{ "id": 8555287, "name": "STATE OF NORTH CAROLINA, ex rel. COMMISSIONER OF INSURANCE v. NORTH CAROLINA FIRE INSURANCE RATING BUREAU", "name_abbreviation": "State ex rel. Commissioner of Insurance v. North Carolina Fire Insurance Rating Bureau", "decision_date": "1976-05-05", "docket_number": "No. 7510INS581", "first_page": "237", "last_page": "248", "citations": [ { "type": "official", "cite": "29 N.C. App. 237" } ], "court": { "name_abbreviation": "N.C. Ct. App.", "id": 14983, "name": "North Carolina Court of Appeals" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "165 S.E. 2d 207", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1969, "pin_cites": [ { "page": "222" } ], "opinion_index": 0 }, { "cite": "275 N.C. 15", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8557738 ], "year": 1969, "pin_cites": [ { "page": "37" } ], "opinion_index": 0, "case_paths": [ "/nc/275/0015-01" ] }, { "cite": "221 S.E. 2d 96", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "28 N.C. App. 409", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8549596 ], "year": 1976, "opinion_index": 0, "case_paths": [ "/nc-app/28/0409-01" ] }, { "cite": "223 S.E. 2d 512", "category": "reporters:state_regional", "reporter": "S.E.2d", "year": 1976, "opinion_index": 0 }, { "cite": "29 N.C. App. 182", "category": "reporters:state", "reporter": "N.C. App.", "case_ids": [ 8554900 ], "year": 1976, "opinion_index": 0, "case_paths": [ "/nc-app/29/0182-01" ] }, { "cite": "119 S.E. 206", "category": "reporters:state_regional", "reporter": "S.E.", "year": 1923, "opinion_index": 0 }, { "cite": "186 N.C. 202", "category": "reporters:state", "reporter": "N.C.", "case_ids": [ 8653251 ], "year": 1923, "opinion_index": 0, "case_paths": [ "/nc/186/0202-01" ] } ], "analysis": { "cardinality": 728, "char_count": 22984, "ocr_confidence": 0.683, "pagerank": { "raw": 3.302720229484814e-07, "percentile": 0.8719921508937394 }, "sha256": "beaaef11171b6167980907df1626aaa9ce0e2c0221fa9f0768b0f4727b25c624", "simhash": "1:4b72278e239b5b85", "word_count": 3827 }, "last_updated": "2023-07-14T16:29:22.308082+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "Judge Morris concurs.", "Judge Martin dissents." ], "parties": [ "STATE OF NORTH CAROLINA, ex rel. COMMISSIONER OF INSURANCE v. NORTH CAROLINA FIRE INSURANCE RATING BUREAU" ], "opinions": [ { "text": "PARKER, Judge.\nChapter 1079 of the 1949 Session Laws, which was ratified and became effective on 21 April 1949, was entitled \u201cAn Act to amend Chapter 58 of the General Statutes of North Carolina to provide for the holding of public hearings on rate filings.\u201d Section 1, subsection (2) of that act enacted into law a new section of the General Statutes, G.S. 58-27.2, subsection (a) of which provides as follows:\n\u201cG.S. 58-27.2 (a) \u2014 Whenever any statutory or licensed insurance rating bureau or any insurance company making its own rate filings makes any proposal to revise an existing rating schedule, the effect of which is to increase or decrease the charge for insurance, or to set up a new rating schedule, and such rating schedules are subject to the approval of the Commissioner, such bureau or company shall file its proposed change and supporting data with the Commissioner who shall thereafter, before acting upon any such proposal, order a public hearing thereon, if such hearing is required by the rules and regulations adopted by the insurance advisory board and in accordance therewith, and fix a time and place for such hearing not earlier than 20 days thereafter. The bureau or the company making such proposal shall, not more than 10 days prior to the time of such public hearing cause to be published in a daily newspaper or newspapers published in North Carolina, and in accordance with the rules and regulations of the insurance advisory board, a notice, in the form and content approved by the Commissioner, setting forth the nature and effect of such proposal and the time and place of the public hearing to be held.\u201d\nSubsection (b) of G.S. 58-27.2 expressly makes the provisions of that statute \u201capplicable to all rating bureaus operating in North Carolina.