Local Politics

Proposal Could Spark Insurance Rate Increases

Posted March 30, 2007

— A bill under consideration by the state Senate could lead to higher insurance rates for North Carolina residents, Insurance Commissioner Jim Long said Friday.

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.


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  • 68_polara Apr 4, 2007

    And now for the flogging to commence.

  • 68_polara Apr 4, 2007

    This has absolutely nothing to do with the sales tax increase on new cars, nothing. Unfortunately this may actually make sense. The problem now is that the insurance commissioner is an elected official. Being an elected office, they must tend to side with the electorate in order to maintain their office. This prevents them from being objective. Like it or not, and I don't, this is unfair to the insurance companies. If this passes rates would almost surely increase. But, the question is what is right versus wrong. Problems like this help illustrate the difference between a republic and a democracy.

  • Lone Voice in the Wilderness Apr 4, 2007

    Since when has the insurance company ever done anything that benefits the consumer? This proposal is just a way for the insurance companies to jack up their prices so they can continue to pay their CEO's the ridiculously high salaries.

    For shame.

  • shm Apr 3, 2007

    This goes right along with the proposal for increase in sales tax for auto dealers. Tax increase here, rate hike proposal there. They won't be satisfied until they get every penny you make. It makes me sick, and not very proud to be living in NC and I have bee here for 48 yrs.

  • ProgFan Apr 3, 2007

    Good deal, WRAL, you didn't even mention that it's Fat Tony Rand, one of their favorite politicians, who's sponsoring this legislation to rip off the rate payers of this state. Wonder how much Fat Tony got in "contributions" from State Farm and Nationwide(they're on our side, you know).

  • Greg1968 Apr 2, 2007

    Sorry you guys, but I bet it's a done deal. That proposal was probably sent to the table LAST YEAR, and it's probably already in the approval stage. Insurance companies practice fraud and they should be investigated by the FBI. They are ruthless, legal thieves. Their CEOs take local politicians out to expensive restaurants, they have drinks, eat expensive food, and come up with deals to get their proposals heard. They are no different than drug dealers or the mobsters before alcohol was legalized.

    Yes, NC may have lower rates than some other states but NC also has the lower salaries.

  • Watcher Of Things Apr 2, 2007


    Got to love legalized extortion and racketeering!

    Thank You Government


  • hdsoftail Apr 2, 2007


  • hdsoftail Apr 2, 2007

    Just hope you dont have STATE FARM. I paid high prem. for years, then when I have a leak in the wall they dont pay. They call it a long term leak. BEWARE!!!! all you state farm people. Switch to someone else before they get you.

  • Blessed Apr 2, 2007

    I am telling everyone right now, tell your friends and family to e-mail or write their Reps and Senators and stop this proposal in it's tracks. It's high time our "elected" officials stepped up and voted the way we would, not the way the lobbyist pay them to...Insurance companies already make a hugh profit and their CEO's walk away with millions each year in "salary and bonuses", that we foot the bill for.