On appeal from a final determination of the Commissioner of Insurance.
Seidman, Lane and Morton I. Greenberg. The opinion of the court was delivered by Seidman, P.J.A.D.
The primary issue raised by this appeal is whether the Commissioner of Insurance may bar an insurer which becomes a subscriber to a rating organization from adopting the rates, schedules and policy forms previously approved for use by such subscribers without the specific approval of the Commissioner. If we conclude that the Commissioner has such authority, we must next determine whether he should be estopped from exercising it in this case.
On March 18, 1980 Allstate Insurance Company advised the Commissioner by letter that as of July 1, 1980 it intended to expand its prior affiliation with the Insurers Services Office (ISO), a licensed rating organization, to include personal automobile liability and physical damage insurance. Allstate specifically declared that beginning on the effective date it would write new and renewal policies using ISO rates, schedules and policy forms then in effect. Conferences were held between representatives of Allstate and the Commissioner, and there was an exchange of correspondence. On June 10, 1980, the Commissioner sent Allstate a telegram stating that "the proposed change in your current rates, rating systems and policy forms to those of ISO or any deviation therefrom are disapproved." He ordered Allstate to continue using its existing rates until he specifically approved its use of ISO rates "pursuant to the applicable sections of N.J.S.A. 17:29A-1 et seq. "
Allstate promptly filed this appeal. It contended that the Commissioner had no statutory authority to interfere with its use of ISO rates once it became an ISO subscriber, and that the
Commissioner had always agreed with such an interpretation prior to his order of June 10, 1980. Alternatively, Allstate maintained that it had been misled by the Commissioner's prior practices and by his implied approval in this case. The Commissioner did not contest Allstate's right to become an ISO subscriber, but argued that under the applicable statutes all insurers must obtain his prior approval before adopting any rate or rate amendment, and that this requirement applied to the rate increase that would result from Allstate's adoption of the ISO rates. The Commissioner denied any inconsistency in his prior practices and he denied giving any misleading response to Allstate's announcement of its intentions. The Public Advocate intervened in support of the Commissioner's position.
We granted Allstate's request for a stay of the Commissioner's order conditioned upon Allstates' depositing in an interest-bearing trust account the difference between Allstate's prior rates and the higher ISO rates pending the outcome of this appeal. After hearing the arguments of counsel, we determined in an unreported opinion that in view of the nature of the issues presented and the significant public interests involved the record should be supplemented through a hearing before an administrative law judge and accordingly remanded the matter for such purpose to the Office of Administrative Law. We particularly required that findings of fact be made concerning: (1) the past practices of the Commissioner and the Department of Insurance in the case of independent insurers that had joined ISO and thereafter used and applied ISO rates which differed from the rates previously approved for the same insurers, and (2) how the Department treated Allstate's letter of March 18, 1980, and specifically, in what way those actions departed from the Department's past practices. We expressly indicated, however, that our determination to expand the record should not be viewed as indicative of our ultimate determination.
Hearings were held and we thereafter received the requested findings of fact. The litigants were accorded the opportunity to file supplemental briefs, and we have heard the further argument
of counsel. For present purposes it is sufficient to note that we have carefully reviewed the record made before the administrative law judge and have concluded that his findings of fact, to which we shall refer later, are supported by substantial credible evidence, and therefore will not be disturbed by us. Rova Farms Resort v. Investors Ins. Co. , 65 N.J. 474, 483-484 (1974). But our acceptance of the facts as found by the administrative law judge is not dispositive of the issues presented.
Initially, we recount briefly basic facts that are essentially undisputed. Allstate transacts more than 20% of the noncommercial passenger automobile insurance in this State. ISO, as an authorized rating organization, submits applications and supporting data to the Commissioner seeking approval of uniform rates and schedules for particular kinds of insurance on behalf of its members or subscriber insurers. While Allstate has been an ISO subscriber with respect to its commercial insurance lines, it had traditionally filed independent rate requests for personal automobile insurance. Its efforts in 1976 and 1977 to obtain rate increases by independent application therefor or by so-called "me too" filings incorporating by reference the same material that had been used by ISO to obtain increased rates for its members are described in In re Allstate Ins. Co. , 161 N.J. Super. 564 (App.Div.1978). However, those applications did not involve Allstate's decision to affiliate with ISO and use its approved rates thereafter. As to such affiliation Allstate's position has been that by becoming an ISO subscriber it is automatically entitled to use the ISO rates and that the Commissioner had no authority to issue the order under review. At the prior argument, in support of its contention, Allstate pointed to prior instances where independent insurers joined ISO and changed its rates without ...