Nationwide Mut. Ins. Co. v. Williams
| Decision Date | 07 July 1966 |
| Docket Number | No. G--419,G--419 |
| Citation | 188 So.2d 368 |
| Parties | NATIONWIDE MUTUAL INSURANCE COMPANY and Nationwide General Insurance Company, Appellants, v. Broward WILLIAMS, State Treasurer and Insurance Commissioner, Appellee. |
| Court | Florida District Court of Appeals |
Keen, O'Kelley & Spitz, Tallahassee, for appellants.
Earl Faircloth, Atty. Gen., Robert J. Kelley, Asst. Atty. Gen., and Walter E. Rountree, Gen. Counsel, for appellee.
Nationwide Mutual Insurance Company and Nationwide General Insurance Company appeal from an order of the Insurance Commissioner denying an increase in automobile insurance rates requested by the two companies. We will refer to Appellants as 'Nationwide' or 'Company.'
Judicial review of insurance rate 'filings' is a recent innovation in this jurisdiction. 1 As used in the insurance code, a 'filing' is in the nature of a petition with supporting documentary data by an insurance company (or a rating organization) seeking approval by the Insurance Commissioner of proposed rates to be charged by the Company to its policyholders. Such approval is required by the mandate of the controlling statutes; therefore, insurance rates charged by insurance companies are subject to regulation by the State of Florida. Administratively, such regulation falls upon the shoulders of the Insurance Commissioner, and his decision necessarily carries with it a presumption of correctness.
The Insurance Commissioner's authority in reviewing a filing is limited. He, unlike other rate-making authorities, cannot accept in part and reject in part. He must either approve or disapprove that which the insurance company elects to submit. True enough, the Commissioner may require additional information from the Company as to the filing, but such procedure does not allow him to utilize his individual judgment for the purpose of modifying the demands of the Company. He must either approve in toto or reject in toto. Therefore, the fundamental burden on the Company's part is to prove by a preponderance of the evidence that each item of its filing will produce rates which are not '* * * excessive, inadequate, or unfairly discriminatory.' And if the Company did not adduce proof of such element to the extent that it will meet the judicial test of substantial evidence, then its appeal to this court must fail. We observe a legislative deficiency upon the subject of regulating insurance rates by not allowing some flexibility on the part of the Insurance Commissioner in reviewing filings. However, we must review the instant cause within the confines of the existing statutory provisions and thereby keep in mind the ultimate question of whether the Company's filing meets the statutory test previously mentioned.
In determining at any time whether to approve or disapprove a filing, the Commissioner is required by statute to give consideration only to the applicable standards delineated in the statutory provisions 2 which inter alia are:
Subsequent to the filing, the Commissioner held a public hearing at which time Nationwide produced two expert witnesses. These witnesses while testifying utilized extensive documentary data included in the filing. A few days after the public hearing, the Commissioner entered the order appealed by which he disapproved the filing for the following reasons:
1. The proposed increase in rates is inequitable on the grounds of insufficient credible experience to justify the application of the uniform percentage increase in rates requested to the territories in this state.
2. The requested rate increase is excessive on the grounds that insufficient evidence has been presented to show that the rising loss trends are the primary cause of the reversal of the Company's favorable financial experience on its auto business countrywide in 1962 and 1963. It is evidence that in the face of these rising loss trends the Company's premium structure and management underwriting policies had produced an increasing profit in the years just prior to 1962.
Nationwide in challenging the validity of the Commissioner's order poses the following two points, which we will treat together, viz.:
1. If a company's credible experience shows that any increase in rates less than that proposed would be inadequate and this experience is consistent with industry experience, and there is no evidence of a change in the company's underwriting policies which would tend to make its rates inadequate, how much evidence, if any, need the company introduce to show that the inadequacy of its rates is due primarily to 'rising loss trends'?
2. If a company's rates in Florida are inadequate, will a lack of credible evidence in some territories in the state prevent its charging adequate rates in the territorial relativities currently used by it and by other companies and approved by the commissioner?
Nationwide began doing business in this state in 1958. On May 1, 1963, it procured an increase of 5% Of the premiums charged and on May 1, 1964, it again procured an increase of 10.8% Of premiums charged. By the instant filing, it seeks an increase in the following percentages of the rates charged for the basic automobile liability providing maximums of $10,000.00--$20,000.00:
Mutual Co. General Co
Bodily injury & property
damages 25.0% 26.3%
Collision 15.4% 16.0%
Medical payments 24.6% 12.0%
In addition, the membership fee for all new business of the Mutual Company would be eliminated and a Resident Student Rule would be adopted to decrease premiums where an unmarried driver was a student in school 100 miles or more from the principal garage of the vehicle.
Witnesses for Nationwide who were seeking to prove that the present rates charged its policyholders were inadequate and that any increase less than that requested would be inadequate, were Nationwide's actuary, Vice-President Robert W. Griffith and Joseph Linder, an independent actuary. Griffith testified that Nationwide's countrywide...
To continue reading
Request your trial
-
Patel v. Specialized Loan Servicing, LLC
...its judgment for that of the agency on an issue of discretion[,]" Fla. Stat. § 120.68(7)(e) ; cf. Nationwide Mut. Ins. Co. v. Williams , 188 So.2d 368, 372 (Fla. Dist. Ct. App. 1966) ("This court is not and should not be burdened with the responsibility of rate-making. Insurance rate-making......
-
Smith v. Department of Ins.
...285 So.2d 386 (Fla.1973); Williams v. Hartford Accident and Indemnity Co., 245 So.2d 64 (Fla.1970); cf. Nationwide Mutual Insurance Co. v. Williams, 188 So.2d 368 (Fla. 1st DCA 1966). We reject the argument that section 9 violates equal protection and due process because it is too broad and......
-
Virginia State AFL-CIO v. Com.
...motion. Code § 38.1--252(3) requires the production of data reflecting Virginia acquisition expenses. See Nationwide Mut. Ins. Co. v. Williams, 188 So.2d 368, 372 (Fla.App.1966). Without such data the Commission cannot know whether Virginia expenses are lower than the national average, nece......
-
Allstate Ins. Co. v. Knutson
...that he may only accept the filing wholly or reject it wholly, the Commissioner refers us to Nationwide Mutual Insurance Company v. Williams, 188 So.2d 368, 369 (Fla.Dist.Ct.App.1966). We think that the most relevant part of that decision is that part which reads: "We observe a legislative ......