State ex rel. Commissioner of Insurance v. North Carolina Automobile Rate Administrative Office , 24 N.C. App. 223 ( 1974 )

PARKER, Judge.

The Commissioner of Insurance has no authority to prescribe or regulate premium rates except insofar as that authority has been conferred upon him by statute. In re Filing by Automobile Rate Office, 278 N.C. 302, 180 S.E. 2d 155 (1971) ; In re Filing by Fire Ins. Rating Bureau, 275 N.C. 15, 165 S.E. 2d 207 (1969). Such authority as the Commissioner has. with respect to motorcycle liability insurance rates is contained' in Article 25 of G.S. Chap. 58, which also provides for the creation and prescribes the functions of the North Carolina Automobile Rate Administrative Office. The word “motorcycle” does- not appear in Article 25 of G.S. Chap. 58, but the statutes in that Article use the words “automobile” and “motor vehicles which are private passenger vehicles” and “private passenger vehicles” interchangeably, and although none of these terms are further defined in G.S. Chap. 58, we hold that “automobile” liability insurance includes “motorcycle” liability insurance and that the same laws apply to both.

In Comr. of Insurance v. Automobile Rate Office, 23 N.C. App. 475, 209 S.E. 2d 411 (1974), this Court held that the Commissioner of Insurance exceeded the authority delegated to him by the Legislature by ordering the establishment of a premium rate classification plan for private passenger automobile liability insurance not based in whole or in part on the age and sex of the drivers. In the order appealed from in the present case the Commissioner has not only undertaken to eliminate age and sex of the drivers as a basis for classification,1 but he has gone further and has undertaken to eliminate all classifications insofar as motorcycle liability insurance rates are concerned. If: the liability insurance applies to a “motorcycle,” “motor scooter,” “motorbike,” or “other similar motor vehicle,” descriptive words not otherwise defined, then under the '.order appealed from all other classification criteria are abolished and the same premium rate is made applicable to each policy regardless of the size, weight, or horsepower of the vehicle, its use, or the age, sex, or marital status of the driver. G.S. 58-246(1) makes it the duty of the North Carolina Automobile Rate Administrative Office in the first instance to “fix rates for .automobile bodily injury and property damage insurance and equitably adjust the same as far as practicable in accordance with the hazard of the different classes of risks as established by said bureau.” (Emphasis added.) This is an express legislative mandate to establish classifications for premium rate purposes “as far as practicable in accordance with the hazard of the different classes of risks.” The legislative mandate to make equitable rate classifications was further strengthened and made directly applicable to the Commissioner of Insurance by enactment of Chap. 908 of the 1971 Session Laws, now codified as G.S. 58-248.9. The order appealed from contains no finding that all drivers, regardless of their age, sex, or any other criteria, of “motorcycles, motor scooters, motorbikes and other similar motor vehicles not used for commercial purposes,” regardless of the size, weight, or power of such vehicles, constitute a reasonably homogenous group sharing essentially the same hazard for liability insurance purposes. Had there been such a finding based upon substantial evidence, it is possible that the order here appealed from, insofar as it creates such a single classification, might be sustained as sufficiently complying with the legislative mandate to establish classifications for premium rate purposes “as far as practicable in accordance with the hazard of the different classes of risks.” That question we need not presently decide, since in the absence of such a finding it is clear that the Commissioner of Insurance exceeded the authority delegated to him by the Legislature.

In other respects also the orders appealed from cannot be sustained. Certain of the findings upon which the orders purport to be based are “ [u] nsupported by material and substantial evidence in view of the entire record ...” as required by G.S. 58-9.6 (b). (5). In some instances factual findings were made on the basis that the Commissioner found “no reason to believe” otherwise. For example, Findings of Fact 10, 12 and 13 contain the following:

10. “ . . . There is no reason to believe that assigned risk loss experience is better or worse than voluntary experience for motorcycle liability insurance.”

12. “ . . . There is no reason to believe that average claim costs for motorcycle bodily injury liability claims and property damage liability claims would have trended differently [from automobile liability claims] during the period and for the purposes of this Decision and Order I find this trend to be correct to project losses during and after the aforesaid period.”

13. “[Tjhere is no reason to believe that the pure premium developed would be substantially different if only 10/20 BI and 5 PD limits premium and experience were reported [rather than total limits of earned premium and total limit incurred losses] and I find the pure premium to be correct in regard to 10/20 bodily injury and 5 PD limits premiums and losses.”

A finding that a fact is true because the fact-finder finds no reason to believe it is not true is certainly not supported by “material and substantial evidence.”

Considering the entire record, we find no material and substantial evidence to support the decision of the Commissioner to eliminate completely the existing motorcycle liability insurance plan, which has been in effect in this State for many years. Furthermore, as above pointed out the Commissioner exceeded his delegated statutory authority in attempting to adopt in its place a one-class plan for all motorcycle operators.

For the reasons stated, the orders of the Commissioner of Insurance which are the subject of this appeal are

Reversed and vacated.

Judges Campbell and Vaughn concur.