\u201d\nCh. 1079 of the 1949 Session Laws also amended G.S. 58-27.1 by adding thereto subsection (c), which provides as follows:\n\u201cG.S. 58-27.1 (c) The insurance advisory board shall, within three months of the ratification of this subsection promulgate rules and regulations to provide for the holding of public hearings before the Commissioner of Insurance, or any person employed by the Insurance Department authorized by the Commissioner to act in his stead, on such proposals, to revise an existing rating schedule the effect of which is to increase or decrease the charge for insurance or to set up a new rating schedule, as are subject to the approval of the Commissioner and as, in the judgment of the board, are of such nature and importance as to justify and require a public hearing. The board shall have authority to determine by such rules and regulations the circumstances under which such public hearings shall be held and the Commissioner of Insurance shall hold public hearings in accordance with such rules and regulations. From time to time the board may revise and change its promulgated rules and regulations in such manner as, in its judgment, the public interest may require.\u201d\nActing pursuant to the authority granted to it by G.S. 58-27.1 (c), the North Carolina Insurance Advisory Board adopted, and on 1 March 1950 filed with the Secretary of State, rules and regulations providing for the holding of public hearings before the Commissioner of Insurance on proposals to revise insurance rates. Insofar as pertinent to the questions raised on this appeal, these rules and regulations provide as follows:\n\u201cPursuant to the provisions of the aforementioned act and to afford all citizens and interested persons as full an opportunity as possible to be heard in all cases where substantial rights of the public are involved in such matters, and without undue delay on minor rate adjustments or classification changes, the following rules are adopted:\n1. Any rate adjustment or proposal involving a general revision of an existing rating schedule which the Commissioner or the Advisory Board finds upon investigation involves a material change in the rate level, or the setting up of a new rating schedule of a material nature for a kind of insurance or for a separately rated major subdivision thereof, shall be subject to a public hearing prior to action thereon by the Insurance Commissioner. Any proposal involving only a change or changes in specific items of an existing rating schedule shall not be subject to a public hearing unless the Insurance Commissioner, upon review, decides that a public hearing is justified and required by the nature and importance of the proposed change or changes and is in the public interest.\n3. Public hearings herein provided for shall be conducted by the Commissioner of Insurance or, in his discretion, by any reasonable person employed and duly authorized to act in his stead.\n4. The time and place of any public hearing shall be determined by the Commissioner, who shall give due regard to the convenience of all interested parties. In no event shall a public hearing be scheduled prior to twenty days after submission of a rate filing.\n5. Publication of notice of any public hearing shall be made by the bureau or company which is the proponent of the rate filing. The notice shall set forth the nature and effect of the proposal and the time and place of the public hearing to be held. The notice shall be published in one or more daily newspapers published in this State not more than ten days prior to the time set for the hearing. The Commissioner shall approve the form and content of such notice. Notice regarding hearings where there is no bureau or company proponent shall be given by the Insurance Commissioner.\n8. The hearing shall be open to the public and any interested person or persons may appear and be heard, either in person or by a representative, and produce oral or written evidence relevant and material to the subject matter.\n10. At all such hearings the proponent of the rate adjustment shall be accorded the opportunity to offer evidence in rebuttal.\n* * *\n13. Subsequent to a public hearing on a filing made with the Insurance Department, immediate consideration shall be given to all the information available. Announcement of the Commissioner\u2019s decision shall be made public as soon after the hearing as is feasible but in no event before any approved bulletins, rate schedules or amendments to schedules or manuals shall be placed in the mail to agents and companies affected, in order that the Commissioner\u2019s decision shall be put into effect. The effective date shall be the date specified in the bulletins, rate schedules or amendments to schedules or manuals, mailed to the agents and companies.