N.Y. File-and-Use Law Upheld:

The New York State Court of Appeals has ruled that the state insurance commissioner does not have the authority to disapprove or modify rate increases or decreases on filings that are properly submitted under the state’s file-and-use statute. The decision (Excellus Health Plan, Inc. v. Gregory V. Serio) upheld lower court rulings, which found that Superintendent of Insurance Gregory Serio had exceeded his statutory authority in 2002 when he denied Excellus Health Plan Inc. a rate increase. Under the file-and-use statute rate increases are to be deemed approved when the loss ratio anticipated under the proposed new rate falls within certain parameters. The minimum loss ratio is 80 percent and the maximum is 105 percent for individual direct pay insurance contracts. In November 2001 Excellus submitted rate increases under the file- and-use provision for 45 counties. In January 2002 Serio rejected two of the increases and reduced several others. Excellus then sued to nullify his rate changes, arguing that his actions ran counter to the file-and-use statutory scheme “by improperly conditioning a premium rate change on his review and approval.” Serio maintained that he acted properly because the law authorizes him to disapprove any premium that is “excessive, inadequate or unfairly discriminatory.” In ruling for Excellus, Justice Susan Phillips Read wrote that the “clear wording” of the statute “unambiguously states” that a rate filing “shall be deemed approved provided that the anticipated loss ratios fall within the statutorily prescribed range. Thus once the Superintendent receives a new premium rate filing, accompanied by the requisite actuarial certification, the rates specified in the filing are approved by operation of law.” Serio expressed disappointment with the decision and called upon lawmakers to pass a bill he has filed to give him more authority over health insurance rates.