North Carolina: Group Moves Modernization Agenda Forward

The Insurance Federation of North Carolina has reached the first of many important milestones on the road to regulation modernization. Senate Bills 900 and 901, drafted by the IFNC and sponsored by Democratic Sen. Tony Rand, have been referred to the Committee on Commerce, Small Business, and Entrepreneurship.

Senate Bill 900 would require the disclosure of recoupment surcharge on automobile insurance policies. Proposed disclosure language reads: "'Recoupment' is an additional charge on your automobile liability insurance to subsidize losses in the North Carolina Reinsurance Facility as required by law."

"Disclosing the recoupment surcharge is the first step toward helping consumers understand that North Carolina's system unfairly requires less risky drivers to help pay for more risky drivers," says NAMIC Southeast State Affairs Manager Liz Reynolds. "Consumers who 'get it' will demand a rate filing process that allows companies to more accurately match rate to risk."

Senate Bill 901 would revise the automobile liability insurance rate filing review process to include the use of a special judge for rate filing cases. North Carolina is one of the few states left that requires all insurance companies to operate through a statutorily created rate bureau. In addition, the current system creates a conflict of interest for the insurance commissioner, requiring him to serve as advocate, judge, and jury during rate filing proceedings.

"If SB 901 passes as drafted, North Carolina would join the ranks of more competitive, market-driven states for the benefits of insurance customers and companies,” notes Reynolds. "However, as expected, Commissioner Jim Long is vehemently opposed to the proposed changes and is charging that insurers are pushing the bill so they can charge higher rates."

The IFNC is NAMIC's lobbying and public affairs partner in that state. NAMIC’s Reynolds has been participating in bill draft discussions as well as meeting with the IFNC public affairs committee to develop a communications strategy to support modernization efforts.

Direct questions to NAMIC State Affairs Manager Liz Reynolds.

Posted: Tuesday, April 03, 2007 12:00:00 AM. Modified: Tuesday, April 24, 2007 9:15:13 AM.

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We are 1,400 property/casualty insurance companies serving more than 135 million auto, home and business policyholders, with more than $196 billion in premiums accounting for 50 percent of the automobile/homeowners market and 31 percent of the business insurance market. We are the largest and most diverse property/casualty trade association in the country, with regional and local mutual insurance companies on main streets across America joining many of the country’s largest national insurers who also call NAMIC their home. More than 200,000 people are employed by NAMIC members.