\u201d\nThus, G.S. 58-27.2 (a) and the rules and regulations adopted by the North Carolina Insurance Advisory Board pursuant to the statutory authority granted it by G.S. 58-27.1 (c) clearly and explicitly required the Commissioner of Insurance, before acting upon the proposal for a 19% reduction in extended coverage and windstorm insurance premium rates filed with him by the Fire Insurance Rating Bureau on 6 January 1975, to hold a public hearing on such proposal, after the publishing of notice thereof to the public, and in accordance with such rules and regulations. Insofar as this statutory requirement for a public hearing may be repugnant to what the parties have in their correspondence sometimes referred to as the \u201cdeemer provisions\u201d of G.S. 58-131.1, the provisions of G.S. 58-27.2 (a) mandating the public hearing must prevail. When two statutes are in conflict and cannot reasonably be reconciled, the statute last enacted repeals the earlier statute to the extent of the repugnancy, even absent a specific repealing clause. Commissioners v. Commissioners, 186 N.C. 202, 119 S.E. 206 (1923). As above noted, G.S. 58-27.2 (a) was enacted in 1949, while G.S. 58-131.1 was enacted in 1945. Therefore, whatever the legal effect of a \u201cwaiver\u201d by the Fire Insurance Rating Bureau of the \u201cdeemer\u201d provisions of G.S. 58-131.1 may be, it is clear that neither the Rating Bureau nor the Insurance Commissioner may lawfully dispense with the public hearing in cases in which a public hearing is mandated by G.S. 58-27.2(a). Moreover, the busy schedule of the Commissioner does not justify failure to comply with the statute\u2019s mandate. We note that G.S. 58-27.1 (c) and the rules adopted by the Insurance Advisory Board pursuant thereto permit the public hearing to be held either before the Commissioner or before \u201cany person employed by the Insurance Department authorized by the Commissioner to act in his stead.\u201d\nIn the present case no hearing has been held on the rate filing made by the Rating Bureau on 6 January 1975. The only hearing of any nature held in connection with that filing was the hearing before the Insurance Commissioner held on 28 April 1975, and that hearing was held solely to consider the Rating Bureau\u2019s motion to set aside the Commissioner\u2019s ex parte letter ruling of 11 April 1975. At no time was any notice of hearing published as is required by G.S. 58-27.2 (a) and by paragraph Number 5 of the above cited rules of the Insurance Advisory Board. By entering the orders here appealed from without first conducting the public hearing mandated by the statute the Insurance Commissioner exceeded his authority. Comr. of Insurance v. Automobile Rate Office, 29 N.C. App. 182, 223 S.E. 2d 512 (filed 7 April 1976) ; Comr. of Insurance v. Rating Bureau, 28 N.C. App. 409, 221 S.E. 2d 96 (1976).\nFor an additional reason the orders appealed from must be reversed. When those orders were entered, the rate filing on which they purportedly were based had already been withdrawn by the Rating Bureau which filed them. We find nothing in Article 13 of Chapter 58 of the General Statutes, under which the North Carolina Fire Insurance Rating Bureau was created, which deals with the right of the Rating Bureau to withdraw a filing once made. We see no sound reason, however, why this may not be done, at least if done prior to the time a public hearing on the filing has been set. Certainly it is desirable that any rate filing be based upon the most current data available. As noted by our Supreme Court, \u201c[w]hile the statute requires that a hearing by the Commissioner upon a filing by the Bureau be held promptly, it is well within the bounds of possibility that, between the filing and the hearing, experience may be had which would be most relevant to the determination of the direction of a projection of the present \u2018loss trend\u2019 into the future.