ORDERS:
ORDER
This matter came before the undersigned for a merits hearing on October 13, 2003, regarding
State Farm Fire & Casualty Company’s (hereafter “State Farm”) 2003 Homeowners’ Rate Filing
(hereafter “the Filing”). William C. Wood, Jr., Esquire, appeared for State Farm. Hana P.
Williamson, Esquire, appeared on behalf of Elliot F. Elam, Jr., the Acting Consumer Advocate for
the State of South Carolina. T. Douglas Concannon, Esquire, appeared on behalf of the South
Carolina Department of Insurance.
Prior to the start of the hearing, the parties announced that an agreement had been reached
regarding the Filing. The terms of the agreement were then placed upon the record. Each party,
through counsel, acknowledged acceptance of the agreement as stated on the record.
The agreement of the parties is as follows:
1.State Farm agrees to a cap of 25% on rate increases for existing homeowners policies.
The implementation of this cap reduces the overall average rate increase for the Filing to 18.7%. The
cap on existing policies shall continue in effect until such time, if ever, that State Farm files for and
is approved for new rates. The 25% cap on rate increases for existing policies does not apply to
increases in coverage or new coverages added to existing policies or to any classification changes.
Increased or new coverages on existing policies may be charged the rate for such policy that is
indicated in the Filing without the 25% cap.
2.Any new business written by State Farm on or after the effective date set forth below
may be written at the rate indicated for such business in the Filing.
3.In all other respects, the Filing is approved as filed.
4.The effective dates for the Filing are as follows: a) for new business - December 15,
2003; b) for renewals - February 1, 2004.
5.Pursuant to S.C. Code Ann. § 37-6-606, or such other statute as may be appropriate,
the Consumer Advocate may file a petition requesting a proceeding before the Administrative Law
Judge Division (hereafter “the Division”) addressing the issue of hurricane modeling and the standards
that are or should be employed in approving and using hurricane models in rate filings. State Farm
and the Department of Insurance agree not to oppose a hearing on such petition before the Division.
Notice to insurers, hurricane modeling companies, and the public of the filing of such a petition and
the request for a hearing on the petition shall be given in accordance with the law pertaining to giving
of notice for rate filings.
6.In agreeing to this resolution regarding the Filing, the Consumer Advocate, State
Farm, and the Department of Insurance do not concur in, accede to, or otherwise agree to be bound
by the methods or models employed by the other parties in formulating or evaluating the Filing, and
each party reserves the right to challenge the methods or models used by the other parties to
formulate or evaluate the Filing if they are used to formulate or evaluate future filings by State Farm.
7.The Division shall retain jurisdiction over the matter to the extent necessary to enforce
the settlement agreement set forth in this order.
Based on the representations of the parties and review of the pleadings and other
papers filed in this contested case proceeding, I find that the proposed agreement is reasonable and
fair and that the resulting rates in the Filing are not excessive, inadequate or unfairly discriminatory
in accordance with S.C. Code Ann. § 38-73-330. The Filing is approved subject to the terms and
conditions set forth above.
IT IS SO ORDERED this 17th day of November, 2003, at Columbia, South Carolina.
________________________________
Marvin F. Kittrell
Chief Administrative Law Judge |
