Erie Insurance Property & Vincent J. King , 236 W. Va. 323 ( 2015 )


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  •           IN THE SUPREME COURT OF APPEALS OF WEST VIRGINIA
    September 2015 Term
    FILED
    November 9, 2015
    released at 3:00 p.m.
    RORY L. PERRY II, CLERK
    No. 14-1059                SUPREME COURT OF APPEALS
    OF WEST VIRGINIA
    ERIE INSURANCE PROPERTY & CASUALTY COMPANY
    AND WEST VIRGINIA INSURANCE COMMISSIONER,
    Respondents Below, Petitioners
    v.
    VINCENT J. KING,
    Petitioner Below, Respondent
    Appeal from the Circuit Court of Kanawha County
    The Honorable John L. Cummings, Senior Status Judge
    Civil Action No. 13-AA-95
    REVERSED AND REMANDED
    Submitted: October 14, 2015
    Filed: November 9, 2015
    Jill Cranston Rice, Esq.
    Andrew T. Kirkner, Esq.
    Dinsmore & Shohl LLP
    Morgantown, West Virginia
    and
    James D. Lamp, Esq.
    Matthew J. Perrry, Esq.
    Lamp Bartram Levy Trautwein & Perry, PLLC
    Huntington, West Virginia
    Attorneys for Erie Insurance Property & Casualty Company
    Andrew R. Pauley, Esq.
    WV Offices of the Insurance Commissioner
    Charleston, West Virginia
    Attorney for Insurance Commissioner of West Virginia
    Vincent J. King, Esq.
    Cross Lanes, West Virginia
    Pro Se
    Jeffrey M. Wakefield, Esq.
    Keith R. Hoover, Esq.
    Flaherty Sensabaugh Bonasso PLLC
    Charleston, West Virginia
    Attorneys for Amicus Curiae, West Virginia Insurance Federation
    Amy M. Smith, Esq.
    Steptoe & Johnson PLLC
    Bridgeport, West Virginia
    and
    Laurie C. Barbe, Esq.
    Steptoe & Johnson PLLC
    Morgantown, West Virginia
    Attorneys for Amici Curiae, American Insurance Association
    and Property Casualty Insurance Association of America
    JUSTICE LOUGHRY delivered the Opinion of the Court.
    SYLLABUS BY THE COURT
    1.     “On appeal of an administrative order from a circuit court, this Court
    is bound by the statutory standards contained in W.Va. Code § 29A-5-4(a) and reviews
    questions of law presented de novo; findings of fact by the administrative officer are
    accorded deference unless the reviewing court believes the findings to be clearly wrong.”
    Syl. Pt. 1, Muscatell v. Cline, 
    196 W.Va. 588
    , 
    474 S.E.2d 518
     (1996).
    2.     “In cases where the circuit court has amended the result before the
    administrative agency, this Court reviews the final order of the circuit court and the ultimate
    disposition by it of an administrative law case under an abuse of discretion standard and
    reviews questions of law de novo.” Syl. Pt. 2, Muscatell v. Cline, 
    196 W.Va. 588
    , 
    474 S.E.2d 518
     (1996).
    3.     “Any challenge to an approved insurance rate by an aggrieved person
    or organization should be raised pursuant to the provisions of West Virginia Code §
    33-20-5(d) (1967) (Repl.Vol.2006) in a proceeding before the Insurance Commissioner.”
    Syl. Pt. 3, State ex rel. CitiFinancial, Inc. v. Madden, 
    223 W.Va. 229
    , 
    672 S.E.2d 365
     (2008).
    i
    4.     “In providing for a cause of action that permits the recovery of excess
    charges included in a consumer credit transaction pursuant to the provisions of West Virginia
    Code § 46A-3-109 (1998) (Repl.Vol.2006) and § 46A-5-101 (1996) (Repl.Vol.2006), the
    Legislature did not authorize the circuit courts to invade the jurisdiction of the Insurance
    Commissioner and conduct a reexamination of insurance rates previously approved by the
    Commissioner.” Syl. Pt. 2, State ex rel. CitiFinancial, Inc. v. Madden, 
    223 W.Va. 229
    , 
    672 S.E.2d 365
     (2008).
    5.     “By design, insurance rate setting involves the prospective use of
    proposed rates which are calculated based on cost projections derived from past experience
    combined with a reasonable expectation of future losses and expenses.” Syl. Pt. 5, W.Va.
    Emp’rs’ Mut. Ins. Co. v. Bunch Co., 
    231 W.Va. 321
    , 
    745 S.E.2d 212
     (2013).
    6.     “‘The “clearly wrong” and the “arbitrary and capricious” standards of
    review are deferential ones which presume an agency’s actions are valid as long as the
    decision is supported by substantial evidence or by a rational basis.’ Syllabus Point 3, In re
    Queen, 
    196 W.Va. 442
    , 
    473 S.E.2d 483
     (1996).” Syl. Pt. 5, Dale v. Oakland, 
    234 W.Va. 106
    , 
    763 S.E.2d 434
     (2014).
    ii
    LOUGHRY, Justice:
    The petitioners, Erie Insurance Property and Casualty Company and the West
    Virginia Insurance Commissioner (“Erie” and “Commissioner” individually or “petitioners”
    collectively), appeal a September 12, 2014, order of the Circuit Court of Kanawha County.