\u201d In re Filing by Fire Ins. Rating Bureau, 275 N.C. 15, 37, 165 S.E. 2d 207, 222 (1969). That case held that evidence of such more recent experience is admissible at the hearing. Even so, when because of delay in setting the hearing the data upon which a filing was made becomes obsolete, orderly procedure may call for the withdrawal of the old filing and the making of a new one based upon more recently available information. Accordingly, we hold that in such cases the Rating Bureau may, in its discretion, withdraw a filing if this is done prior to the setting of a public hearing thereon.\nIt should be noted that this holding recognizing the right of the Rating Bureau to withdraw a filing in no way limits the authority of the Insurance Commissioner to carry out his statutory duty to achieve insurance premium rates \u201cas will produce a fair and reasonable profit only.\u201d G.S. 58-131.2 gives the Commissioner power, even without any filing by the Rating Bureau, \u201cto investigate at any time the necessity for a reduction or increase in rates.\u201d Any order made by the Commissioner pursuant to that authority, however, may be made only after giving the Rating Bureau and insurers who may be affected thereby reasonable notice and hearing if hearing is requested. G.S. 58-131.5.\nWe find it unnecessary to pass upon appellant\u2019s contention that in entering the orders appealed from the Commissioner violated appellant\u2019s constitutional rights. The statutes above cited make adequate provision for protecting appellant\u2019s due process rights to notice and hearing. It is only necessary that the Commissioner comply with the mandates of the statutes.\nFor the reasons noted, the orders appealed from are\nVacated.\nJudge Morris concurs.\nJudge Martin dissents.", "type": "majority", "author": "PARKER, Judge." } ], "attorneys": [ "Attorney General Edmisten by Assistant Attorney General Isharn B. Hudson, Jr. for John Randolph Ingram, Commissioner of Insurance.", "William T. Joyner and J. E. Tucker for North Carolina Fire Insurance Rating Bureau, Appellant." ], "corrections": "", "head_matter": "STATE OF NORTH CAROLINA, ex rel. COMMISSIONER OF INSURANCE v. NORTH CAROLINA FIRE INSURANCE RATING BUREAU\nNo. 7510INS581\n(Filed 5 May 1976)\n1. Insurance \u00a7 116\u2014 fire insurance rates \u2014 necessity for public hearing\nG.S. 68-27.2(a) and the rules and regulations adopted by the N. C. Insurance Advisory Board pursuant to the statutory authority granted it by G.S. 68-27.1 (c) required the Commissioner of Insurance, before acting upon a proposal for a 19% reduction in extended coverage and windstorm insurance premium rates filed with him by the Fire Insurance Rating Bureau, to hold a public hearing on such proposal, after the publishing of notice thereof to the public, and in accordance with such rules and regulations.\n2. Insurance \u00a7 116\u2014 fire insurance rates \u2014 \u201cdeemer\u201d provisions \u2014 necessity for public hearing\nInsofar as the G.S. 68-27.2 (a) requirement for a public hearing on a proposal to revise fire insurance rates may be repugnant to the \u201cdeemer provisions\u201d of G.S. 68-131.1, the statutory provisions mandating a public hearing must prevail since those provisions were last enacted.\n3. Insurance \u00a7 116\u2014 fire insurance rate filing \u2014 withdrawal by Rating Bureau\nThe N. C. Pire Insurance Rating Bureau may, in its discretion, withdraw a rate filing at any time prior to the setting of a public hearing thereon when, because of delay in setting the hearing, the data upon which a filing was made has become obsolete.\n4. Insurance \u00a7 116\u2014 fire insurance rates \u2014 authority to investigate absent rate filing \u2014 necessity for notice and hearing\nAny rate order made by the Insurance Commissioner pursuant to the authority of G.S. 58-131.2 \u201cto investigate at any time the necessity for a reduction or increase in rates\u201d may be made only after giving the Rating Bureau and insurers who may be affected thereby reasonable notice and hearing if hearing is requested. G.S. 68-131.6.\nJudge MARTIN dissents.\nAppeal by respondent, The North Carolina Fire Insurance Rating Bureau, from orders issued by the Commissioner of Insurance on 11 April 1975, 28 April 1975, and 30 April 1975. Heard in the Court of Appeals 21 October 1975.\nThis rate-making proceeding was instituted on 6 January 1975 by a filing with the Commissioner of Insurance by the North Carolina Fire Insurance Rating Bureau seeking a 19% reduction in extended coverage and windstorm insurance premium rates.