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Goodwin issues pre-emptive strike against auto insurance rate proposal

Posted June 5, 2014
Updated June 6, 2014

Insurance Commissioner Wayne Goodwin

— Insurance Commissioner Wayne Goodwin came out Thursday against an attempt to resurrect a change to North Carolina's auto insurance rate structure that lawmakers killed last year.

The proposal, which the Department of Insurance said could be heard in the General Assembly as early as next week, would dismantle the North Carolina Rate Bureau, which negotiates rates for insurers with the state and sets the maximum allowable rates. Under the proposal, which technically doesn't exist yet but has been shared with lawmakers in recent weeks, insurers would be allowed to opt out of the Rate Bureau and set rates beyond the cap.

The House Insurance Committee defeated a similar proposal backed by large insurers such as State Farm and Geico in April 2013.

Insurers said then that the Rate Bureau prevents companies from offering various discounts and noted that they would have an incentive to keep rates low in order to compete.

Goodwin said Thursday that more than 2,000 discounts already are available in North Carolina, and he urged public opposition to what has been dubbed the "Good Driver Discount Bill."

"If this proposal passes, I am certain that car insurance rates will go up, even for good drivers," he said in a statement. "Despite what profit-driven insurance companies will tell you, I will have little to no authority to stop rates from going through the roof."

North Carolina has the sixth-lowest average auto insurance rates in the country, he said, and more than 150 companies offer auto policies in the state.

"The insurance companies don’t need a change in law to charge you less. The only reason they need a change in law is to charge you more," he said. "This bill has nothing to do with helping drivers. It has everything to do with insurance companies’ bottom line."

Oyango Snell of the Property Casualty Insurers Association of America responded by saying the proposal is "simply a common-sense approach to allow more good drivers in North Carolina an opportunity to save money on insurance."

Goodwin would still be able to control rates but wouldn't have to deal with the Rate Bureau, Snell said.

"The discount programs and products that many North Carolina consumers desire are not available because of the antiquated rate-making regime," said in a statement, adding that reforming the existing system would allow insurers to forgive tickets and accidents that they can't under the state's mandatory points system.

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  • cruzinlong Jun 9, 2014

    View quoted thread



    Then why does my recent letter per my 200 rate hike from STATE FARM state the below ?

    "I understand and agree that the premium for coverage provided is based on a rate greater than the rates applicable in the state of N.C., meaning a rate greater than rates of the NC rate bureau " . ?

  • Bogie Jun 7, 2014

    Auto insurance companies writing in NC can grant discounts (otherwise known as deviations) for pretty much any reason. All the Rate Bureau does is set the maximum rate. This bureau system has been in effect since 1939, but the companies could not by law grant discounts until the 1977 legislature authorized them to do so. That's 37 years, during which time the companies have been quite profitable, folks. Many more companies have sought licenses to write in NC since then. If companies can opt out of this system, there will be little or no control over what they charge. This is greed, pure and simple.

  • Jun 6, 2014

    View quoted thread


    Not sure, but there seems to be a recent law (according to my agent) that now requires your policy reflect actual replacement cost over true appraised value. WHen they wanted to raise my rate, I asked why. I was told, it would cost more to rebuild your home that its current appraised value. I checked with other insurers and they all said the same thing. New law. Replacement value. I don't know if this is TRUE or not, but it had to have happened recently.

  • cruzinlong Jun 6, 2014

    my homeowners just went up 200 bucks, thought they were going to try and hold THOSE rates down ?! This after $300.00 hike over the course of the last 2 years. Anyone else get ....or shall I say jacked?
    http://www.newsobserver.com/2014/01/03/3504661/insurers-seek-25-percent-hike.html

  • Jun 6, 2014

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    OMG, MEP believes in Gubmint Regulations! Well, at least where they benefit HIM PERSONALLY. Who woulda thunk it! (Well, everyone, but it's too much fun posting it.)

  • Forthe Newssite Jun 6, 2014
    user avatar

    "be heard in the General Assembly as early as next week, would dismantle the North Carolina Rate Bureau, which negotiates rates for insurers with the state and sets the maximum allowable rates. Under the proposal, which technically doesn't exist yet but has been shared with lawmakers in recent weeks, insurers would be allowed to opt out of the Rate Bureau and set rates beyond the cap."

    Very glad to see Goodwin standing up to the GA because if they had their way they would dismantle it.....I'm SURE the GA has it's hands out to the ins. companies.

    "The insurance companies don’t need a change in law to charge you less. The only reason they need a change in law is to charge you more,"

    Bingo!!! Keep up the good work Mr. Goodwin.

  • iopsyc Jun 6, 2014

    "The insurance companies don’t need a change in law to charge you less. The only reason they need a change in law is to charge you more"

    That single quote says it all.

  • SaveEnergyMan Jun 6, 2014

    Agree with the previous two posts. Our Insurance Commissioners have been ruthless in holding costs down. That's why many national discounts aren't available here - we already cut the insurance company's profits too much.

    Interestingly, I got an e-mail from Nationwide Insurance encouraging me to tell my representatives to vote AGAINST the measure. They said it would raise insurance prices and that we currently enjoy some of the lowest prices in the country. Glad to see them "on my side" with this issue.

  • miseem Jun 5, 2014

    We don't need the government telling the job creating corporations how to run their business.

  • Kenny Dunn Jun 5, 2014
    user avatar

    Glad to see Goodwin standing up to those in the GA pushing this idea. My representatives already oppose it but they are not in control.

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