2 N.Y.3d 166 (2004)
Under New York Insurance Law § 4308(g), once an insurer submits a premium rate filing accompanied by the required actuarial certification indicating that anticipated loss ratios fall within the statutory range, the rates specified in the filing are automatically approved by operation of law, limiting the Superintendent of Insurance’s power to modify those rates.
Summary
Excellus Health Plan submitted a rate filing to the Superintendent of Insurance seeking to adjust premium rates. The Superintendent, believing the increases were too steep and discrepancies too wide, modified the rates. Excellus challenged this modification, arguing it violated the “file and use” provisions of Insurance Law § 4308(g), which states rate filings “shall be deemed approved” if actuarial certifications are compliant. The New York Court of Appeals held that the Superintendent’s actions were improper because the statute mandates approval upon filing with proper certification, and the Superintendent cannot subsequently disapprove or modify those rates.
Facts
Excellus, a health care coverage provider in upstate New York, submitted a rate filing to the Superintendent of Insurance seeking to implement new premium rates for individual direct-pay HMO and POS contracts effective January 1, 2002.
The submission included actuarial certifications as required by Insurance Law § 4308(g).
The Superintendent acknowledged receipt but cautioned that the premium adjustments could not be implemented until the review was complete and Excellus received written confirmation.
Subsequently, the Superintendent notified Excellus that he was modifying some of the rates by reducing increases and, in some instances, denying any increase at all.
Procedural History
Excellus initiated a CPLR article 78 proceeding challenging the Superintendent’s modifications.
Supreme Court annulled the Superintendent’s letters, determining the filed rates were approved as a matter of law.
The Appellate Division affirmed, holding that the Superintendent’s interpretation imported a policy not expressed in the plain language of the statute.
The Superintendent appealed to the New York Court of Appeals.
Issue(s)
Whether the Superintendent of Insurance may exercise premium rate review and approval authority under Insurance Law § 4308(b) to disapprove or modify rate increases or decreases deemed approved under the “file and use” provisions of Insurance Law § 4308(g).
Holding
No, because Insurance Law § 4308(g) states that rate filings accompanied by the required actuarial certification “shall be deemed approved,” and the Superintendent cannot interpolate an exception unexpressed by the legislature.
Court’s Reasoning
The Court of Appeals relied on the plain language of Insurance Law § 4308(g)(1), which states that a rate filing “shall be deemed approved,” provided it is accompanied by compliant actuarial documentation.
The Court rejected the Superintendent’s argument that subsection (b) allows him to disapprove rates that are “excessive, inadequate, or unfairly discriminatory,” finding that this would create a “forced and unnatural interpretation” of the statute.
The Court noted that the legislative history of the file and use provisions indicates the Legislature sought to allow for timely rate increases while ensuring equitable rates, with loss ratios serving as a gauge of reasonableness.
The Court quoted the Governor’s Approval Memorandum, emphasizing that the legislation aimed to “allow appropriate rate increases to be implemented on a more timely basis and also help assure that rates are equitable.”
The Court emphasized that the Superintendent retains other powers, such as ensuring the correctness of actuarial certifications, issuing regulations regarding loss ratio certifications, and acting against excessive management salaries.
The dissenting opinion argued that the Superintendent’s authority to review rates should not be eliminated absent explicit language and that the file and use procedure was intended as an alternative to a prior-approval process, not as a repeal of the Superintendent’s review power. The dissent argued the statute’s provisions can be read together in a manner that gives meaning to each of its terms and effect to the overriding intent of the 1995 legislation.
The Court explicitly stated that, even if the file and use statutory scheme, unmoderated by his review and potential intervention, undercuts affordable health care for direct-pay customers, it must hew to the statute’s text and that the remedy sought by the Superintendent on grounds of public policy lies with the Legislature, not with the courts.