Appeal from the Order of the Insurance Commissioner of the Commonwealth of Pennsylvania, in the case of In Re: Philip V. Mattes, III v. Hartford Accident and Indemnity Company, No. R78-7-2.
Fred Speaker, with him John G. Harkins, Jr., Marjorie G. Marinoff and Julia A. Conover, Pepper, Hamilton & Scheetz, of counsel, Harold M. Levy, for petitioner.
Hannah Leavitt, Assistant Counsel, with her Anthony A. Geyelin, Chief Counsel, and Allen C. Warshaw, Deputy Attorney General, for respondents.
Philip V. Mattes, Mattes, Mattes & Mattes, P.C., for intervenor, Philip V. Mattes.
Jane D. Elliott, with her James J. McCabe, and Judith K. Mintel, Senior Attorney, and Mark T. Carroll, Duane, Morris & Heckscher, for intervenor, State Farm.
James D. Crawford, Schnader, Harrison, Segal & Lewis, with him William L. Martin, Senior Vice President and General Counsel, for Amicus Curiae American Insurance Association.
Rita L. Bernstein, with her Susan Cary Nicholas, Phyllis N. Segal, and Judith I. Avner, for Amici Curiae, Women's Law Project and NOW Legal Defense and Education Fund.
Walter R. Milbourne, with him James W. Christie, of counsel: Obermayer, Rebmann, Maxwell & Hippel, for Amicus Curiae, The Insurance Federation of Pennsylvania, Inc.
Jeffrey B. Clay, with him Eric L. Brossman and David E. Lehman, McNees, Wallace & Nurick, for Amicus Curiae, Nationwide Mutual Insurance Company, Nationwide General Insurance Company, and Nationwide Mutual Fire Insurance Company.
President Judge Crumlish, Jr. and Judges Mencer, Rogers, Williams, Jr. and Craig. Opinion by Judge Craig. Judge Palladino did not participate in the decision in this case. Dissenting Opinion by President Judge Crumlish, Jr.
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We are required to decide if the Insurance Commissioner exceeded his statutory authority in disapproving the use of sex as a classification basis for automobile insurance rate differentials, under the Casualty and Surety Rate Regulatory Act of 1947 (Rate Act), Act of June 11, 1947, P.L. 538, 40 P.S. §§ 1181-1199.*fn1
After the Insurance Department had earlier approved a rate classification plan filed on behalf of Hartford Accident and Indemnity Company, Philip V. Mattes, the intervening appellee here, filed a complaint under Section 5(b) of the Rate Act, 40 P.S. § 1185(b), questioning the validity of charging him, a 26-year old male, a $360 premium, while charging a female $212, with no difference other than gender being involved. Mattes' position was that the sex-based distinction violates his rights under the laws and the Constitution of the Commonwealth, as well as under the United States Constitution.
Following the receipt of evidence by a hearing examiner, Insurance Commissioner Harvey Bartle issued an order disapproving Hartford's rating plan, with an effective date of April 17, 1981, later extended to April 17, 1982. The Commissioner's adjudication followed Section 3 of the Rate Act, 40 P.S. § 1183, in noting that, under subsection 3(a), due consideration must be given, not only to various actuarial and underwriting factors, but also to "all other relevant factors within
[ 65 Pa. Commw. Page 252]
and outside the Commonwealth;"*fn2 that risks may be grouped by classification for premium determinations, subsection 3(c); and that, under subsection 3(d), rates "shall not be excessive, inadequate or unfairly discriminatory." Although the Commissioner declined to base his decision on constitutional grounds because he regarded judicial precedents as indicating that Pennsylvania's rate system does not constitute sufficient state action to be subject to the self-executing governance of the Fourteenth Amendment or of the Pennsylvania Constitution, art. I, § 28 (Pennsylvania's ERA), his adjudication did look to ERA as an aid in interpreting his powers and duties under the Rate Act. Accordingly, considering Hartford's own evidence that there are no inherent differences between the driving ability of men and women, and that Hartford's ratemaking was derived from loss experience differentials based upon the sex of persons listed in policies as "principal operator" ...