The state Senate's insurance committee this morning heard a presentation on two competing bills that would signficiantly rewrite the auto insurance laws in North Carolina, including limiting the insurance commissioner's ability to regulate premiums. It's a complicated issue with different insurance industry interests lining up behind different bills.
So, the committee voted to send the matter to a study committee to work through the details. Insurance Commissioner Wayne Goodwin opposes both bills, pointing out the state's low insurance rates as indication that the system doesn't need fixing. He called the proposals "the most dramatic change (to the auto insurance structure) in 35 years."
The bills would also phase out a surcharge that insured motorists pay to subsidize liability coverage for some drivers. The surcharge is currently 4.2 percent.
Sen. Bob Rucho, a Republican from Mecklenburg County, acknowledged it's a complex issue that deserved a closer look. "Not to look at reform and modernization would be wrong," he said.
This evening, one of the insurance companies, Nationwide, issued a statement praising the senators for studying the bills more closely. Nationwide opposes one of the bills, SB 490 sponsored by Rucho, which would bypass Goodwin and allow companies to raise their own rates substantially.
Nationwide’s statement: “We agree that lawmakers should carefully consider the impacts on consumers and the possible unintended consequences of dismantling North Carolina’s robust, competitive, stable, and low-cost auto insurance system, which Senate Bill 490 threatens to do. There is no good reason to abolish the current system, and plenty of reasons not to.”
Comments
Got to waive the bs flag
April 28, 2011 - 7:01pm — Oldgoat420It's just not true that my subsidy is keeping the highest risk drivers from dropping insurance -the highest risk drivers already pay their own way without the subsidy. And the uninsured rates in NC aren't any better than other states, so the subsidy isn't working for that. Truth is, the subsidy is there just to let insurance companies get off the hook for drivers they don't want to insure. If the subsidy is such a good deal, why keep it a secret?
And our rates aren't that good - if this system was working the way you claim, we'd have the lowest rates in the country. If it's so good, why doesn't anyone else want to do it this way? And while you were busy checking out donations to politicians, what did you find out about donations to the Commissioner???
By the way, did you ever take a course in economics? If so, did you learn anything? Government price fixing is only good when there's a monopoly and insurance sure isn't a monopoly! Competition works way better than the government. If government price fixing works so well, why doesn't the government set the prices of cars, gas, food, and everything else? Government price fixing for insurance is there to protect the insurance companies profits, and protect the Commissioner and bureaucracy from having to earn a living like the rest of us.
The fact that NC has the 7th
April 28, 2011 - 9:27am — WNCMikeThe fact that NC has the 7th or 8th lowest rate does show that they system, even with its flaws, works. The ones lower than us are all predominantly rural states. The reason you subsidize high risk drivers is to make insurance affordable for them which greatly reduces the amount of uninsured motorists you have. Sure its not perfect, but statistics state that the (4.0% now but will probably drop by the summer) surcharge allows NC drivers to have one of the lowest number of uninsured drivers in the country as well....thus allowing our collision rates to impacted favorably. The system insures profit yes, but this is done through insuring the market is available (we now have over 170 companies) and with all the companies able to get in, the open market competition takes hold. The commissioner now has to approve all rates and the new law would allow companies to up rates up to %15 without any approval. The rate bureau should go and those individual responsibilities shoud be given back to the dept. of insurance so that there is an even wider variety of products available. That could use some tweaking, I agree. Giving the commissioner no power over rates is just plain letting the fox guard the hen house.
As for Rucho, bpuli9999, a fast look at the state board of elections web site shows he receives regular contributions from BC&BS, Allstate, Met Life, Liberty Mutual, Nationwide, and NC Farm Bureau...and I didn't even go very far back.
Well of course Nationwide opposes change
April 28, 2011 - 8:57am — Oldgoat420The system is designed to guarantee insurance companies make a profit, not to guarantee that rates are fair or low. Can someone explain why it's such a good deal for me to pay extra to subsidize high risk drivers?
And you want to look at where politicians get their support? Might want to start with the Commissioner and see how much he gets from insurance companies, agents, bailbondsmen, and all the different groups he regulates. Of course he doesn't want to give up control - makes it harder to put the squeeze on those folks. If you doubt it, do a little research. Look at the Commissioner's fund raising squeeze just before the start of this year's legislature.
Is there a way to find out...
April 28, 2011 - 7:21am — bpuli9999how much these politicians received from insurance companies and their various different lobby groups? Maybe they should start wearing their sponsors logos on their clothes - just like race car drivers. That would easily let us common people know who they are actually working for.