    By that order, the circuit court reversed a July 10, 2013, administrative decision of the
    Commissioner and overruled the Commissioner’s prior approval of a rate, form, and product
    filing submitted by Erie.    In this appeal, the petitioners contend that the circuit court
    misapplied the law by failing to afford deference to the Commissioner’s approval authority
    with respect to insurance rates and forms, made erroneous findings of fact, and improperly
    substituted its judgment for that of the Commissioner. Upon consideration of the parties’
    briefs and arguments,1 the submitted record, and pertinent authorities, we find the circuit
    court erred in reversing the decision of the Commissioner. Accordingly, for the reasons set
    forth below, the circuit court’s order is reversed, and this case is remanded for entry of an
    order reinstating the Commissioner’s decision.
    1
    At this juncture, the Court wishes to acknowledge and express appreciation for the
    contributions of amici curiae, West Virginia Insurance Federation, American Insurance
    Association, and Property Casualty Insurance Association of America, who filed briefs in
    support of the petitioners.
    1
    I. Factual and Procedural Background
    In early February 2010, Erie made a 398-page filing with the Commissioner
    seeking approval for a new product endorsement entitled “Rate Protection Endorsement”
    (“RPE”).2 Erie indicated that the RPE would provide a guarantee that a policy owner’s rate
    would not change once obtained, if three conditions remained static: the car(s), the driver(s),
    and the garaging address. In other words, the premium would remain the same even if there
    were other occurrences that would normally trigger a rate increase. Erie stated that the
    endorsement could be discontinued at any time and was optional.3 The price of the
    endorsement varied by coverage based upon an RPE scoring algorithm. The proposed
    effective date was June 1, 2010. Upon receipt of the filing, the Commissioner undertook an
    investigation and review that resulted in several amendments to the filing by Erie.
    2
    According to Erie, the filing included “letters of explanation, WV PPA Proposed
    Manual Rate Pages, WV Proposed Manual Rate Pages, Declarations Page, Filing
    Memorandum, Draft of Marketing Brochure, Draft of Agent Marketing Aid, Important
    Notice, and WV Filing Fee Form.”
    3
    The filing included a proposed notice that Erie planned to use to explain the RPE to
    consumers of the policy and buyers of the endorsement. The notice read, in pertinent part,
    as follows:
    The Rate Protection Endorsement is designed to smooth out
    rates over time, and it may initially result in an increase or
    decrease in your total premium depending on a number of
    factors. The endorsement gives you a level of predictability and
    control over your auto insurance premium . . . You may contact
    your insurance agent at any given time to remove the
    endorsement and receive the current non-smoothed rate.
    2
    Ultimately, the Commissioner approved the Erie filing, as amended, on April 15, 2010, with
    an effective date of July 1, 2010.
    In the spring of 2012, the respondent, Vincent J. King (“Mr. King”), traded his
    2009 Chevrolet Malibu for a 2012 model. Before doing so, Mr. King, an Erie insured,
    contacted his Erie insurance agent at the Garlow Insurance Agency to determine the impact
    the trade would have on his insurance premium. At that time, Mr. King was advised that the
    trade would result in less than a $3.00 annual increase. After making the trade, Mr. King
    notified his agent to substitute vehicles under his Erie policy, stating that he wanted the same
    coverage on his new car. Thereafter, Mr. King, who was unaware that Erie had obtained
    approval for its RPE, received his new policy which reflected a different premium that was
    actually less than the amount he had been quoted when he inquired about the premium prior
    to making his trade. Mr. King observed that while his total premium had decreased, the
    liability premium had increased by forty percent. Mr. King contacted his insurance agent and
    asked for a detailed explanation. According to Mr. King, he was told that the difference in
    premium was the result of “rate protection.” Upon further inquiry, Mr. King received a letter
    from Erie, dated November 16, 2012, stating, in pertinent part:
    The change in premium between the policy renewal on
    February 2, 2012 and the amendment effective April 26, 2012
    was due to the replacement of the 2009 vehicle with a 2012
    vehicle and the addition of the Rate Protection Endorsement.
    Prior to this time, your policy did not include the Rate Protection
    Endorsement. With the advent of this Endorsement, which
    3
    allows Customers to lock their premium until they make a
    qualifying change, ERIE introduced a different rating plan with
    a higher degree of pricing sophistication than exists in our
    traditional rating plan.
    The Garlow Agency confirmed that its standard business
    practice at the time of a qualifying change, such as the
    replacement of a vehicle, is to offer the Customer the option of
    adding the Rate Protection Endorsement, which you elected to
    do. ERIE’s private passenger auto rates in West Virginia did
    not change during this time period, so the premium change you
    experienced resulted from the change in vehicles and the
    addition of the Rate Protection Endorsement.
    If the replacement of the existing vehicle with the newer
    vehicle had been the only change, then the premium changes for
    the individual coverages would have coincided with your
    expectations. Adding the Rate Protection Endorsement
    provided you with an additional policy feature, while at the same
    time reducing the overall premium. Because the rating plan
    associated with the Endorsement differs from ERIE’s traditional
    rating plan, the price of a policy endorsed with Rate Protection
    may be higher, or lower, than it would be without the
    Endorsement. In your case, the resulting changes by coverage
    were an increase to the liability premium and a decrease in the
    physical damages premiums, for an overall premium decrease.
    Mr. King was certain that he had not been offered the RPE and had not
    consented to the addition of the RPE to his policy despite Erie’s assertion to the contrary.
