30 N.C. App. 477 | N.C. Ct. App. | 1976
Initially, the defendants argue that it was improper for the Commissioner to review the 1970 filing. We agree. A new filing was mandated by G.S. 58-30.3 and G.S. 58-30.4, and a review of the 1970 filing could serve no present purpose. The request of the Rate Office to be allowed to withdraw the 1970 filing should have been granted. Comr. of Insurance v. Rating Bureau, 29 N.C. App. 237, 224 S.E. 2d 223 (1976). Apparently the Commissioner’s sole purpose in undertaking to review the 1970 filing was to use data from that proposal to formulate the rates adopted in his 22 August 1975 order. Such was clearly unnecessary. The Commissioner is authorized by G.S. 58-248 “to compel the production of all books, data, papers and records and any other data necessary to compile statistics for the purpose of determining the underwriting experience of automobile [motorcycle] liability injury and property damage insurance and the other lines of insurance referred to in this Article. . . . ”
On 18 June 1975 the General Assembly ratified “An Act to Abolish Age Discrimination in Automobile Insurance
“§ 58-30.3. Discriminatory practices prohibited. — No insurer shall after September 1, 1975, base any standard or rating plan for private passenger automobiles or motorcycles, in whole or in part, directly or indirectly, upon the age or sex of the persons insured.
“§ 58-30.4. Revised classifications and rates. — The North Carolina Automobile Rate Administrative Office shall file with the Commissioner of Insurance for his approval or other action as provided in G.S. 58-248.1 a revised basic classification plan and a revised subclassification plan for coverages on private passenger (nonfleet) automobiles in this State affected by the provisions of G.S. 58-30.3. Said revised basic classification plan will provide for the following four basic classifications, to wit: (i) pleasure use only; (ii) pleasure use except for driving to and from work; (iii) business use; and (iv) farm use. The North Carolina Automobile Rate Administrative Office shall file with the Commissioner of Insurance for his approval or other action as provided in G.S. 58-248.1 a revised subclassification plan with premium surcharges for insureds having less than two years’ driving experience as licensed drivers, or having a driving record consisting of a record of a chargeable accident or accidents, or having a driving record consisting of a conviction or convictions for a moving traffic violation or violations, or any combination thereof. Said subclassi-fication plan shall be designed to provide not less than one forth of the total premium income of insurers in writing and servicing the aforesaid coverages in this State.
“The revised basic classification and subclassification plans specified in this section shall supersede the existing basic classification and subclassification plans on the here-inabove specified coverages.
“The Commissioner is authorized and directed to implement the plans provided for in this section on September 2, 1975.”
“Such authority as the Commissioner has with respect to motorcycle liability insurance rates is contained in Article 25 of G.S. Chap. 58, which also provides for the creation and prescribes the functions of the North Carolina Automobile Rate Administrative Office. The word ‘motorcycle’ does not appear in Article 25 of G.S. Chap. 58, but the statutes in that Article use the words ‘automobile’ and ‘motor vehicles which are private passenger vehicles’ and ‘private passenger vehicles’ interchangeably, and although none of these terms are further defined in G.S. Chap. 58, we hold that ‘automobile’ liability insurance includes ‘motorcycle’ liability insurance and that the same laws apnly to both.” Comr. of Insurance v. Automobile Rate Office, 24 N. C. App. 223, 210 S.E. 2d 441 (1974).
At the time of the passage of G.S. 58-30.3 and G.S. 58-30.4, the Legislature was aware of our interpretation as set out above. Had it chosen to make a distinction in G.S. 58-30.4 between “automobiles” and “motorcycles,” it would have done so.
On 11 July 1975 the Rate Office filed with the Commissioner a proposal for revised classifications and rates for motorcycles, and this proposal was disapproved by the Commissioner’s 22 August 1975 order.
