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MARYLAND INSURANCE ADMINISTRATION MARYLAND

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					                    MARYLAND INSURANCE ADMINISTRATION

MARYLAND INSURANCE                          *         REVIEW OF A RECOMMENDED

ADMINISTRATION                              *         DECISION ISSUED BY

EXREL U.G.                                  *         DEBORAH H. BUIE

             Complainant                    *         AN ADMINISTRATIVE LAW JUDGE

      v.                                    *         OF THE MARYLAND OFFICE OF

GEICO GENERAL                               *         ADMINISTRATIVE HEARINGS

INSURANCE COMPANY                           *




             Licensee                       *



                                            *         OAH No.: MIA-CC-33-11-46730

                                            *         MIAN0.: MIA-2011-11-015

                                            *




*     *      *     *       *     *     .*             *    *       *     *      *




                                     FINAL ORDER

      Pursuant to Md. Code Ann., Ins.           § 2-210(d) and COMAR 31.02.01.10-2H, the
undersigned Maryland       Insurance Commissioner,             hereby issues this summary

affirmance of the proposed decision below.

      On February 9, 2012, this case was heard by Administrative Law Judge (“AU”)

Buie. On March 5, 2012, the AU issued a Proposed Decision, and on the same date the

Office of Administrative Hearings mailed the Proposed Decision to the Complainant and

to Debra Decker, underwriter for the Licensee. Attached to the Proposed Decision was

the notice regarding the Right to File Exceptions advising all parties that pursuant to

                                                —1—
COMAR 31 .02.01.10-1, they had the right to file written exceptions with the undersigned,

within twenty (20) days from receipt ofthe Proposed Decision.

       No Exceptions were filed by the parties.

       I have carefully evaluated the documentary record in this case and the Proposed

Decision byAUJ Buie. In consideration thereof, and pursuantto COMAR 31.02.01.10-2D,

I am persuaded that the result reached by the AU           is correct. This Proposed Decision

which is summarily affirmed under COMAR 31.02.01.10-2H is not precedent within the

rule of stare decisis in other cases.

       THEREFORE, it is hereby

       ORDERED that the Proposed Decision of AU                   Buie be adopted as the

Commissioner’s Final Order, and it is further

       ORDERED that the complaint made by the Complainant be DENIED AND

DISMISSED; and it is further

       ORDERED that the records and publications of the                  Maryland Insurance

Administration reflect this decision.
                                         (c~
       It is so ORDERED this       Jday         of April, 2012.

                                        THERESE M. GOLDSMITH
                                        Commissioner
                                  Signature on original




                                                      uty Commissioner




                                               -2-
MARYLAND INSURANCE                                    *   BEFORE DEBORAH H. BUIE,

ADMINISTRATION, EX. REL:                              *   AN ADMINISTRATIVE LAW JUDGE

                        ,                             *    OF TIlE MARYLAND OFFICE

           COMPLAINANT                                *    OF ADMINISTRATIVE HEARINGS

           v.                                         *    OAH No.: MIA-CC-33-11-46730

GEICO GENERAL INSURANCE                               *   MIA No.: 2011-11-015

COMPANY,                                              *



           LICENSEE

*      *        *   *                *       *                 *     *     *     *     *     *



                                          PROPOSED DECISION’

                                         STATEMENT OF THE CASE
                                                ISSUE
                                      SUMMARY OF THE EVIDENCE
                                          FINDINGS OF FACT
                                             DISCUSSION
                                        CONCLUSIONS OF LAW
                                          PROPOSED ORDER

                                         STATEMENT OF THE CASE

           On June 8, 2011, the Maryland Insurance Administration (MIA) received a complaint

from                        (Complainant) alleging that GEICO General Insurance Company (Licensee)

had en-ed when it increased the premium on his automobile policy.

           After an investigation, the MIA found that the Licensee’s action increasing the

Complainant’s premium did not violate the Maryland Insurance Law. It mailed notice of its




 Under the relevant statute and regulations, the Insurance Commissioner may, on a case-by-case basis, delegateto
the Office of Administrative Hearings (OAH) the authority to issue: (a) proposed or final findings of fact; (b)
proposed or final conclusions of law; (c) proposed or final findings of fact and conclusions of law; or (d) a proposed
or final order. Md. Code Ann., State Govt § 10-205 (2009); Code of Maryland Regulations (COMAR) 3 1.02.01.04-
1(A)(2). Here, the Commissioner has delegated to OAR the authority to issue a proposed order.
decision to the Complainant on September 15, 2011. The Complainant disagreed with the MIA’s

decision and requested a hearing on or about September 29, 2011.

