NORTH CAROLINA AUTOMOBILE RATE ADMINISTRATIVE OFFICE, Nationwide Mutual Insurance Company, Allstate Insurance Company, Travelers Indemnity Company, the Aetna Casualty and Surety Company, United States Fire Insurance Company, United States Fidelity and Guaranty Company, Lumbermens Mutual Casualty Company, Saint Paul Fire and Marine Insurance Company, Shelby Mutual Insurance Company, and American Motorists Insurance Company, Petitioners,
v.
John Randolph INGRAM, Commissioner of Insurance for the State of North Carolina, Respondent.
No. 7710SC73.
Court of Appeals of North Carolina.
March 21, 1978.*208 Allen, Steed & Allen by Thomas W. Steed, Jr., Broughton, Broughton & Boxley by Melville Broughton, Jr., Sanford, Cannon, Adams & McCullough by Charles C. Meeker, Raleigh, for petitioners-appellees.
*209 Atty. Gen. Rufus L. Edmisten by Isham B. Hudson, Jr., Asst. Atty. Gen., Raleigh, for respondent-appellant.
PARKER, Judge.
The initial question presented by this appeal is whether the Superior Court had subject matter jurisdiction of the petition for review under G.S. 58-9.3. We hold that it did. As pertinent to that question, G.S. 58-9.3(a) and G.S. 58-9.4 provide:
G.S. 58-9.3. Court review of orders and decisions.(a) Any order or decision made, issued or executed by the Commissioner, except an order to make good an impairment of capital or surplus or a deficiency in the amount of admitted assets and except an order or decision that the premium rates charged or filed on all or any class of risks are excessive, inadequate, unreasonable, unfairly discriminatory or are otherwise not in the public interest or that a classification assignment is unwarranted, unreasonable, improper, unfairly discriminatory, or not in the public interest, shall be subject to review in the Superior Court of Wake County on petition by any person aggrieved filed within 30 days from the date of the delivery of a copy of the order or decision made by the Commissioner upon such person.
G.S. 58-9.4. Court review of rates and classification.Any order or decision of the Commissioner that the premium rates charged or filed on all or any class of risks are excessive, inadequate, unreasonable, unfairly discriminatory or are otherwise not in the public interest or that a classification or classification assignment is unwarranted, unreasonable, improper, unfairly discriminatory or not in the public interest may be appealed to the North Carolina Court of Appeals by any party aggrieved thereby.
Appellant Commissioner contends that the decision which petitioners sought to have reviewed in this case was one in which he found the premium rates charged for automobile medical payments insurance to be excessive and that therefore the Superior Court had no jurisdiction under G.S. 58-9.3(a) to review his decision, review of such an order being only by direct appeal to the Court of Appeals under G.S. 58-9.4. The fallacy in this contention lies in its major premise. Petitioners have never sought review of the portion of the Commissioner's order finding the rates excessive. Indeed, it was the petitioner Rate Office, not the Commissioner, which initiated the proceeding for the reduction in rates with its filing of 1 July 1971 proposing a rate level decrease of 12.3%. When, more than two and a half years later, the Commissioner approved the 12.3% decrease by his order issued 18 January 1974, it was the petitioner Rate Office which called his attention to the fact that, because of revisions which had occurred since the original filing in the private passenger automobile bodily injury liability rates to which the medical payments insurance rates were to some extent related, the rate level decrease in the medical payments insurance rates should be 16.4% rather than 12.3%. The Commissioner then issued an addendum to his 18 January 1974 order to approve the 16.4% decrease. The petitioners have never excepted to or in any manner sought to question the portion of the Commissioner's decision and order finding the premium rates excessive and approving the 16.4% decrease. Their only challenge has been to the portion of his order in which, without notice or hearing, he abruptly directed that petitioners could not follow in this case the standard rule of application for placing into effect changes, whether increases or decreases, in insurance premium rates. That decision by the Commissioner is not such a decision as is described in G.S. 58-9.4, nor does it fall within any of the categories excepted from review by petition to the Superior Court in Wake County under G.S. 58-9.3(a). The argument in appellant's brief that the Commissioner's decision changing the rule of application should be "interpreted to mean that rates were excessive with respect to any and all policies bearing an effective date of February 1, 1974 or thereafter" is singularly unpersuasive in view of the Commissioner's long and *210 unexplained delay in taking any action on the pending filing requesting approval of a decrease in rates. We hold that the Superior Court properly exercised subject matter jurisdiction under G.S. 58-9.3(a) in this case.