    Unsatisfied with Erie’s responses to his inquiries, Mr. King sent a letter to Erie on December
    5, 2012, requesting a hearing pursuant to West Virginia Code § 33-20-9 (2011).4 Responding
    4
    West Virginia Code § 33-20-9 provides:
    4
    to Mr. King’s request, Erie made Cody Cook, the Vice President and Product Manager of its
    Personal Lines Division, available for questioning by Mr. King on February 1, 2013. Erie
    also provided approximately 400 pages of publicly-accessible documents related to Erie’s
    RPE rate filing for Mr. King to review. According to Mr. King, after eliciting testimony
    from Mr. Cook, he sought to question Phil Garlow, his insurance agent, but Erie stopped the
    hearing because Mr. Garlow requested time to obtain counsel. While Mr. King believed the
    hearing was going to continue at a later date, Erie instead filed a Petition for Declaratory
    Ruling with the Commissioner, seeking a declaratory ruling as to the scope and applicability
    of the provisions of West Virginia Code § 33-20-9. In response, Mr. King filed an
    (a) Every rating organization and every insurer which
    makes its own rates shall, within a reasonable time after
    receiving written request therefor and upon payment of such
    reasonable charge as it may make, furnish to any insured
    affected by a rate made by it, or to the authorized representative
    of such insured, all pertinent information as to such rate.
    (b) Every rating organization and every insurer which
    makes its own rates shall provide within this State reasonable
    means whereby any person aggrieved by the application of its
    rating system may be heard in person or by his authorized
    representative, on his written request to review the manner in
    which such rating system has been applied in connection with
    the insurance afforded him. If the rating organization or insurer
    fails to grant or reject such request within thirty days after it is
    made, the applicant may proceed in the same manner as if his
    application had been rejected. Any party affected by the action
    of such rating organization or such insurer on such request may,
    within thirty days after written notice of such action, appeal to
    the commissioner, who, after notice and hearing, may affirm or
    reverse such action.
    5
    administrative complaint against Erie titled “Petition for Hearing and Issuance of Subpoenas”
    pursuant to West Virginia Code §§ 33-20-5(d) (2011),5 33-2-13 (2011)6 and 33-2-4 (2011),7
    seeking a hearing before the Commissioner to determine “whether Erie accurately
    5
    West Virginia Code § 33-20-5(d) provides:
    Any person or organization aggrieved with respect to any
    filing which is in effect may demand a hearing thereon. If, after
    such hearing, the commissioner finds that the filing does not
    meet the requirements of this article, he shall issue an order
    specifying in what respects he finds that such filing fails to meet
    the requirements of this article, and stating when, within a
    reasonable period thereafter, such filing shall be deemed no
    longer effective. Said order shall not affect any contract or
    policy made or issued prior to the expiration of the period set
    forth in said order.
    6
    West Virginia Code § 33-2-13 provides, in pertinent part:
    The commissioner may call and hold hearings for any
    purpose deemed necessary by him for the performance of his
    duties. He shall hold hearings when required by the provisions
    of this chapter or upon a written demand therefor by a person
    aggrieved by any act or failure to act by the commissioner or by
    any rule, regulation or order of the commissioner.
    7
    West Virginia Code § 33-2-4 provides, in relevant part:
    (a) For the purpose of any investigation or proceeding
    under this chapter, the commissioner or any officer designated
    by him or her may administer oaths and affirmations, subpoena
    witnesses, compel their attendance, take evidence and require
    the production of any books, papers, correspondences,
    memoranda, agreements or other documents or records which
    the commissioner considers relevant or material to the inquiry.
    The commissioner’s authority to subpoena witnesses and
    documents outside the state shall exist to the maximum extent
    permissible under federal constitutional law.
    6
    represented the risk with respect to its Rate Protection Endorsement and corresponding Rate
    and Rule Manual pages, and whether prior approvals thereof should now be withdrawn.”
    Concluding that a hearing would serve no useful purpose, the Commissioner
    issued a twenty-page order on July 10, 2013, addressing both Erie’s request for a declaratory
    ruling and Mr. King’s administrative complaint. Denying Mr. King relief, the order
    contained detailed findings of fact and conclusions of law, declaring that upon re-review, the
    Commissioner’s prior approval of Erie’s RPE was “in proper accordance with West Virginia
    law.”
    Following the issuance of the Commissioner’s order, Mr. King filed an appeal
    in the Circuit Court of Kanawha County pursuant to the State Administrative Procedures Act
    (“APA”),8 asserting, inter alia, that the Commissioner was statutorily required to withdraw
    the prior approval of Erie’s RPE and that the Commissioner was clearly wrong with respect
    to certain findings of fact.9 The circuit court heard oral arguments on the matter on August
    8
    West Virginia Code § 29A-5-4(a) (2015) provides, in pertinent part: “Any party
    adversely affected by a final order or decision in a contested case is entitled to judicial review
    thereof under this chapter, but nothing in this chapter shall be deemed to prevent other means
    of review, redress or relief provided by law.”
    9
    Mr. King did not appeal the denial of his request for a hearing before the
    Commissioner.