       On November 21, 2011, the MIA referred the matter to the OAH for a hearing. Md.

Code Ann., Ins.   §   2-210 (2011). The M[A transmitted the case to the OAR, with a delegation of

authority for a proposed order.

       On February 9, 2012, I conducted a hearing at the OAR in Hunt Valley, Maryland. Md.

Code Ann., Ins.   §~
                   2-210 and 2-213 (2011); Code of Maryland Regulations (COMAR) 31.02.01

and 3 1.15.07. The Complainant represented himself. Debra Decker, Licensee’s underwriter,

represented the Licensee.

       The contested case provisions of the Administrative Procedure Act, the Rules of

Procedure of the OAH and the procedural regulations for MIA hearings govern procedures in

this case. Md. Code Ann., State Gov’t §~10-201 through 10-226 (2009 & Supp. 2011),

COMAR 28.02.01 and COMAR 3 1.02.01.

                                               ISSUE

       Did the Licensee’s actions related to premiums for the Complainant’s automobile policy

violate Maryland Insurance Law?

                                  SUMMARY OF THE EVIDENCE

Exhibits

       I incorporated the entire MIA file, consisting of eleven exhibits, into the record. The

Complainant submitted seven exhibits; I admitted six ofthem into evidence. The Licensee

submitted one exhibit, which was admitted into evidence. (I have attached a complete Exhibit

List as an Appendix).




                                                  2
Testimony

        The Complainant testified in his own behalf and presented telephone testimony from his

wife,                . Debra Decker testified for the Licensee.

                                        FINDINGS OF FACT

        I find the following facts by a preponderance of the evidence:

    1. The Complainant is insured under an automobile policy issued by the Licensee. The

        policy number is                . He was originally insured by the Licensee in 2007 under

        a policy in Indiana; however, on March 18, 2009, the Complainant’s policy was re-rated

        to Maryland at the same tier.

   2. On January 14, 2008, the Complainant filed a road service claim with the Licensee. On

        December 17, 2008, the Complainant’s wife had an at-fault accident for which the

        Licensee paid $2,101.21 in property damage.

    3. The Complainant’s renewal period begins every year on or about March       18
                                                                                    th,   the date the

        policy was initiated in Maryland; therefore, in mid- March 2011, the Complainant’s

        policy was up for renewaL

    4. The Licensee has an established rating plan on file with the MIA that applies to all of its

        policyholders. Under the rating plan, a “good driver plan” discount is lost and one point

        is assigned for each accident caused by an insured driver that takes place during the

        preceding thirty-six months and requires the Licensee to pay over $750.00 in property

        andlor collision coverage, with the result that a higher premium is charged for the policy

        coverage.




                                                   3
5. As of January 5, 2010, a new rating tier, “F”, became effective within the Licensee’s

   filings for existing customers scheduled forrenewal. The Complainant was not eligible

   for this “F” tier rating in March 2010 because of the claims history in 2008.

6. Between January 2010 and February 2011, the Complainant called on numerous

   occasions, inquiring about any available reduced premiums for which he might be

   eligible. The Complainant was informed that available premium changes are made at the

   time of renewal.

7. The Licensee did not clearly explain to the Complainant about how his claims history

   impacted his ineligibility for a lower premium and so the Complainant continued to

   periodically inquire about obtaining a lower premium.

8. On February 13, 2011, the Complainant inquired online about rates representing himself

    as a new customer. He was quoted a rate lower than his current premium.

9. The Licensee’s filing plan permits it to disregard roadside assistance claims within the

    three-year experience period for rating of new customers.

10. The Complainant believed he, as an existing customer, was unfairly being charged a

    higher premium then a new customer. As a result, he initiated this complaint with the

    MIA.

 11. After continued calls from the Complainant, and in an effort to keep him as a customer,

    the Licensee agreed to make an exception and place the Complainant in the lower tier

    rating, that is, “F tier”, effective the renewal date of March 19, 2011. Complainant

    wanted the F tier rating to be backdated to months earlier, insisting that he had been

    calling the Licensee for a year seeking a lower rate.




