Opinion ID: 1264940
Heading Depth: 1
Heading Rank: 3

Heading: the july 1, 1969 filing

Text: The private passenger automobile liability insurance rates in effect since April 9, 1969, are those approved by the Commissioner by order of March 20, 1969, as a result of the July 1, 1968 Filing submitted by the Rate Office. This 1968 Filing was based (mainly) on experience during 1965 and 1966. On May 20, 1969, the Governing Committee of the Rate Office, after reviewing the statistical data compiled and furnished to it by the Statistical Agents adopted a schedule providing for an increase of 1.5% in the rates applicable to bodily injury insurance and an increase of 11.7% in the rates applicable to property damage insurance, or an overall (composite) increase of 5.3%. The July 1, 1969 Filing set forth the proposed increases, the experience and reasons asserted in justification thereof, and sought the approval of the proposed increases by the Commissioner. This 1969 Filing was based (mainly) on experience during 1966 and 1967. Mize testified that the figures showing the effect of the proposed increases were based on the old manual rates or policy limits of 5/10/5 despite the fact a policy written or renewed after January 1, 1968, was required to have minimum limits of 10/20/5 to serve as proof of financial responsibility (G.S. § 20-309) under G.S. § 20-279.21. He explained that the Rate Office had no actual experience on the 10/20/5 limits through the year 1967. The rate-making process on which the 1969 Filing was based is substantially the same as that used as a basis for the filing in 1968 and prior years. The 1969 Filing asserts as justification for the proposed increases that, during the years 1966 and 1967, weighted equally, the companies incurred losses ($151,733,706.00) in excess of premiums provided for losses ($141,146,346.00) in the amount of $10,587,360.00. In explanation, it was asserted: (1) That the increase in motor vehicle accidents was greater than the increase in automobile registrations; and (2) that the increase in accident frequency was compounded by the increases in claim settlements, attributable to increases in medical and hospital costs, wage losses, automobile labor repair charges, and the prices of automobile parts necessary to make repairs. If the Commissioner determines, after a hearing, that the rates proposed by the Rate Office are excessive, inadequate, unreasonable, unfairly discriminatory, or otherwise not in the public interest, it becomes his duty to issue an order to the Rate Office directing that the proposed rates be altered or revised in the manner and to the extent stated in such order to produce rates, classifications or classification assignments which are reasonable, adequate, not unfairly discriminatory, and in the public interest. (Our italics.) G.S. § 58-248.1. In his order of December 18, 1969, the Commissioner altered or revised the proposals of the Rate Office in two particulars, viz. : First, he adopted a different method for calculating the factor to adjust losses in determining the expense to be allocated for the payment of pending claims; and second, he found that the Rate Office did not take into direct consideration the effect of investment income from unearned premium reserves. See G.S. § 58-246(5). On these grounds, the Commissioner did not approve the overall increase of 5.3% requested in the 1969 Filing but did approve an increase of 2.8% to become effective on and after January 28, 1970.