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NATIONWIDE MUTUAL INSURANCE COMPANY ET AL. v. COMMONWEALTH PENNSYLVANIA (03/02/87)

decided: March 2, 1987.

NATIONWIDE MUTUAL INSURANCE COMPANY ET AL., PETITIONERS
v.
COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT ET AL., RESPONDENTS. THE TRAVELERS INDEMNITY COMPANY ET AL., PETITIONERS V. COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT ET AL., RESPONDENTS. ALLSTATE INSURANCE COMPANY ET AL., PETITIONERS V. COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT ET AL., RESPONDENTS. COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT, PLAINTIFF V. TRAVELERS INDEMNITY COMPANY ET AL., DEFENDANTS. COMMONWEALTH OF PENNSYLVANIA, INSURANCE DEPARTMENT, PLAINTIFF V. ALLSTATE INSURANCE COMPANY ET AL., DEFENDANTS



Original Jurisdiction in the cases of Nationwide Mutual Insurance Company, et al., The Travelers Indemnity Company, et al., and Allstate Insurance Company, et al. v. Commonwealth of Pennsylvania, Insurance Department, et al., and No. 389 C.D. 1987 and 390 C.D. 1987, in the cases of Commonwealth of Pennsylvania, Insurance Department v. Travelers Indemnity Company et al. and Allstate Insurance Company, et al.

COUNSEL

Jeffrey B. Clay, McNees, Wallace & Nurick, with him, H. Lee Roussel and Terry R. Bossert, for petitioners, Nationwide Mutual Insurance Company and Nationwide Mutual Fire Insurance Company.

S. Walter Foulkrod, III, with him, R. James Reynolds, Jr., John Havas and Stephen L. Banko, Jr., Foulkrod, Reynolds & Havas, for petitioners, The Travelers Indemnity Company, The Charter Oak Fire Insurance Company, The Phoenix Insurance Company, The Travelers Indemnity Company of America, and Allstate Insurance Company and Allstate Indemnity Company.

Hannah Leavitt, Chief Counsel, with her, Arthur Selikoff and Regina Matz, Assistant Counsels, and Linda Wells, Chief of Litigation, Andrew H. Cline, Associate Deputy General Counsel, for respondent/plaintiff, Commonwealth of Pennsylvania, Insurance Department and Constance B. Foster, Acting Insurance Commissioner.

Zori G. Ferkin, Sutherland, Asbill & Brennan, for intervenor, Industrial Energy Consumers of Pennsylvania.

President Judge Crumlish, Jr. Opinion by President Judge Crumlish, Jr.

Author: Crumlish

[ 104 Pa. Commw. Page 304]

The Travelers Indemnity Company,*fn1 Allstate Insurance Company,*fn2 and Nationwide Mutual Insurance Company*fn3 have filed petitions for review and applications for special relief*fn4 and for stay and/or supersedeas*fn5 of Acting Insurance Commissioner Constance B. Foster's orders dated February 11, 1987, suspending and postponing their collective insurance premium rate increases. The Insurance Department (Department) has filed amended complaints in equity and applications for preliminary injunctions*fn6 seeking to enjoin Travelers and Allstate from violating those February 11, 1987 orders and directing them to refund any premiums which have been or may be collected in violation of those orders.

Following comprehensive review of the pleadings, briefs, exhibits and hearing thereon in each of these proceedings, this Chancellor finds that petitioners' actions are essentially appeals of administrative adjudications*fn7 and therefore we will at this time consider petitioners' applications for stay and/or supersedeas.

[ 104 Pa. Commw. Page 305]

In order for a petitioner to succeed in an application for stay pending appeal, one must (1) make a strong showing that he is likely to prevail on the merits, (2) demonstrate that without the requested relief, he will suffer irreparable injury, (3) demonstrate that other interested parties in the proceedings will not be substantially harmed if relief is granted, and (4) show that the public interest will not be adversely affected. Pennsylvania Public Utility Commission v. Process Gas Consumers Group, 502 Pa. 545, 467 A.2d 805 (1983).

With respect to the first prong of the Process Gas test, it is important to note that this matter involves only one issue. That narrow issue is whether petitioners' rate increases can be validly implemented pending the Acting Insurance Commissioner's resolution of the complaints challenging the rate increases. Hearings on those complaints are scheduled for March 3, 10 and 12, 1987. In this proceeding, it is not the function of the Chancellor to decide if the complaints are valid nor does the Chancellor have the authority to do so.

Pursuant to Section 17(a) of the Casualty and Surety Rate Regulatory Act,*fn8 Acting Insurance Commissioner Constance B. Foster entered orders suspending petitioners' automobile insurance rate increases. Section 17(a) provides:

Hearing procedure and judicial review

(a) Any insurer, rating organization or person aggrieved by any action of the Commissioner,

[ 104 Pa. Commw. Page 306]

    except disapproval of a filing or a part thereof as provided for in section five hereof, or by any rule or regulation adopted and promulgated by the Commissioner, shall have the right to file complaint with the Commissioner and to have a hearing thereon before the Commissioner. Pending such hearing and the decision thereon the Commissioner may suspend or postpone the effective date of his previous action, rule or regulation.

Petitioners contend that Acting Commissioner Foster erroneously invoked Section 17(a) as authority for her February 11, 1987 orders because it is Section 5(b) of the Rate Act*fn9 which exclusively controls a Commissioner's authority to enter orders on rate filings which are "in effect." Section 5(b) provides:

(b) Any person or organization aggrieved with respect to any filing which is in effect may make written application to the Commissioner for a hearing thereon: Provided, however, That the insurer or rating organization that made the filing shall not be authorized to proceed under this subsection. Such application shall specify the grounds to be relied upon by the applicant. If the Commissioner shall find that the application is made in good faith, that the applicant would be so aggrieved if his grounds are established, and that such grounds otherwise justify holding such a hearing, he shall, within thirty (30) days after receipt of such application, hold a hearing upon not less than ten (10) days written notice to the applicant and to every insurer and rating organization which made such filing.

[ 104 Pa. Commw. Page 307]

If, after such hearing, the Commissioner finds that the filing or a part thereof does not meet the requirements of this Act, he shall issue an order specifying in what respects he finds that such filing or a part thereof fails to meet the requirements of this Act, and stating when, within a reasonable period thereafter, such filing or a part thereof shall be deemed no longer effective. Copies of said orders shall be sent to the applicant and to every such insurer and rating organization. ...


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