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PENNSYLVANIA SOCIETY ORAL & MAXILLOFACIAL SURGEONS v. INSURANCE COMMISSIONER COMMONWEALTH PENNSYLVANIA (08/05/86)

decided: August 5, 1986.

PENNSYLVANIA SOCIETY OF ORAL & MAXILLOFACIAL SURGEONS, WILLIAM W. WEISS, JR., D.D.S., AND ALLAN S. SHAW, D.D.S., PETITIONERS
v.
INSURANCE COMMISSIONER OF THE COMMONWEALTH OF PENNSYLVANIA, CONTINENTAL CASUALTY COMPANY AND NATIONAL FIRE INSURANCE COMPANY OF HARTFORD, RESPONDENTS



Appeal from the Order of the Pennsylvania Insurance Commissioner, in case of In Re: Continental Casualty Company and National Fire Insurance Company of Hartford, Rate Filings of February 26, 1985, Pennsylvania Dental Professional Liability, Docket No. R85-4-19.

COUNSEL

Harvey Bargle, III, with him, Linda J. Walters, Deckert, Price & Rhoads, for petitioners.

Robert E. J. Curran, Curran, Winning & Fioravanti, P.C., with him, M. Hannah Leavitt and Regina Grayson Jamerson, for respondents.

Judges Rogers, Craig, MacPhail, Doyle, Barry and Colins. Opinion by Judge Rogers. President Judge Crumlish, Jr. did not participate in the decision of this case.

Author: Rogers

[ 99 Pa. Commw. Page 440]

This is the petition of the Pennsylvania Society of Oral and Maxillofacial Surgeons and two of its members (petitioners) for review of an order of the Insurance Commissioner of Pennsylvania denying the petitioners' motion that the respondents, Continental Casualty Company and National Fire Insurance Company of Hartford, be required to furnish the petitioners certain information which they, the petitioners, deemed necessary in order for the petitioners to form judgments as to the propriety of the respondents' filing of proposed increased rates and that the effectiveness of the filing be stayed until the petitioners should obtain the desired information and thereafter until the petitioners should be heard with respect to the proposed filing.

On February 26, 1985, Continental Casualty Company and its affiliate, National Fire Insurance Company

[ 99 Pa. Commw. Page 441]

    of Hartford (respondents), submitted a rate filing to the Pennsylvania Insurance Department (department) pursuant to Section 4 of The Casualty and Surety Rate Regulation Act (Rate Act), Act of June 11, 1947, P.L. 538, 40 P.S. ยง 1184. The filing proposed significant increases in the rates the respondents would charge dentists for liability coverage. They affected so-called Class I, II & III Dentists.

A notice of the filing was published by the department in the Pennsylvania Bulletin on March 16, 1985. The notice, which we reproduce later, briefly described the proposed increases in dentists' professional liability rates; gave notice that copies of the filing were available at the department's offices; and invited persons wishing to submit written comments, questions, or objections to do so by sending them to the department's property and casualty actuary. The notice gave the date the filing was made, February 26, 1985, and informed the reader that "[u]nless formal administrative action is taken prior to March 27, 1985, the filings may be deemed effective by operation of law."

By letter dated March 19, 1985, counsel for the petitioners requested the respondents to supply his clients with "any and all documents, including work papers and drafts" relating to the filing, the actuarial methods used in making the filings, what lower rates the respondents would be satisfied to receive, how investment income was factored into the filing and safety and loss prevention factors considered.

On April 12, 1985, counsel for the petitioners wrote to the respondents asking for additional material, including the insurers' records of claim costs, losses, premiums and expenses. On the same day counsel for the petitioners wrote to the department's actuary reporting that he, counsel, had not received the information he had earlier requested of the respondents, informing

[ 99 Pa. Commw. Page 442]

    the actuary that his clients would be unable to "make a full and complete actuarial report to the Insurance Department concerning this filing" until they had the requested material and requesting that the department make no decision on the filing until his clients should be able to respond.

By letter dated April 12, 1985, counsel for the respondents wrote to the petitioners' counsel enclosing a copy of the respondents' filing but declining to furnish the additional information requested as not required by the Rate Act to be furnished to anyone prior to the effective date of such rates as should be approved by the Insurance Commissioner.

By letter dated April 18, 1985 the department's actuary wrote counsel for the petitioners warning that the statutes require the Insurance Commissioner to review filings within thirty days plus a thirty days' extension if ordered and that the department would soon have to resolve the matter. The department actuary added that he would be interested in any information or comment the petitioners would care to make.

On April 24, 1985, this litigation was begun by the filing of a motion by the petitioners with the department that the respondents be compelled to produce the information requested by the petitioners' counsel in his letters of March 19 and April 12, 1985 and that the effectiveness of the proposed filing be postponed until a reasonable time after the information is produced "so that the Petitioners may be heard on the proposed filing." The department filed an Answer generally opposing the motion.

On May 7, 1985, the presiding officer of the department's hearing office handed down an order which, after describing the history of the controversy, noted that in view of the publication of notice of the filing in ...


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