Appellant next contends that, even if the Superior Court had subject matter jurisdiction under G.S. 58-9.3 of the matters presented in the petition for review in this case, that statute did not give the Superior Court power "to modify the Commissioner's decisions by affirming in part and reversing in part." G.S. 58-9.3(c) provides that "[t]he trial judge shall have jurisdiction to affirm or to set aside the order or decision of the Commissioner and to restrain the enforcement thereof." In this case the trial court did set aside and restrain the enforcement of the only order or decision of the Commissioner which was brought before it for review, being the order or decision of the Commissioner that the petitioners could not in this case follow the standard rule of application for placing rate changes into effect. The order or decision would not have been reviewable by direct appeal to this Court under G.S. 58-9.4. See Com'r of Insurance v. Insurance Co., 28 N.C.App. 7, 220 S.E.2d 409 (1975). The Commissioner could not insulate it from any judicial review simply by including it in an order approving a change in rates, as to which the Superior Court would have lacked subject matter jurisdiction. We hold that the Superior Court acted within the scope of its powers as granted to it by G.S. 58-9.3.
The question remains whether the Superior Court was correct in setting aside and restraining enforcement of the Commissioner's decision in which he attempted to change the standard rule of application in this case. We hold that it was and accordingly affirm.
The judgment of the Superior Court contains the following among the conclusions of law:
There is no evidence in the record and, in fact, it is conceded by counsel for all parties, that the Commissioner's Order of January 29, 1974, was entered without notice or hearing or any supporting evidence whatsoever. The issuance of an order by the Commissioner changing or preventing application of the rule maintained by the Rate Office for the implementation of changes in automobile insurance rates without notice, hearing or any supporting evidence, is in excess of his statutory authority under Chapter 58 of the General Statutes and is unlawful.
The appellant filed an exception to this conclusion "except that part thereof which finds or concludes that the Commissioner afforded the petitioners no notice and hearing prior to the entry of the orders complained of." Appellant made this exception the basis of an assignment of error. However, appellant did not present or discuss this assignment of error or the exception on which it is based in his brief, and any question intended to be raised thereby is deemed abandoned. Rule 28(a), N.C.Rules of Appellate Procedure. In any event, the record before us fully supports the finding that the Commissioner's order in which he sought to prevent in this case the application of the long standing rule of the Rate Office for implementing changes in insurance premium rates was entered without prior notice, without hearing, and without supporting evidence. In so doing the Commissioner acted arbitrarily and in excess of his statutory authority. It should be noted that had the rate change been an increase rather than a decrease, the method of implementing the change which the Commissioner sought to impose in this case as compared with the standard rule of application adopted and maintained by the Rate Office would have worked to the detriment of policyholders to whom policies had been issued prior to 1 February 1974 to become effective on or after that date. The rate change here involved was a decrease rather than an increase, but even so, evidence submitted by the petitioners at the hearing in the Superior Court held prior to issuance of the preliminary injunction reveals that the benefits to individual policyholders which would result from application of the Commissioner's decision as compared with the *211 results from application of the standard rule would be minimal, while the cost to the petitioner insurance companies would be very substantial indeed, the total cost to the companies exceeding the total benefits to all affected policyholders by a wide margin. The Commissioner acted without receiving any evidence on these matters. Adoption of the rule which he sought to impose in the face of such evidence would have been arbitrary and capricious. It was all the more so because he acted without affording any interested party the opportunity to present such evidence.
Since we hold that the Commissioner in this case exceeded his statutory authority, we need not consider and do not pass upon the question, discussed in the briefs of the parties, of whether in addition he also violated constitutional rights of the appellees. For the reasons above noted the judgment of the Superior Court here appealed from is
Affirmed.
BRITT and VAUGHN, JJ., concur.