Appeal from the Order of the Pennsylvania Insurance Commissioner in the case of In Re: John Hancock Property & Casualty Insurance Company -- John Hancock Indemnity Company, Pennsylvania Personal Auto Rate Revision, Docket No. R-87-12-16, dated March 31, 1988 and modifying Order dated April 11, 1988.
S. Walter Foulkrod, III, with him, Stephen L. Banko, Jr., Foulkrod, Reynolds & Havas, P.C., for petitioners.
Jean M. Callihan, Assistant Counsel, with her, Arthur Selikoff, Assistant Counsel, Theodie L. Peterson, III, Chief of Litigation, and Linda J. Wells, Chief Counsel, for respondent.
President Judge Crumlish, Jr., and Judges Craig, Doyle, Barry, Colins, Palladino and Smith. Opinion by Judge Barry.
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John Hancock Property & Casualty Insurance Company and John Hancock Indemnity Company (petitioners) appeal from an order of the Insurance Commissioner (Commissioner) which disapproved their rate filing for
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private passenger automobile coverage and required them to refund a portion of the rate increase they had collected on policies that were issued or renewed while the disapproved rates were in effect.
The filing was made on October 28, 1987 with a request for the proposed rates to become effective December 1, 1987. It was made under the provisions of the Casualty and Surety Rate Regulatory Act (Act), Act of June 11, 1947, P.L. 538, as amended, 40 P.S. §§ 1181-1197. The filing proposed an overall rate level increase of 15.4%. Three days after the expiration of the initial thirty days of the waiting period within which the filing was required to be on file before it became effective by operation of law, the Commissioner, by letter dated November 30, 1987, notified the petitioners that, pursuant to Section 4(d) of the Act, 40 P.S. § 1184(d), she was extending the waiting period by an additional thirty days.*fn1 Three days after the expiration of that additional thirty day period, Deputy Insurance Commissioner Michael Powers, by letter dated December 31, 1987, notified the petitioners that, pursuant to Section 5(a) of the Act, 40 P.S. § 1185(a), a hearing would be held on February 17, 1988 to review their rate filing. Petitioners subsequently notified the Commissioner that, beginning on January 22, 1988, they would begin charging the rates proposed in their filing, which had become effective by operation of law, and proceeded to do so.
Following the hearing on the petitioners' rate filing, the Commissioner issued an order which disapproved that filing effective April 15, 1988.*fn2 The Commissioner
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concluded that the proposed rates were excessive. By this same order, the Commissioner required the petitioners to return within thirty days of the date of the order "all excess premium collected." Petitioners applied to the Commissioner for a stay of that part of her order. That application was denied. In her order denying the application, however, the Commissioner now interpreted the portion of the order which petitioners sought to stay to require the petitioners to return only "the premium difference between its rates deemed into effect January 22, 1988 and its previously approved rates for all premiums earned after April 15, 1988, the effective date of the disapproval of the deemed rate." This appeal followed.*fn3
In this appeal, petitioners had raised a series of issues relating to that part of the Commissioner's order which disapproved their October ...