Opinion ID: 2179594
Heading Depth: 1
Heading Rank: 5

Heading: Servicing Carrier Fee

Text: Finally, the AFL-CIO contends that the Superintendent's decision to continue the servicing carrier fee set in 1989 was based upon his conclusion that the overall rate increase for 1990 was small rather than upon evidence that a 25.6 percent fee is reasonable in light of the current actual expenses of the carriers servicing the residual market. In this respect, the AFL-CIO contends that the Superintendent failed to comply with statutory standards. 24-A M.R.S.A. § 2363(7-A) provides: Fee for servicing residual market. In every rate filing in which the rating bureau requests a rate adjustment, the superintendent shall take evidence on the issue of whether the fee for servicing the residual market is reasonable. Concurrent with the decision on the rate adjustment, the superintendent shall issue a decision on whether the fee is reasonable, taking into account the rate adjustment approved. If the superintendent determines that the fee is not reasonable, the superintendent shall order an adjustment to the fee, as necessary, to insure that the fee is reasonable. The Bureau of Insurance Rule implementing section 2363(7-A) provides that the review shall consider the actual expenses of servicing carriers. Me. Bureau of Ins. Rules, ch. 440 § 10(C)(1). [7] In his decision, the Superintendent found that the existing fee of 25.6 percent of premiums paid was reasonable given that the overall premium rate increase he approved for 1990 was relatively small. Given the language of section 2363(7-A), the size of the rate increase is clearly relevant on this issue. NCCI's filing contains extensive data regarding the actual expenses of carriers servicing the residual market and the administrative record reveals that the reasonableness of the existing fee was discussed at length during the hearings. On the basis of the evidence, NCCI requested an increase in the fee; the Public Advocate recommended that the fee be reduced to 23.1 percent of premiums paid for 1990. Rejecting both positions, the Superintendent decided that, in the interest of maintaining current levels of servicing, the fee would best be left at 25.6 percent. The AFL-CIO has not presented any statistics indicating that the residual market servicing expenses have changed significantly during the past year and fails to articulate any compelling reason why continuing the fee set in 1989 is unreasonable. In short, the AFL-CIO merely asserts that the Superintendent neglected to consider the actual expense evidence submitted by NCCI without citing any evidence that would compel the court to conclude that the Superintendent's decision to continue the 25.6 percent fee is unreasonable in light of the data on actual expenses. In reviewing ratesetting decisions, the court defers to the expertise of the Superintendent. While the findings could certainly have been more specifically articulated, the Superintendent complied with the statutory standards of workers' compensation rate approval. The AFL-CIO has failed to sustain its burden of proving that the rates, fresh start surcharge and servicing carrier fee set by the Superintendent are unreasonable, unjust or unlawful. Cf. Central Maine Power, 455 A.2d at 39. The entry is: Judgment affirmed. All concurring.