(Article from Insurance Law Alert, January 2021)
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The filed rate doctrine may prevent policyholders from suing insurance companies and other regulated entities based on allegedly unreasonable rates if those rates were approved by a regulator. See September 2020 Alert, October 2018 Alert, September 2015 Alert, May 2011 Alert, October 2010 Alert. In a recent case, the central issue in dispute was whether the filed rate doctrine extends to a situation in which an intermediary, rather than the regulated entity, charges the filed rate to its customers. Alpert v. Nationstar Mortgage LLC, 983 F.3d 1129 (9th Cir. Dec. 31, 2020).
A homeowner was required by his mortgage company (Nationstar) to maintain a hazard insurance policy. When his policy lapsed, Nationstar purchased insurance and charged the homeowner a rate approved by the Washington Insurance Commissioner. The homeowner sued, alleging that although the rate he was charged accurately reflected the rate approved by state authority, it did not represent Nationstar’s true cost of insurance. He claimed that Nationstar received kickbacks in the form of commissions, such that the actual cost of the policy to Nationstar was substantially less than what he was charged. Nationstar argued that the homeowner’s claims are barred by the filed rate doctrine.
Noting issues of unsettled state law, the Ninth Circuit certified the following questions to the Washington Supreme Court:
- Should the filed rate doctrine apply to claims by a Washington homeowner against a loan servicer arising from the placement of lender placed insurance . . . where the servicer purchased the insurance from a separate insurance company who filed the insurance product with the Washington State Office of the Insurance Commissioner?
- In the event the filed rate doctrine does apply to this type of transaction, do the damages requested by Plaintiff fall outside the scope of the filed rate doctrine, or rather do they “directly attack agency-approved rates,” such that they are barred. . .
We will keep you apprised of further developments in this matter.