Court Opinion

ID: 9626744
Source: CourtListenerOpinion
Date Created: 2023-08-22 08:23:08.009534+00
Date Added: 2024-06-11T15:12:30.929121
License: Public Domain

LAVENDER, Justice,
concurring in part and dissenting in part:
I concur in parts I and II of the majority opinion for the reasons stated therein.
Part III of the opinion, however, appears to my view to have resulted from a misconstruction of 36 O.S.1981 § 902, which charges appellee Oklahoma State Board for Property and Casualty Rates with the duty of reviewing rate filings. I therefore must dissent to the majority opinion’s treatment of the questions there involved.
The legislation in question, 36 O.S.1981 § 902, provides in subsection (A):
A. Rates for insurance shall not be excessive, inadequate, or unfairly discriminatory.
No rate shall be held to be excessive unless (1) such rate is unreasonably high for the insurance provided; or (2) a reasonable degree of competition does not exist in the area with respect to the classification to which such rate is applicable and such rate is unreasonably high for the insurance provided.
No rate shall be held to be inadequate unless (1) such rate is unreasonably low for the insurance provided and (2) the continued use of such rate endangers the solvency of the insurer using the same, or unless (3) such rate is unreasonably low for the insurance provided and the use of such rate by the insurer using same has, or if continued will have, the effect of destroying competition or creating a monopoly.
This section sets forth three grounds for rejecting a proposed or existing rate filing: one, if the rate is excessive; two, if the rate is inadequate; three, if the rate is unfairly discriminatory. In enacting this section the Legislature went on to set guidelines for the determination of when a rate filing is to be considered excessive or inadequate. These guidelines clearly set forth the Legislature’s concern that competition be maintained in the industry and *406that competition be the primary regulative mechanism for the industry.
The Legislature’s intent is clearly gleaned from the language of the guidelines contained in section 902(A). The Legislature has stated that a rate is to be considered excessive only when it is unreasonably high. One of the factors foreseen as giving rise to unreasonably high rates is a lack of competition in the classification area. Similarly a rate is to be considered inadequate only when it is unreasonably low and as a result would endanger competition by threatening the solvency of the company offering the rate or of other companies in competition with the offering company.1
The majority opinion, however, has widely departed from the concept of allowing free market forces to govern proposed rates. From the statutory language quoted the majority has concluded that the adequacy of existing rates becomes an issue when a proposed rate filing is presented which would increase rates. The result of the majority’s reasoning is to treat the insurance industry as a public utility. I find no authorization for such treatment in the statutes governing insurance.
It would appear that the majority opinion fails to address the question of whether the evidence before the Board would be sufficient to sustain a finding that the rate increase granted was not excessive. Instead the opinion addresses the question of whether the evidence was sufficient to sustain a finding that the previously existing rates were inadequate. My reading of the statutes would find this point beyond the scope of the Board’s inquiry in this matter. For this reason I must dissent to part III of the majority opinion.

. See Utilities Ins. Co. of Missouri v. State Ins. Bd. of Oklahoma, 184 Okla. 234, 84 P.2d 619 (1938); American Druggists Fire Ins. Co. of Cincinnati, Ohio v. State Ins. Bd. of Oklahoma, 184 Okla. 66, 84 P.2d 614 (1938).