Proposal Could Spark Insurance Rate Increases

Senate Bill 901 would allow a judge to decide appeals of insurance rate cases. Long, who is elected as a consumer advocate, traditionally has had the final say on requests by insurance companies to raise rates on their auto and homeowner's policies.

Insurers usually ask for much higher rates than they get, and when they appeal the rates enforced by the state Department of Insurance in court, Long almost always wins.

"We want the companies to have adequate resources to pay the claims, but we don't want them to overcharge," Long said.

He boasts that North Carolina has the fifth-lowest auto insurance rates and the 20th-lowest homeowner's rates in the country. But Joe Stewart, executive director of the Insurance Federation of North Carolina, said those rates don't include surcharges used to fund a coverage pool for uninsured and underinsured drivers.

Insurance companies contend Long's political power puts them at a disadvantage. Handing rate-setting powers to an independent judge would be fair to both insurers and consumers, Stewart said.

"By having an independent judge preside over the hearing, it seems to make the most sense to assure in the long run the process is always fair and efficient," he said. "Currently, the rates are not adequate to provide for the risk of about 30 percent of the drivers in this state."

Long said his office was "blindsided" by the proposal and he intends to fight it. He said a judge wouldn't have the resources he has to prepare for a rate case, and he predicted that consumers would suffer in the long run.

"The expectation (is) that the homeowner insurance rates and auto insurance rates will be going up -- bottom line," he said.