\nThe questions presented by this appeal, however, are placed in clearer perspective when viewed against the background of certain related prior proceedings.\nBy letter dated 8 January 1973 the Rating Bureau made a filing with the Commissioner of Insurance seeking revisions in extended coverage and windstorm rates indicating an overall reduction of 23.3%, coupled with a uniform $100.00 deductible applicable to all extended coverage perils. This filing was based on review of experience for the years 1964-1970 inclusive. By letter dated 7 March 1973 addressed to the Manager of the Rating Bureau, the Commissioner replied as follows:\n\u201cThis has reference to your filing dated January 8, 1973.\nIt is not possible to schedule a public hearing at this time due to my very busy schedule. Therefore, I am requesting that you waive the deemer provisions of General Statute 58-131.1.\nA public hearing will be set as soon as my schedule permits.\nYours very truly,\ns/ John Randolph Ingram\nCommissioner of Insurance\u201d\n(The statutory provision referred to in Commissioner Ingram\u2019s letter as the \u201cdeemer provisions\u201d is contained in the last sentence of G.S. 58-131.1, which is as follows:\n\u201cEvery rating method, schedule, classification, underwriting rule, bylaw or regulation submitted to the Commissioner for approval shall be deemed approved, if not disapproved by him in writing within 60 days after submission.\u201d)\nBy letter dated 9 March 1978 the Manager of the Rating Bureau responded as follows:\n\u201cDear Commissioner Ingram:\nReview of Experience-Extended Coverage 1964-1970 Inclusive\nIn accordance with your request of March 7, 1973, this Bureau waives the deemer provisions of General Statute 58-131.1.\nWe request, however, that the public hearing will be set as soon as practicable.\u201d\nNo public hearing was set. On 22 June 1973 the Governing Board of the Rating Bureau withdrew the filing made 8 January 1973 and notified the Commissioner that upon completion of review of more recent experience data which had become available, a new filing would be made.\nOn 21 September 1973 a new filing was made based on review of experience for the years 1965-1971 inclusive and indicating an overall reduction of 22.6%. By letter dated 20 November 1973 the Commissioner requested waiver of the provisions of G.S. 58-131.1 with respect to the 21 September 1973 filing, again stating that due to his very busy schedule it was not possible to schedule a public hearing at that time and stating that a public hearing would be set as soon as his schedule permitted. In accordance with the Commissioner\u2019s request, the Rating Bureau by letter dated 27 November 1973 waived the provisions of G.S. 58-131.1 with respect to the 21 September 1973 filing and requested that the public hearing be set as soon as practicable. No public hearing was set. On 31 May 1974 the Governing Board of the Rating Bureau withdrew the filing made 21 September 1973 and notified the Commissioner that a new filing would be made upon completion of review of more recent experience data.\nOn 6 January 1975 the Rating Bureau made the filing which led to the events giving rise to the present appeal. This filing was based on experience for the six years 1968-1973 inclusive and indicated a 19% reduction in rates without provision for any additional deductible. By letter dated 5 March 1975, addressed to the Manager of the Rating Bureau, the Commissioner replied as follows:\n\u201cThis has reference to your filing dated January 6, 1975 proposing revised rates for Extended Coverage.\nIt is not possible to schedule a public hearing on this filing at this time and you are requested to waive the deemer provisions of General Statute 58-181.1.\nYours very truly,\nJohn Randolph Ingram\nCommissioner of Insurance\ns/R. E. Holcombe\nFire & Casualty Actuary\u201d\nThis letter from the Commissioner dated 5 March 1975 was received by the Rating Bureau on 7 March 1975 and crossed in the mail the following letter, dated 6 March 1975, from the Manager of the Rating Bureau to the Commissioner:\n\u201cDear Commissioner Ingram\nReview of Experience \u2014 Extended Coverage 1968-1973 Inclusive\nPursuant to action of the Governing Board of this Bureau, the captioned filing is hereby withdrawn.