Filed Rate Doctrine Cases In Pennsylvania
In Ciamaichelo v. Independence Blue Cross, 814 A.2d 800 (Pa. Cmwlth. 2002), petition for allowance of appeal granted, 574 Pa. 749, 829 A.2d 1158 (2003), the Court clarified the close relationship between rates and reserves as follows:
The Insurance Department considers the amount of an insurer's reserves when approving rates, and the collection of premiums based on the rates must inevitably be a factor in the accumulation of excessive reserves.
Any determination that Blue Cross has accumulated excessive reserves would necessarily require the recalculation of the approved rates.
Further, in Ciamaichelo, 814 A.2d at 803, 805, where Petitioners previously raised similar arguments challenging the propriety of the Insurance Department's rate approvals and averring that the Blues Plans improperly accumulated excessive reserves, this Court concluded:
Approval of rates and reserves are matters within the exclusive jurisdiction of the Insurance Department and are based on statutory formula, actuarial information, and discretionary determinations.
The plaintiffs do not request damages or any other form of relief that could be ordered only by the court of common pleas.
For these reasons, primary jurisdiction over the question of whether Blue Cross has accumulated excessive reserves is with the Insurance Department as is the question of whether Blue Cross's disposition of reserve funds was in compliance with the applicable law.
Blue Cross's objection to the trial court's jurisdiction should have been sustained.
Because we conclude that the plaintiffs' cause of action is not independent of the rates approved by the Insurance Department, or of its approval of Blue Cross's reserves and investments, the filed rate doctrine bars the plaintiffs' breach of contract, breach of fiduciary duty, and nonprofit corporation law claims. . . .
The foregoing in Ciamaichelo alludes to the "filed rate doctrine" as barring a breach of contract, breach of fiduciary duty, and nonprofit corporation law claims brought by plaintiffs.
The filed rate doctrine defers to the applicable agency having the authority to fix and approve rates, and "prevents courts from questioning or changing approved rates to prevent rate discrimination among members of a class of rate payers and to preserve the role of the regulatory agency as rate setter, i.e., the reasonableness of an agency-approved rate is nonjusticiable. . . . American Telephone & Telegraph Company v. Central Office Telephone Inc., 524 U.S. 214, 118 S. Ct. 1956, 141 L. Ed. 2d 222 (1998)." Ciamaichelo, 814 A.2d at 804.
Accordingly, in Ciamaichelo, the Court held that because of the inextricable connection between the Insurance Department's approval of rates and an insurer's reserves and investments, the filed rate doctrine barred plaintiffs' aforementioned claims, which we dismissed in their entirety; they were not remanded for Plaintiffs to refile with the Insurance Department in another format.
In this regard, the Insurance Department contends that no class action format exists under the Administrative Code and that there is no viable cause of action for Petitioners pursuant to the Unfair Insurance Practices Act (UIPA).