Erie v. King involved a dispute over approved insurance rates and forms with an insured, an attorney who actually read his policy and questioned the addition of a “Rate Protection Endorsement” form to his policy. Even though the form resulted in a reduction in his premiums and could be removed at any time, Vince King claimed that the endorsement was added without his permission and he wanted some relief despite admittedly suffering no damages. The trial judge in Kanawha County overruled the Insurance Commissioner’s prior approval of this rate and form filing by Erie. The Supreme Court of Appeals of West Virginia reversed the circuit court and remanded the case for entry of an order reinstating the Commissioner’s decision in favor of Erie. The Court agreed that the circuit court engaged in an improper re-examination of Erie’s rate and form policy filing and improperly substituted its judgment for that of the West Virginia Insurance Commissioner. The statutory deference afforded the Commissioner assumes that an agency’s actions are valid if supported by substantial evidence, as the Commissioner’s actions were in this case.
If you have any questions regarding the application of the Court’s decision, please contact Laurie Barbe or another member of our First Party Insurance Team.