    7
    1, 2014. Thereafter, on September 12, 2014, the circuit court issued its final order reversing
    the Commissioner’s decision. The order provides in relevant part:
    Ordinarily, the undersigned would be inclined to remand
    this matter for further proceedings at the administrative level
    but, at oral argument, counsel for the Commissioner made clear
    that the Commissioner’s overriding concern is the perceived
    ramifications of a private citizen challenging the acts of an
    insurer, more so than the merits of any such challenge. Remand,
    therefore, would be an exercise in futility and [Mr. King] would
    simply refile his appeal here. Accordingly, this Court having
    reviewed the same evidence, and having found that Erie’s RPE
    violates Chapter 33; contains misleading clauses; that the title
    itself is misleading; that it is being solicited by deceptive
    marketing; that its benefits are unreasonable in relation to the
    premium charged; and is not in the public’s interest, but the
    Commissioner having failed to withdraw approval as he was
    statutorily required to do, the Order appealed from is hereby
    REVERSED and continued approval of the RPE is
    OVERRULED. The Court leaves to the discretion of the
    Commissioner an orderly process by which policies currently
    subject to RPE are otherwise renewed and converted to
    traditional rating also previously approved. Alternatively,
    nothing herein precludes Erie from again seeking approval, with
    proper fiscal disclosure, deletion of misleading clauses and title,
    neutral rating, proper consumer advertising and agent training,
    all as the Commissioner in full compliance with West Virginia
    law might allow, on a strictly voluntary basis by the consumer.
    Upon entry of the circuit court’s order, this appeal followed.10
    10
    By agreement of the parties, the circuit court’s order was stayed pending this appeal.
    8
    II. Standard of Review
    This is an administrative appeal and our review is governed by the same
    statutory standard that applied to the circuit court’s consideration of this matter. As we
    explained in syllabus point one of Muscatell v. Cline, 
    196 W.Va. 588
    , 
    474 S.E.2d 518
    (1996):
    On appeal of an administrative order from a circuit court,
    this Court is bound by the statutory standards contained in
    W.Va.Code § 29A-5-4(a) and reviews questions of law
    presented de novo; findings of fact by the administrative officer
    are accorded deference unless the reviewing court believes the
    findings to be clearly wrong.
    We further advised in Muscatell that
    [i]n cases where the circuit court has amended the result
    before the administrative agency, this Court reviews the final
    order of the circuit court and the ultimate disposition by it of an
    administrative law case under an abuse of discretion standard
    and reviews questions of law de novo.
    Id. at 590, 
    474 S.E.2d at 520
    , syl. pt. 2. With these standards in mind, we determine whether
    the circuit court erred in reversing the decision of the Commissioner and overruling the prior
    approval of Erie’s RPE.
    III. Discussion
    The primary focus of the arguments in this appeal concerns whether the circuit
    court engaged in an improper re-examination of Erie’s rate and form policy filing for its RPE
    that was approved by the Commissioner in 2010. In that regard, the petitioners contend the
    9
    circuit court erroneously conducted a de novo review of the prior approval of the RPE and
    unequivocally substituted its own judgment for that of the Commissioner contrary to this
    Court’s decisions in State ex rel. CitiFinancial, Inc. v. Madden, 
    223 W.Va. 229
    , 
    672 S.E.2d 365
     (2008) (“CitiFinancial I”); West Virginia Employers’ Mutual Insurance Co. v. Bunch
    Co., 
    231 W.Va. 321
    , 
    745 S.E.2d 212
     (2013) (“Bunch”); and Lightner v. Riley, 
    233 W.Va. 573
    , 
    760 S.E.2d 142
     (2014) (“CitiFinancial II”). By not affording deference to the
    Commissioner’s decision concerning the validity of the RPE as required by this trilogy of
    cases, the petitioners assert that the circuit court misapplied the standard of review for
    administrative appeals set forth in West Virginia Code § 29A-5-4(g).11 In addition, the
    petitioners argue that the circuit court’s decision is clearly wrong because the findings of fact
    contained therein are contrary to the evidence set forth in the record. By making erroneous
    11
    West Virginia Code § 29A-5-4(g) provides:
    The court may affirm the order or decision of the agency
    or remand the case for further proceedings. It shall reverse,
    vacate or modify the order or decision of the agency if the
    substantial rights of the petitioner or petitioners have been
    prejudiced because the administrative findings, inferences,
    conclusions, decision or order are:
    (1) In violation of constitutional or statutory provisions; or
    (2) In excess of the statutory authority or jurisdiction of the
    agency; or
    (3) Made upon unlawful procedures; or
    (4) Affected by other error of law; or
    (5) Clearly wrong in view of the reliable, probative and
    substantial evidence on the whole record; or
    (6) Arbitrary or capricious or characterized by abuse of
    discretion or clearly unwarranted exercise of discretion.
    10
    findings of fact and failing to afford deference to the Commissioner’s decision, the
    petitioners submit that the circuit court has invaded the Commissioner’s rate making
    authority thereby violating the separation of powers doctrine set forth in our State
    Constitution. The end result according to the petitioners is an obfuscation of the different
    roles of the Commissioner and the judiciary that will have the effect of destabilizing the
    regulation of insurance in West Virginia.12
    Maintaining this case does not implicate the Commissioner’s rate making
    authority, Mr. King argues that the circuit court applied the appropriate standard of review,
    correctly finding that several of the Commissioner’s findings of fact were clearly wrong and
    that the Commissioner encroached upon judicial functions in reaching several of his
    conclusions of law. Mr. King further contends the circuit court did not err in determining
    that this Court’s decisions in CitiFinancial I, Bunch, and CitiFinancial II were not relevant
    to this matter. In that regard, he states that this case is distinguishable from CitiFinancial I
    because it is an administrative appeal as opposed to a collateral civil action. He claims that
    12
    The Commissioner, separate and apart from Erie, argues that the circuit court’s
    decision must be reversed because Mr. King is not an “aggrieved party” due to the fact that
    application of the RPE to his policy resulted in a decrease of his total premium. The
    Commissioner maintains that absent the status of an “aggrieved party,” Mr. King had no
    basis to request a hearing and review of the RPE under West Virginia Code § 33-2-13. Upon
    review of the record, we find that we need not address this issue because the proceedings
    before the Commissioner were initiated by Erie upon the filing of its petition for a
    declaratory ruling concerning the scope of West Virginia Code § 33-20-9.