\nThis action was taken on the advise of the General Counsel of the Bureau for the primary purpose of avoiding possible controversy at this time about the effect of the operation of the deemer provision of the Statute (G.S. 58-131.1) or about the effect of a waiver by the Bureau.\nYours very truly,\ns/ C. B. AYCOCK\nManager\u201d\nWhen the Commissioner\u2019s letter of 5 March 1975, which requested the Rating Bureau to waive the \u201cdeemer provisions\u201d of G.S. 58-131.1 with respect to the filing dated 6 January 1975, was received in the office of the Rating Bureau on 7 March 1975, the Manager of the Bureau responded to the Commissioner by letter dated 7 March 1975 which referred the Commissioner to the Manager\u2019s previous letter, dated 6 March 1975, withdrawing the filing. No further filing was made by the Rating Bureau relating to premium rates for extended coverage and windstorm insurance.\nBy letter dated 11 April 1975 the Commissioner of Insurance wrote to the Manager of the Rating Bureau as follows:\n\u201cThis has reference to your submission of January 6, 1975 with attached statistical exhibits.\nPursuant to authority conferred under General Statute 58-131.2 the reduction of 19% set forth in your filing is hereby approved. An additional decrease of 3.4% as determined by the attached rate development exhibit is also hereby approved.\nYou are directed to implement these reductions effective May 1, 1975.\nYours very truly,\ns/John Randolph Ingram\nCommissioner of Insurance\u201d\nAttached to this letter was a table labeled \u201cDevelopment of Indicated Rate Level Change.\u201d\nOn 22 April 1975 the North Carolina Fire Insurance Rating Bureau filed a motion with the Commissioner of Insurance to set aside his order as contained in his letter dated 11 April 1975, stating as grounds for the motion that:\n(1) The filing to which the 11 April 1975 order referred was not then before the Commissioner for consideration, having been withdrawn by the Bureau by its letter to the Commissioner dated 6 March 1975.\n(2) The 11 April 1975 order was entered without prior notice to the Bureau and without opportunity afforded the Bureau or any other persons to be heard with respect thereto.\n(3) No findings of fact or conclusions of law were made to support the 11 April 1975 order.\n(4) No public hearing had been held in North Carolina on the subject of fair rates for extended coverage insurance for more than two years, and the public interest would best be served by a full public hearing based on a revised and updated filing on extended coverage rates which the Rating Bureau was preparing and which it expected to file within thirty days.\nOn 28 April 1975 a hearing was held before the Commissioner on the Rating Bureau\u2019s motion to set aside his 11 April 1975 order. At the conclusion of the hearing on 28 April 1975 the Commissioner orally announced that insofar as the 19% reduction was concerned, it was his order that the reduction go into effect with an effective date of 1 May 1975, and he set 12 May 1975 as the date to hear the Rating Bureau on the further reduction of 3.4%.\nOn 30 April 1975 the Commissioner signed a written \u201cSupplemental Order to Letter Order of April 11, 1975.\u201d In this he \u201caffirmed\u201d that portion of his letter order dated 11 April 1975 which ordered a reduction of 19% in extended coverage insurance rates, and stayed the portion of his letter order of 11 April 1975 which ordered an additional reduction of 3.4%, pending a hearing on the additional reduction to be held on 12 May 1975.\nOn 30 April 1975 the North Carolina Fire Insurance Rating Bureau filed exceptions and notice of appeal from the Commissioner\u2019s letter order dated 11 April 1975 and from his oral order entered at the conclusion of the 28 April 1975 hearing which denied the motion to set aside the 11 April 1975 order. Also on 30 April 1975, after the Rating Bureau received a copy of the Commissioner\u2019s written \u201cSupplemental Order\u201d of that date, the Rating Bureau filed a supplemental notice of appeal and exceptions.\nAttorney General Edmisten by Assistant Attorney General Isharn B. Hudson, Jr. for John Randolph Ingram, Commissioner of Insurance.\nWilliam T. Joyner and J. E. Tucker for North Carolina Fire Insurance Rating Bureau, Appellant." }, "file_name": "0237-01", "first_page_order": 269, "last_page_order": 280 }