COA: Filed Rate Doctrine Bars UDTP Claims Related to Workers' Comp Rates Set by Rate Bureau

Today, in Stutts v. Travelers, the COA held that the "filed rate doctrine" applied and barred Plaintiff's claims of unfair and deceptive trade practices against his workers' comp insurer. Plaintiff applied for a workers' comp insurance policy through the NC assigned risk plan. The NC Rate Bureau assigned defendants as plaintiff's servicing insurance carrier. Plaintiff excluded himself from coverage under the policy, and did not have any employees for the policy periods of 2003 and 2004. In 2005, Plaintiff was injured on the job, and filed a workers' comp claim under his policy with defendants. Defendants denied coverage because Plaintiff had ddeclined to cover himself. Defendants did, however, return some premium to Plaintiff because he had no employees in 2003 and 2004.

Plaintiff filed suit against defendants alleging unfair and deceptive trade practices and demanding a return of his entire premium balance. He also filed a complaint with the Rate Bureau, which was dismissed.

The COA held that Plaintiff's suit was barred by the filed rate doctrine, which provides that "a plaintiff may not claim damages on the ground that a rate approved by a regulator as reasonable is nonetheless excessive because it is the product of unlawful conduct." The COA specifically noted that this doctrine applies to UDTP claims.

Plaintiff also argued that a risk of loss did not attach where the insured Plaintiff had no employees and was not covered himself, and thus there was thus no consideration for the insurance contract. The COA rejected this argument, holding that because Plaintiff might have hired employees during the covered period, a risk of loss did in fact attach.