    11
    Bunch and CitiFinancial II are distinguishable because those decisions focused upon whether
    there was a failure to exhaust administrative remedies due to the Commissioner’s refusal to
    hold a hearing. Mr. King points out that he did not appeal the Commissioner’s decision
    because he was denied a hearing but rather simply asserted there was no basis in the record
    for certain findings of fact and conclusions of law rendered by the Commissioner. In sum,
    Mr. King argues that the circuit court’s decision to reverse the Commissioner’s order was
    based on the record and application of the appropriate standard of review under the APA.
    Despite Mr. King’s claim that this case is “limited to the failure to withdraw
    approval of the Rate Protection Endorsement, not the rates applicable thereto,” the record in
    this case shows that from the outset, he has maintained that “the benefits of the RPE are
    unreasonable in relation to the premium charged.” In fact, it was the resulting forty percent
    increase in Mr. King’s liability premium through the addition of the RPE to his insurance
    policy that caused him to first inquire about the changes thereto. Thus, Mr. King’s assertion
    that this case does not involve rate making rings hollow. Clearly, this is an administrative
    appeal of a rate and form filing approval. As such, the circuit court committed clear error
    by refusing to apply the holdings in this court’s trilogy of cases setting forth the parameters
    of judicial involvement when matters of insurance rate making are at issue. A review of those
    cases illustrates not only the relevance of that precedent but how the circuit court’s rulings
    in this matter are in direct conflict with those decisions.
    12
    In CitiFinancial I, this Court was required to determine whether an individual,
    Paul W. Lightner, could challenge the reasonableness of an amount charged for credit
    insurance in connection with certain loans through a civil action. The lender, CitiFinancial,
    initiated the civil action when Mr. Lighter defaulted on another loan. CitiFinancial sought
    a writ of prohibition from this Court arguing, inter alia, that whether a charge for insurance
    is unreasonable or excessive is a decision for the Commissioner and, therefore, the circuit
    court should be prohibited from allowing Mr. Lighter to pursue the matter in the underlying
    civil action. Upon examination of the West Virginia Consumer Credit Protection Act and
    the relevant insurance statutes, this Court concluded that the Commissioner’s authority over
    matters involving insurance rate making and insurance-related forms was unquestionable.
    Accordingly, we held that “[a]ny challenge to an approved insurance rate by an aggrieved
    person or organization should be raised pursuant to the provisions of West Virginia Code §
    33-20-5(d) (1967) (Repl.Vol.2006) in a proceeding before the Insurance Commissioner.”
    CitiFinancial I, 223 W.Va. at 231, 
    672 S.E.2d at 367
    , syl. pt. 3. In so holding, we explained
    that
    factual evidence on issues such as loss ratios and rates of return
    is required to disprove the reasonableness of an established
    insurance rate. These issues, due to their highly specialized
    nature, are typically reserved to the Commissioner’s bailiwick.
    See W.Va.Code §§ 33-20-3; 33-20-4, 33-6-30(b). It stands to
    reason that if a circuit court is allowed to invade this
    administrative arena and reexamine the issue of whether a given
    insurance rate is reasonable or excessive, the judiciary will
    necessarily be substituting its determinations as to permissible
    insurance rates for those previously determined by the
    13
    Commissioner and supplanting its opinion in matters expressly
    delegated to the Commissioner’s expertise and jurisdiction. A
    further peril that cannot be overlooked is that judicial
    intervention in the rate making area would open the door to
    conflicting decisions amongst the various circuits regarding
    what constitutes an unreasonable or excessive charge for credit
    insurance. In this manner then, the uniformity of regulation that
    the Legislature has established by delegating all matters
    involving rate making and rate filings to the Commissioner is
    certain to be infringed if circuit courts or jurors are permitted to
    second guess the reasonableness of rates previously approved by
    the Commissioner.
    223 W.Va. at 237, 
    672 S.E.2d at 373
    . We also observed that in 2002, the Legislature
    amended West Virginia Code § 33-6-30 adding a presumption of statutory compliance for
    policy forms and rates approved by the Commissioner.13 We determined that
    the inclusion of the statutory language that creates a
    presumption of compliance occurred as part of the Legislature’s
    attempt to strengthen the rate making powers of the
    Commissioner. See W.Va.Code § 33-6-30(b), (c) (2002
    amends). Through its adoption of this statutory language, the
    Legislature established a procedural mechanism by which
    insurance rates are presumed to be in compliance with all
    regulatory requirements upon their approval by the
    Commissioner. While approved insurance rates are still subject
    to challenge, the burden for disproving the validity of such rates
    is placed on the entity who seeks to set the rates aside.
    223 W.Va. at 239, 
    672 S.E.2d at 375
    . Accordingly, we concluded that
    13
    West Virginia Code § 33-6-30(c) (2011) provides, in pertinent part: “Where any
    insurance policy form, including any endorsement thereto, has been approved by the
    commissioner, and the corresponding rate has been approved by the commissioner, there is
    a presumption that the policy forms and rate structure are in full compliance with the
    requirements of this chapter.”
