399 became effective February 19, 1999 and amends S.C. Code Ann. § 38-73-910. The Bill
gives specific direction in the procedure for seeking a public hearing on an automobile rate increase.
Section 3 of the Bill provides the following:
As it may relate to any provision of law allowing for any person or agency to request
that a public hearing be held: (a) the provisions of Act 154 of 1997 apply and control
with respect to a private passenger automobile insurance rate or rule filing made
pursuant to Act 154 of 1997 for use with private passenger automobile insurance
policies with coverage or policy periods beginning on or after March 1, 1999; and (b)
the request for scheduling of or the holding of a public hearing shall not stay, delay,
or otherwise affect the effective date or implementation of the rate or rule filing as
proposed by the insurer; and (c) any person or agency requesting a public hearing
shall proceed pursuant to Section 38-73-1030 of the 1976 Code.
Thus, the applicable language of the Bill requires that "any person or agency requesting a public
hearing shall proceed pursuant to Section 38-73-1030 of the 1976 Code." Under the terms of § 38-73-1030 one "may make written application to the director or his designee for a hearing" for those
instances in which the party is "aggrieved with respect to any filing which is in effect." (Emphasis
added).
B. Application To Consolidated Cases
It is undisputed that the consolidated cases in this matter all involve automobile insurance rate filings
made pursuant to Act 154 of 1997. Likewise, no dispute exists that the cases all involve filings for
policies providing coverage beginning on or after March 1, 1999. Such being true, "any person or
agency requesting a public hearing shall proceed pursuant to Section 38-73-1030 of the 1976 Code."
Given the demands of that section, two reasons require dismissing the Consumer Advocate's
Request for a hearing.
First, § 38-73-1030 permits a request for a public hearing only for those filings which are in effect.
In the instance case, none of the filings made by the companies involved in this consolidated matter
are in effect, and none of those filings will become effective prior to March 1, 1999. Thus, the
request for a hearing in each of the consolidated cases is premature.
Second, under § 38-73-1030, in seeking a public hearing "[t]he application shall specify the grounds
to be relied upon by the applicant." Here, dismissal is required since the grounds set forth in the
petition fail as either improper or inadequate and, thus, do not state the degree of specificity needed
for the granting of a hearing.
For example, the petition relies upon the improper ground that "[p]ursuant to S.C. Code Ann. § 38-73-910 (Supp. 1997), no increase in automobile insurance rates may be granted unless insureds and
any affected party have been given notice and opportunity to request a public hearing." Petition,
paragraph 4. Such a basis for a hearing is not supported by the law since notice under § 38-73-910
is not required.(1)
Further, the Petition relies upon the inadequate ground that the Consumer Advocate "has been unable
to obtain the filing submitted . . . to the Department of Insurance." Petition, paragraph 5. In essence,
the Consumer Advocate admits a lack of specific information but attempts to excuse the inadequacy
based upon DOI's failure to provide the rate filings. Such a basis is insufficient.
The lack of specificity cannot be excused by an allegation that a State agency failed to provide the
needed information. Rather, instead of alleging a lack of information, the remedy is to obtain the
specific information by an appropriate judicial action such as declaratory judgment or mandamus.(2)
III. Order
The Motion to Dismiss is granted. However, these cases are ended without prejudice. Thus, so long
as otherwise allowed by law, the Consumer Advocate or any member of the public may seek at a
future date a hearing as authorized by the terms of § 38-73-1030. In addition to the captioned case,
the cases dismissed by this Order are as follows:
1) South Carolina Department of Consumer Affairs vs. Fidelity and
Casualty Company of New York and South Carolina Department
of Insurance - Docket No. 99-ALJ-09-0012-CC
2) South Carolina Department of Consumer Affairs vs. Kansas City
Fire and Marine Insurance Company and South Carolina Department
of Insurance - Docket No. 99-ALJ-09-0013-CC
3) South Carolina Department of Consumer Affairs vs. Continental
Insurance Company and South Carolina Department of Insurance
Docket No. 99-ALJ-09-0014-CC
4) South Carolina Department of Consumer Affairs vs. Commercial
Insurance Company of Newark, New Jersey and South Carolina
Department of Insurance - Docket No. 99-ALJ-09-0015-CC
5) South Carolina Department of Consumer Affairs vs. Boston Old
Colony Insurance Company and South Carolina Department of
Insurance - Docket No. 99-ALJ-09-0016-CC
6) South Carolina Department of Consumer Affairs vs. Fireman's
Insurance Company of Newark, New Jersey and South Carolina
Department of Insurance - Docket No. 99-ALJ-09-0017-CC
7) South Carolina Department of Consumer Affairs vs. Glens Falls
Insurance Company and South Carolina Department of Insurance
Docket No. 99-ALJ-09-0018-CC.
AND IT IS SO ORDERED.
RAY N. STEVENS
Administrative Law Judge
Dated: February 25, 1999
Columbia, South Carolina
1. At the time of filing the Petition, the Consumer Advocate correctly stated the law as
expressed in § 38-73-910 since the statute required notice to the public. See Porter v. Jedziniak
(Slip Opinion, January 22, 1999). However, the Bill retroactively removed any duty to provide
notice under § 38-73-910. See Bill, section 2 ("rate or rule filings filed with the South Carolina
Department of Insurance pursuant to the requirements of Act 154 of 1997, . . . , are not subject to
the public notice and public hearing requirements of Section 38-73-910 or Section 38-73-457, or
both, of the 1976 Code regardless of whether the rate or rule filing is filed after Act 154 of 1997
was signed by the Governor on July 2, 1997, and prior to March 1, 1999."). Thus, the notice
requirement of § 38-73-910 is no longer a valid basis for seeking a public hearing.
2. The Consumer Advocate actively attempted to obtain the specifics but reached an
impasse. For months he asked DOI for information and finally filed a Motion to Compel
Discovery. DOI would not release the filings without the Consumer Advocate signing a
confidentiality agreement. The Consumer Advocate refused to sign since he asserted he had no
duty to sign such an agreement. |
