• March 5, 2009

Judge Rules in BCBSND's favor in rate increase hearing

Judge Susan Bailey approves BCBSND bank depositor rate increase of 14.8 percent previously denied by the North Dakota Department of Insurance.

Blue Cross Blue Shield of North Dakota received official notice from the North Dakota Office of Administrative Hearings that Administrative Law Judge Susan Bailey has ruled in favor of BCBSND. The decision reverses the July 18, 2008, North Dakota Department of Insurance Department denial of BCBSND's bank depositor rate increase request of 14.8 percent.

The recommended order makes BCBSND's 14.8 percent rate increase effective immediately; however, the North Dakota Insurance Commissioner has 60 days to accept or deny the recommendation.

Since August 2008, BCBSND has lost $6.7 million in premium revenue in its bank depositor line of business. The company has experienced a claims trend of between 12 percent and 16.5 percent for that line of business.

Shortly after the Department of Insurance denied the 14.8 percent rate increase last July, BCBSND requested an administrative hearing protesting the denial. The administrative hearing was conducted November 24-26.

"Our initial rate request was based on sound actuarial science and research, and the rate requested was necessary to continue to pay the member claims experienced in the bank depositor line of business," said BCBSND President and CEO Mike Unhjem. "While this decision is certainly affirmative of the good, efficient work BCBSND does every day, we are confident that we can continue to improve our relationship with the North Dakota Department of Insurance on behalf of our members and providers." Unhjem added that BCBSND knows any rate increase is a burden to its members, but the increases are necessary to cover the cost of member claims.

BCBSND will continue to work with the North Dakota Department of Insurance on the pending rate offers and hopes to resolve all issues as quickly as possible.

Office of Administrative Hearings - Rate Appeal