    14
    [i]n providing for a cause of action that permits the
    recovery of excess charges included in a consumer credit
    transaction pursuant to the provisions of West Virginia Code §
    46A-3-109 (1998) (Repl.Vol.2006) and § 46A-5-101 (1996)
    (Repl.Vol.2006), the Legislature did not authorize the circuit
    courts to invade the jurisdiction of the Insurance Commissioner
    and conduct a reexamination of insurance rates previously
    approved by the Commissioner.
    223 W.Va. at 231, 672 S.E2d. at 367, syl. pt. 2.
    We, of course, recognized in CitiFinancial I that “[a]ny ruling issued by the
    Commissioner on the issue of the reasonableness of insurance rates or compliance with
    statutory provisions is a final order that is subject to the provisions of the Administrative
    Procedures Act (‘APA’).” Id. at 239, 
    672 S.E.2d at 375
    . In other words, “judicial review of
    a determination by the Commissioner on the issue of whether insurance rates are reasonable
    and in compliance with statutory requirements does exist.” 
    Id.
     We proceeded to set forth the
    parameters of that judical review in Bunch. 
    231 W.Va. 321
    , 
    745 S.E.2d 212
    .
    In Bunch, the petitioners, the West Virginia Employer’s Mutual Insurance
    Company doing business as BrickStreet Mutual Insurance Company (“BrickStreet”) and the
    Commissioner, appealed a decision of the Circuit Court of Kanawha County that reversed
    and vacated an administrative order of the Commissioner upholding previously approved
    workers’ compensation insurance policy rates. Specifically at issue was the expense of an
    agent commission that was included in the worker’s compensation premium BrickStreet was
    15
    charging to the Bunch Company (“Bunch”) and other similarly situated insureds. Complying
    with the dictates of CitiFinancial I, Bunch filed a consumer complaint with the
    Commissioner alleging that BrickStreet was “unlawfully charging an agent commission for
    its ‘direct write’ business.” Id. at 325, 745 S.E.2d at 216. Denying Bunch relief, the
    Commissioner’s administrative order provided:
    5. The Insurance Commissioner finds there is no factual
    dispute concerning the filing and approval of the rates and forms
    of BrickStreet . . . and as a matter of law the rate filings and
    BrickStreet’s use of the same should be upheld.
    6. The Insurance Commissioner finds that the rates
    charged by BrickStreet were reasonable in relation to the
    benefits provided due to the fact that certain administrative costs
    and/or expenses are incurred by BrickStreet in handling direct
    written business which would otherwise be handled by
    appointed agents.
    Id. The Commissioner also found that Bunch had not provided any information to rebut the
    presumption of statutory compliance that attaches to insurance rates pursuant to West
    Virginia Code § 33-6-30(c). 231 W.Va. at 325, 745 S.E.2d at 216.
    Bunch appealed the decision, and the circuit court reversed and vacated the
    Commissioner’s order. The circuit court ruled that “the Commissioner erred by allowing
    BrickStreet to charge Bunch a commission when no correlative expense had been incurred”
    and that “the Commissioner erred in finding the subject insurance rates were reasonable.”
    Id. at 325-26, 745 S.E.2d at 216-17. Upon review, we agreed with the petitioners’ assertion
    16
    that the circuit court had “engaged in a rexamination of approved insurance rates and
    wrongly supplanted its opinion for that of the Commissioner in area that has been expressly
    delegated to the Commissioner’s expertise.” Id. at 328, 745 S.E.2d at 219. We noted,
    Judge Kaufman, during the hearing on this matter, was
    quick to recognize two fundamental concerns presented by this
    case: encroachment on the regulatory rate making process and
    separation of powers. Notwithstanding the trial court’s
    appreciation of these issues, it proceeded to breach established
    precepts pertaining to both of those juridical areas. Specifically
    failing to heed this Court’s recognition in State ex rel. Crist v.
    Cline, 
    219 W.Va. 202
    , 
    632 S.E.2d 358
     (2006), “that we . . . give
    deference to [the Insurance Commissioner’s] interpretation, so
    long as it is consistent with the plain meaning of the governing
    statute,” the trial court substituted its judgment for that of the
    Commissioner on a matter that clearly fell within the rate
    making area of the Commissioner’s expertise. Id. at 211, 
    632 S.E.2d at 367
    . As we recognized in Appalachian Power Co. v.
    State Tax Dep’t, 
    195 W.Va. 573
    , 
    466 S.E.2d 424
     (1995), “[a]n
    inquiring court–even a court empowered to conduct de novo
    review–must examine a regulatory interpretation of a statute by
    standards that include appropriate deference to agency expertise
    and discretion.” Id. at 582, 
    466 S.E.2d at 433
    . Ignoring the
    deference that the Commissioner was entitled to in connection
    with the interpretation of its own regulation, the trial court
    encroached upon a matter that has been expressly delegated to
    the executive branch of our state government.                   See
    Citifinancial, 223 W.Va. at 237, 
    672 S.E.2d at 373
    . In doing
    so, the trial court neglected to regard this Court’s admonition in
    Citifinancial that “the uniformity of regulation that the
    Legislature has established by delegating all matters involving
    rate making and rate filings to the Commissioner is certain to be
    infringed if circuit courts or jurors are permitted to second guess
    the reasonableness of rates previously approved by the
    Commissioner.” 