                                             4
                                           DISCUSSION

       The burden of proofin this case is a preponderance of the evidence, Md. Code Ann.,

State Gov’t   §   10-217 (2009) and rests with the Complainant as the moving party. Commissioner

of Labor and Industry v. Bethlehem Steel Corp., 344 Md. 17, 34 (1996).

       When the MIA referred this case to the OAR, it directed the Administrative Law Judge

conducting the hearing to take specific attention to the following sections of the Maryland

Insurance Article: Md. Code Ann., Ins.    §~
                                           11-230, 11-341, and 27-216 (2011).      Before

analyzing each statute, it is important to examine exactly what the Complainant is protesting. He

is not contesting the increase of his premium in 2009 due to his wife’s December 17, 2008 at-

fault accident. He also does not dispute that, if the 2008 claim were not to be considered, he

would be eligible for a lower premium. Further, he does not suggest that the Licensee was

charging him a premium associated with a tier other than in which he was placed. He also does

not take the position that the Licensee’s action is not in accordance with its filings with the MIA.

       The Complainant’s point of contention is two-fold: a.) that the Licensee is discriminating

against existing customers when it offers new customers a lower introductory rate; and b.) during

his many conversations with the Licensee’s agents, he should have been given specific

information about when he was eligible for a reduced premium, and why. As a remedy, the

Complainant is seeking a retroactive reduction in his premium dated back to sometime in 2010,

months during which he called the Licensee numerous times requesting consideration for a lower

premium.

       The Licensee responded that its rates are in compliance with its rating plan and its rating

plan allows it to disregard roadside service claims in reviewing the three-year claims history of

new customers. Moreover, the Licensee’s position is that there is no evidence that establishes that




                                                  5
the premiums were miscalculated or otherwise not in accordance with the approved rating plan.

The Licensee viewed the complaint as one arising out ofthe Complainant’s dissatisfaction with the

Licensee’s customer service, which it asserted is not the standardby which a consumer complaint

shall be upheld.

        Section 11-230 provides that an insurance producer may not issue an insurance policy,

except in accordance with the filings that are in effect for the insurer. In other words, once an

insurer has filed its rating plan, it cannot issue any insurance policy that does not comply with

the rating plan. Section 11-341 provides essentially the same thing and states that an insurer may

not make or issue an insurance contract or policy of insurance ofa kind to which this subtitle

applies, except in accordance with the filings that are in effect for the insurer.

        Section 27-216 provides that an insurer may not willfully collect a premium or charge for

insurance that exceeds or is less than the premium or charge applicable to that insurance under

the applicable classifications and rates as filed with and approved by the MIA.

        The law is clear. The Licensee’s charges for insurance must be in compliance with its

rating plan that is on file with the MIA. In the instant case, the Complainant did not suggest that

the Licensee violated any filings with the IVIIA; he offered no evidence to that effect.

        The Licensee offered credible testimony from Ms. Decker that the MIA had authorized

its rate filing and that filing permits it to not consider roadside claims when looking back at a

new customer’s claims history. In addition, Ms. Decker maintained that the law specifically

prohibits the Licensee from disregarding the Complainant’s claim history; that is, given the

history, the Licensee must place the Complainant in tier L and bill him accordingly. Moreover,

the Licensee argued that it is not the Licensee’s legal responsibility to contact an insured to

determine if the insured wants to reduce his coverage. Ms. Decker noted that the premiums charged



                                                   6
were in accordance with the approved rating plan and underwriting guidelines and consistent with

sections 11-230, 11-341 and 27-216 ofthe Insurance Article.

        Notwithstanding the Licensee’s position as stated above, Ms. Decker explained that as the

communication between the Complainant and the Licensee intensified because the Complainant had

obtained the online quote for a new customer, the Licensee made a business exception in an effort to

keep the Complainant as a customer, and agreed to offer him the lower tier F premium effective his

next renewal date, March 2011. This concession by the Licensee, however, did not change the fact

that the Complainant’s claims history exempted him from that tier classification; therefore, he

would not be entitled to any retroactive reduction of his premium.

        After consideration of the evidence, I find that the Complainant has not established that

the Licensee charged the Complainant premiums that did not comply with the rating plan or that

he is entitled to a refund ofpremiums paid. In delegating the authority to the OAR to conduct a

hearing, with the scope limited to sections 11-230, 11-341 and 27-216 of the Maryland Insurance

Article, I am limited to the issues of prohibited policies and contracts and improper premiums

and charges as defined within those statutes. Not only has the Complainant not established a

violation ofthose statutes, he has not cited any other regulation or section of Maryland Insurance

Law that would entitle him to a retroactive reduced premium. The Complainant’s claim of

unfairness is not a sufficient basis upon which to establish a right to have a refund of past

premiums.

