Opinion
June 21, 1990
Appeal from the Supreme Court, New York County (Ira Gammerman, J.).
The petitioners' rate classification provides reduced premium rates for homeowners insured by the petitioners for three or more years. The only basis for the discounted rates for homeowners previously insured by petitioners, as opposed to homeowners with the same risk factors who were previously insured by other insurance companies for the same length of time or previously uninsured, is statistical data showing that petitioners' insured's probability of loss decreases in proportion to the number of years the insured is a State Farm policy holder. No explanation is offered as to why a homeowner who otherwise presents exactly the same objective risk characteristics as a State Farm insured should receive a higher rate.
The burden is placed upon the insurer to prove that the rate classification proposed is not unfairly discriminatory. (Insurance Law §§ 2303, 2305, 2307 [a].)
The facially discriminatory treatment of homeowners who present the same objective risk factors by a rate classification based on the length of time the homeowner was insured by State Farm constitutes substantial evidence for the determination. Where a determination is not irrational, the court should defer to the respondent's expertise in determining what constitutes a valid risk characteristic upon which to base a rate classification. (See generally, Matter of Medical Malpractice Ins. Assn. v Superintendent of Ins. of State of N.Y., 72 N.Y.2d 753, 763, cert denied 490 U.S. 1080; Matter of Pell v. Board of Educ., 34 N.Y.2d 222, 231.)
Concur — Sullivan, J.P., Carro, Rosenberger and Smith, JJ.