    Id.
    231 W.Va. at 331-32, 745 S.E.2d at 222-23 (footnote omitted).
    17
    Less than a year after Bunch was decided, Mr. Lightner and CitiFinancial
    returned to this Court along with Triton Insurance Company, the entity that issued the credit
    insurance policies sold to Mr. Lightner by CitiFinancial. Pursuant to the decision of this
    Court in CitiFinancial I, Mr. Lightner had filed a consumer complaint with the
    Commissioner challenging the rates for the credit insurance he had purchased and seeking
    to have the Commissioner withdraw approval for the rate filings of Triton over a period of
    fourteen years. 233 W.Va. at 576, 760 S.E.2d at 145. Upon receipt of Mr. Lightner’s
    consumer complaint, the Commissioner undertook an extensive investigation of his
    allegations, as well as all of Triton’s rate filings in West Virginia. Id. at 577, 760 S.E.2d at
    146. At the conclusion of the investigation, the Commissioner issued a decision concluding
    (1) that Triton did comply with W.Va. Code § 33-20-3 (2006) in
    its filings and that Triton’s rate filings did not violate W.Va.
    Code § 33-20-3; (2) that there is “no factual dispute as
    concerning the filing and approval of the rates and forms of
    Triton Insurance Company” and that the rates charged by Triton
    were reasonable in relation to the benefits provided; and (3) that
    a hearing upon the administrative complaint would serve no
    useful purpose and, therefore, the request for a hearing was
    denied.
    233 W.Va. at 578, 760 S.E.2d at 147 (footnote omitted).
    Mr. Lighter appealed the decision to the circuit court, which upheld the
    Commissioner’s rulings. He then sought relief from this Court. While Mr. Lightner’s
    primary assignment of error in CitiFinancial II concerned the Commissioner’s refusal to
    18
    conduct a hearing on his complaint, he also challenged the circuit court’s decision to uphold
    the Commissioner’s finding that the insurance charges were not excessive and were
    reasonable in relation to the benefits provided. Id. at 579, 760 S.E.2d at 148. Mr. Lightner
    maintained that the Commissioner had offered no data or evidence to support his conclusion
    that the lenders rates were reasonable in relation to the benefits provided and that the circuit
    court’s order added nothing to the Commissioner’s findings. Id. Noting that our review was
    controlled by the provisions of West Virginia Code § 29A-5-4(g),14 we found that “the
    Commissioner performed due diligence and questioned the rate filings, but he received
    adequate documentation and explanation from Triton prior to approving the rates from 1994
    though 2003.” 233 W.Va. at 582, 760 S.E.2d at 151. Accordingly, we affirmed the finding
    that the rates charged for the credit insurance were reasonable. Id.
    As in CitiFinancial II, before rendering a decision in this matter, the
    Commissioner undertook another review of Erie’s rate and form filing for the RPE. Finding
    the prior approval to be proper and in accordance with West Virginia law, the Commissioner
    concluded:
    4. Pursuant to W.Va. Code § 33-6-30(c) (2002), “[w]here
    any insurance policy form, including any endorsement thereto,
    has been approved by the commissioner, and the corresponding
    rate has been approved by the commissioner, there is a
    presumption that the policy forms and rate structure are in full
    14
    CitiFinancial II, 233 W.Va. at 578, 760 S.E.2d at 147.
    19
    compliance with the requirements of this chapter,” the Insurance
    Commissioner finds that the rates, forms and/or products were
    approved by the Insurance Commissioner and, therefore,
    presumed to be in compliance with Chapter 33 of the W.Va.
    Code. Further, the Commissioner has been provided with no
    information that would in fact rebut such a presumption despite
    the voluminous filings and argument of [Mr. King].
    5. The Insurance Commissioner finds there is no factual
    dispute concerning the filing and approval of the rates, forms
    and/or products of Erie as referenced herein this Order and the
    subject of [Mr. King’s] administrative complaint and as a matter
    of law the rate, form and/or product filings and Erie’s use of the
    same should be upheld.
    ....
    9. The Insurance Commissioner finds that the rates
    charged by Erie were reasonable in relation to the premium
    charged in that the benefits provided and the fact that the filing
    took into account the ramifications and usage of the optional
    endorsement known as the Rate Protection Endorsement and
    that sufficient and adequate if not substantial benefits are
    provided to policyholders who have purchased this product and
    stay within the confines of the program.
    ....
    15. The Insurance Commissioner finds and concludes
    that there are no violations of the West Virginia Code in regard
    to the Erie RPE filing and its implementation of the same to this
    policyholder, [Mr.] King.
    16. The Insurance Commissioner finds and concludes
    that the filing does not contain or incorporate by reference any
    inconsistent, ambiguous or misleading clauses, or exceptions
    and conditions which deceptively affect the risk to be assumed
    in the general coverage contract.
    20
    17. The Insurance Commissioner finds and concludes
    that there are no other provisions of the filing that are
    misleading or were misleading in how it was implemented to
    this policyholder, [Mr.] King.
    18. The Insurance Commissioner finds and concludes
    that the policies sold to [Mr.] King were not procured through
    deceptive advertising.
    19. The Insurance Commissioner finds and concludes
    that the benefits of the RPE and the filing are reasonable in
    relation to the premium charged.
    20. The Insurance Commissioner finds and concludes
    that the coverage provided therein the filing by Erie concerning
    the RPE product was sufficiently broad to be in the public
    interest.