        Accordingly, the Complainant’s evidence failed to establish that the Licensee did not

comply with its rating plan or did not comply with Maryland Insurance Law.




                                                  7
                                        CONCLUSIONS OF LAW

          I conclude as a matter of law that the Complainant failed to show that the Licensee

violated Maryland Insurance Law when it calculated the premiums of the Complainant’s

automobile insurance. Md. Code Ann., Ins.      §~
                                                11-230, 11-341, and 27-216 (2011).

                                        PROPOSED ORDER

          Upon the foregoing Findings of Fact, Discussion, and Conclusions ofLaw, I propose that

the Licensee not be found in violation of sections 11-230, 11-341 and 27-216 of the Maryland

Insurance Article and that the charges made by the Complainant be DISMISSED.

          I further propose that the records and publications of the Maryland Insurance

Administration reflect this decision.



March 5, 2012                                          f~2a~L4~/~
                                                              ~
Date Decision Mailed                                   Deborah H. Buie
                                                       Administrative Law Judge

DHB/lh
#130385




                                 RIGHT TO FILE EXCEPTIONS

        Upon receipt of this recommended decision, affected parties have twenty (20) days to file
exceptions with the Insurance Commissioner. COMAR 31.02.01.10-1B(1). If they wish to have
a transcript ofthe hearing before filing exceptions, they have ten (10) days to file with the
Insurance Commissioner a copy oftheir written request to a private stenographer for preparation
of a transcript. COMAR 31.02.01.10-1B(2). If a transcript is requested, the transcript must be
filed with the Commissioner within sixty (60) days of the request, and then the parties have thirty
(30) days after the filing ofthe transcript to file exceptions with the Commissioner. COMAR
31.02.01.10-iD. Written exceptions and copies of requests for transcripts should be addressed to
the Insurance Commissioner, Maryland Insurance Administration, 200 St. Paul Place, Suite
2700, Baltimore, MD 21202. The Office of Administrative Hearings is not a party to any review
process.




                                                   8
MARYLAND INSURANCE                       *   BEFORE DEBORAH H. BUTE,

ADMINISTRATION, EX. REL:                 *   AN ADMINISTRATIVE LAW JUDGE

                                             OF THE MARYLAND OFFICE

         COMPLAINANT                     *   OF ADMINISTRATIVE HEARINGS

         V.                              *   OAH No.: MIA-CC-33-11-46730

GEICO GENERAL INSURANCE                  *   MIA No.: 2011-11-015

COMPANY,                                 *



         LICENSEE
*    *         *    *   *    *          *         *   *   *   *     *   *



                                 FILE EXHIBIT LIST


MIAEx. 1-           Online Complaint from the Complainant, June 8, 2011
MIAEx. 2-           Letter from the Complainant, June 9, 2011
MIAEx. 3-           Letter to Licensee from MIA, June 10, 2011
MIAEx. 4-           Letter from Licensee to MIA, June 20, 2011, with attachments
MIAEx. 5-           Letter from MIA to Licensee, June 21, 2011
MIAEx. 6-           Letter from Licensee to MIA, June 27, 2011, with attachments
MIAEx. 7-           Letter from Complainant to MIA, July ii, 2011
MIAEx. 8-           E-mail correspondence to Complainant from MIA, July 12, 2011
MIAEx. 9-           Letter from MIA to the Complainant, September 15, 2011, with
                    attachments
MIAEx. 10-          Letter from Complainant to MJIA, September 25, 2011
MIAEx. 11-          Letter from MIA to Complainant and Licensee, September 30, 2011

Compl. Ex. 1        E-mails from Complainant to Licensee, December 7, 2011
Compi. Ex. 2        Complainant’s phone records, January 2010 and January 2011
Compi. Ex. 3        Letter from MIA to Complainant, October 21, 2011
Compi. Ex. 4        E-mail from Licensee to Complainant, July 15, 2010
Compi. Ex. 5        Online rate quote, February 13, 2011
Compi. Ex. 6        Not Admitted
Compl.Ex.7          Letter from Complainant to Licensee, February 21, 2011


Lic. Ex. 1          GEICO Private PassengerRules, July 8, 2010




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