According to G.S. 58-248, “[t]he Commissioner shall approve proposed changes in rates, classifications or classification assignments to the extent necessary to produce rates, classifications or classification assignments which are reasonable, adequate, not unfairly discriminatory, and in the public interest.” In addition, the Commissioner is vested with authority to revise rates or classifications, charged or filed, which are found to be excessive, unreasonable, unfairly discriminatory, etc., to the extent necessary “to produce rates, classifications, classification assignments which are reasonable, adequate, not unfairly discriminatory, and in the public interest.” G.S. 58-248.1. It is clear that G.S. 58-248.1 does not permit the Commissioner to ignore the function of the Rate Office and encroach upon its authority to propose rates. Chapter 58 grants the Commissioner broad regulatory and supervisory powers for overseeing the faithful execution of the insurance laws of this
“When G.S. 58-248.1 is construed in pari materia with the other provisions of Chapter 58, we think the legislative grant of authority to the Commissioner to order an alteration or revision in the rates charged or filed presupposes the failure of the Rate Office to perform its rate-making duties faithfully. Before the Commissioner can order, ‘to the extent stated in such order,’ a rate alteration or revision under G.S. 58-248.1, he must first make a determination that the rates charged or filed are excessive, inadequate, unreasonable, unfairly discriminatory or otherwise not in the public interest. In reaching that determination he ‘shall give consideration to past and prospective loss experience, including the loss-trend and other relevant factors developed from the latest statistical data available; to such relevant economic data from reliable indexes which demonstrate the trend of costs relating to the line of automobile insurance for which rates are being considered and to such other reasonable and related factors as are relevant to the inquiry.’ G.S. 58-248. . . .
“In the application of these standards, ‘[p]roposed rates shall not be deemed unreasonable, inadequate, unfairly discriminatory or not in the public interest, if such proposed rates make adequate provision for premium rates for the future which will provide for anticipated loss and loss adjustment expenses, anticipated expenses attributable to the selling and servicing of the line of insurance involved and a provision for a fair and reasonable underwriting profit.’ G.S. 58-248; In re Filing by Automobile Rate Office, 278 N.C. 302, 180 S.E. 2d 155 (1971). When existing or proposed rates provide for these expenses and for a fair and reasonable profit, and no more, the Commissioner has no authority to order alteration or revision of rates under G.S. 58-248.1.” Comr. of Insurance v. Automobile Rate Office, id.
In our opinion the Commissioner’s authority to approve or disapprove rates pursuant to G.S. 58-248 is no greater than his authority to revise improper rates or classifications according to G.S. 58-248.1. Both sections require the Commissioner to
Whether the Commissioner acts pursuant to G.S. 58-248 or G.S. 58-248.1 to review a rate proposal filed by the Rate Office, it is incumbent upon the Commissioner to approve, disapprove, or revise the proposed rates to the extent necessary “to produce rates, classifications or classification assignments which are reasonable, adequate, not unfairly discriminatory, and in the public interest.” General Statute 58-248 imposes a mandatory duty upon the Commissioner to act according to this standard in response to a filing by the Rate Office, and G.S. 58-248.1 necessarily incorporates this duty with respect to revisions of Rate Office proposals pursuant to G.S. 58-248.1. Furthermore, whether the Commissioner elects to approve or disapprove pursuant to G.S. 58-248 or revise a proposal pursuant to G.S. 58-248.1, his action must be supported by substantial evidence and comprehensive findings of fact therefrom which comply with the standard prescribed by G.S. 58-248 and quoted above.
The Commissioner’s disapproval of the Rate Office’s 1975 filing, as modified, is based on the following, which are denominated “findings of fact”:
“16. The motorcycle liability insurance rates contained in the July 15, 1975 proposal of the Rate Office as amended by its July 29, 1975 proposal are excessive.
“17. The classification system for motorcycle liability insurance set forth in said proposals is unfairly discriminatory by reason of the following:
“A. The use of motorcycles differs significantly from the use of private passenger automobiles.
*487 “B. The loss experience for motorcycle liability insurance differs significantly from the loss experience for private passenger automobile liability insurance.”
The foregoing are not findings of fact, but are bare assertions by the Commissioner which are not supported by substantial evidence. The findings with respect to the proposed classification system are inadequate for the same reasons.
The Commissioner is provided with adequate staff, expertise, and authority to gather and analyze statistical information. If the Commissioner has reason to believe that a filing by the Rate Office does not comply with statutory standards, he should introduce substantial evidence to support his findings, modifying or rejecting the filing.
In this case the Commissioner’s order is not supported by substantial evidence or necessary findings of fact.
Reversed and remanded.