    In reversing the Commissioner’s decision, the circuit court’s order reflects that
    no deference was accorded to the Commissioner’s determination as to the validity of Erie’s
    rate and form filing for its RPE as required by West Virginia Code § 33-6-30(c) and our
    decisions in CitiFinancial I, Bunch, and CitiFinancial II. Failing to mention the presumption
    of statutory compliance embedded in West Virginia Code § 33-6-30(c) and dismissing the
    trilogy of cases in a summary fashion, the circuit court proceeded by express admission to
    “conduct[] its own research and analysis.”         The end result was a reversal of the
    Commissioner’s decision based upon misapplication of the law, a complete disregard of the
    record, and an improper substitution of the circuit court’s opinion.
    21
    Despite our admonition in Bunch that a court may not reexamine matters that
    clearly fall within the Commissioner’s rate making authority and substitute its judgment for
    that of the Commissioner, the trial court proceeded to do that very thing in this case by
    concluding that the benefits of the RPE are “unreasonable in relation to the premium
    charged.” Relegating its finding in this regard to a footnote, the circuit court discredited the
    Commissioner’s determination on this issue on the basis that the
    RPE resulted in a 40% increase in [Mr. King’s] personal
    liability rate . . . RPE has resulted in a net gain to ERIE . . . . The
    Court has not found any cost-benefit analysis or any other entry
    in the Record to support the Commissioner’s finding that the
    benefits provided by the RPE are reasonable in relation to the
    increased liability premium.
    The circuit court’s conclusion that the benefits of the RPE are unreasonable in
    relation to the premium charged overlooked the fact that Mr. King’s overall premium actually
    decreased by the addition of the RPE to his policy. More importantly, the circuit court failed
    to recognize that when Erie sought approval for its RPE, the Commissioner made the
    decision based on 398 pages of documentation, which included experience data and
    projections that Erie had available to it at that time. In Bunch, we explained that “[b]y
    design, insurance rate setting involves the prospective use of proposed rates which are
    calculated based on cost projections derived from past experience combined with a
    reasonable expectation of future losses and expenses.” 231 S.E.2d at 323, 745 S.E.2d at 214,
    syl. pt. 5. Rather than acknowledging the highly complex nature of insurance rate setting and
    22
    this Court’s recognition that the Legislature has made clear that “rate making [is] not a matter
    intended for the courts,”15 the circuit court second guessed the reasonableness of the rates
    previously approved by the Commissioner.
    In addition to erroneously injecting itself into a rate making matter, the circuit
    court made findings of fact that were contrary to overwhelming evidence in the record below.
    In particular, the circuit court found that the RPE violates Chapter 33; is misleading based
    on its title and clauses contained within; is being solicited by deceptive marketing practices;
    and is not in the public’s interest. The circuit court made these findings by relying, in part,
    upon portions of Mr. Cook’s testimony elicited by Mr. King that were clearly taken out of
    context or simply misunderstood. Contrary to the circuit court, the Commissioner found the
    RPE was not ambiguous, unclear, or in any way misleading nor was the product deceptively
    marketed. The Commissioner pointed out in his decision that Mr. King was given the ability
    to remove the RPE from his policy on more than one occasion, yet he declined to so. Further,
    the evidence indicated that Mr. King had been provided the “Important Notice” issued by
    Erie that detailed the implementation of the product. This Court has held that “‘[t]he “clearly
    wrong” and the “arbitrary and capricious” standards of review are deferential ones which
    presume an agency’s actions are valid as long as the decision is supported by substantial
    evidence or by a rational basis.’ Syllabus Point 3, In re Queen, 
    196 W.Va. 442
    , 
    473 S.E.2d 15
    Bunch, 231 W.Va. at 331, 745 S.E.2d at 222.
    23
    483 (1996).” Syl. Pt. 5, Dale v. Oakland, 
    234 W.Va. 106
    , 
    763 S.E.2d 434
     (2014). In this
    instance, the Commissioner’s decision was clearly supported by substantial evidence, and the
    circuit court abused its discretion in substituting its judgment.
    Through the trilogy of cases discussed above, this Court has clearly prescribed
    the role of a reviewing court tasked with an administrative appeal of a matter that implicates
    the rate making authority of the Commissioner. Further, the Legislature had mandated by
    express statutory directive that “[w]here any insurance policy form, including any
    endorsement thereto, has been approved by the commissioner, and the corresponding rate has
    been approved by the commissioner, there is a presumption that the policy forms and rate
    structure are in full compliance with the requirements of this chapter.” W.Va. Code § 33-6­
    30(c). In addition, we have made clear that under the APA, a reviewing court must accord
    deference to the findings of fact made by an administrative agency unless that court believes
    the findings to be clearly wrong. Muscatell, 196 W.Va. at 590, 588 S.E.2d at 520, syl. pt. 1.
    That deference presumes that the agency’s actions are valid if the decision is supported by
    substantial evidence. Dale, 234 W.Va. at 107, 763 S.E.2d at 435, syl. pt. 5. In this instance,
    the circuit court acted independent of these established precepts and substituted its judgment
    for that of the Commissioner.
    24
    IV. Conclusion
    Accordingly, based on the foregoing, we reverse the September 12, 2014, order
    of the Circuit Court of Kanawha County and remand this case for entry of an order
    reinstating the July 10, 2013, decision of the Commissioner.
    Reversed and remanded.
    25