#### STATE OF NORTH CAROLINA, EX REL. COMMISSIONER OF INSURANCE v. COMPENSATION RATING AND INSPECTION BUREAU OF NORTH CAROLINA

No. 7510INS636

(Filed 21 January 1976)

Master and Servant § 80— workmen’s compensation rate filing — disapproval without notice and hearing

The Commissioner of Insurance erred in disapproving a workmen’s compensation rate filing made by the Compensation Rating and Inspection Bureau without giving the Bureau notice and an opportunity to be heard. G.S. 58-27.2(a).

Dependant appeals from an order of the Commissioner of Insurance, John Randolph Ingram, entered 25 April 1975. Heard in the Court of Appeals 18 November 1975.

On 7 December 1972, the appellant, the Compensation Rating and Inspection Bureau of North Carolina, filed with the Commissioner of Insurance of North Carolina a proposal on behalf of its member companies which write workmen’s compensation insurance in North Carolina seeking increased and revised workmen’s compensation rates for classifications which have exposure under the United States Longshoremen’s and Harbor Worker’s Compensation Act, known as “F” classifications.

Following the 7 December 1972 filing the Bureau made repeated requests of the Commissioner that the filing be acted upon because of the fact that its member insurance carriers were being required to pay benefits under the “F” classifications at substantially high levels although the approved rates for such coverage continued to reflect the lower benefit levels previously in effect. Included among these requests were letters from the General Manager of the Bureau addressed to the Commissioner dated 16 April 1978, 30 November 1973, 31 December *4101978, 17 January 1974, 1 April 1974, and 24 July 1974. A request for action upon the 7 December 1972 filing was also made to the Commissioner by counsel for the Bureau in a letter dated 2 August 1974.

Despite the repeated requests on the part of the Bureau for consideration of its 7 December 1972 filing, the Commissioner took no action on the filing until 25 April 1975 when he issued an order disapproving the filing. The Commissioner’s order of 25 April 1975 was issued without any prior notice to the Bureau and without affording to the Bureau any opportunity to be heard. On 23 May 1975, the Bureau filed its Motion to Vacate Order in which it requested the Commissioner to rescind and set aside his order of 25 April 1975, to allow the Bureau to file such amendments and supplemental data and exhibits to its 7 December 1972 filing, and to set the matter for hearing.

Also on 23 May 1975, the Bureau filed its Exception and Notice of Appeal to the North Carolina Court of Appeals.

No action was taken by the Commissioner on the Motion to Vacate.

Attorney General Edmisten, by Assistant Attorney General I sham B. Hudson, Jr., for the State.

Allen, Steed and Pullen, P.A., by Thomas W. Steed, Jr., for defendant appellant.

MARTIN, Judge.

Appellant contends that the order of the Commissioner dated 25 April 1975 disapproving the rate filing proposal is contrary to the applicable statutory rate-making procedure found in G.S. 58-27.2 (a) in that the Commissioner failed to hold a hearing on the matter. We agree.

To affirm an order denying rate increases when there was no opportunity for notice and hearing subjects both the public and the insurance carriers to danger of arbitrary action by the Commissioner.

Reversed and remanded for further proceedings in accordance with this opinion.

Judges Morris and Parker concur.