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AND THAT ILLINOIS AND NEW YORK INSURANCE REGULATORS DID NOT APPROVE KICKBACKS, EITHER.
In Wilson v. Everbank, N.A., 77 F. Supp. 3d 1202 (S.D. Fla. 2015), the District Judge held that the filed rate doctrine did not apply at the motion to dismiss stage. This ruling has consequences.
The filed rate doctrine confers an immunity. Where a regulator is charged with approving rate requests, and a regulated entity files a rate request with the regulator supported by all required documentation, then the resulting rate approved by the regulator in such a case is called a "filed rate" and the "filed rate doctrine" confers immunity.
In Wilson, the Court ruled that the filed rate doctrine did not apply when it was raised in a motion to dismiss. As the Court titled this section of its opinion denying the motion to dismiss, "The Filed Rate Doctrine Does Not Bar Plaintiffs' Claims Against the Insurer Defendants At This Stage." Wilson v. Everbank, N.A., 77 F. Supp. 3d 1202, 1232 (S.D. Fla. 2015). This is significant.
First, this ruling is significant from a procedural point of view because the Court recognized that the filed rate doctrine is an affirmative defense. The party raising the doctrine has the burden of proving it as an affirmative defense with evidence, unless the ground for the affirmative defense appears from the face of the plaintiffs' complaint. Clearly that was not the case here.
In addition, the filed rate doctrine simply did not apply on the merits. The Insurer Defendants which allegedly provided force-placed insurance policies to the plaintiffs' lender argued that they should be immunized by the filed rate doctrine. They contended that the complaint should be dismissed because the Insurance Commissioners of Florida, Illinois, and New York approved their premium rates for force-placed insurance and that the approved premium rates were charged to the plaintiffs. Therefore, they concluded, even if the alleged kickbacks existed they were part of approved rates and so the defendants are immunized from any suit challenging the approved rates.
If the District Judge was convinced that the kickbacks alleged by the plaintiffs were included in the rates approved by the Insurance Commissioners, then she would have had no alternative but to grant the Insurer Defendants' motion to dismiss. That she denied the Insurer Defendants' motion to dismiss under the filed rate doctrine means that she refused to rule that the Insurer Defendants are immunized by the filed rate doctrine because she is unconvinced that the kickbacks of which the plaintiffs complained were included in the rates approved by the Insurance Commissioners.
Please Read The Disclaimer. ©2015 by Dennis J. Wall, author of "Lender Force-Placed Insurance Practices" (American Bar Association 2015). The filed rate doctrine is discussed in § 6.2 in particular. All rights reserved.
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