North Carolina’s Goodwin: Home, Auto, Health and More…

Interview with Recently Re-Elected Insurance Commissioner

Recently re-elected North Carolina Insurance Commissioner Wayne Goodwin is more focused on reform of the homeowners insurance market than he is on auto insurance. As was the case four years ago when he first assumed office, Goodwin sees the homeowners market as the biggest challenge even though the state has taken steps to improve the market since 2008.

“When I was first elected, I rightly declared that coastal insurance and homeowners insurance was a ticking time bomb, and over the last four years, we were able to, I believe, lessen the fuse or at least slow the ticking I guess of that time bomb. But what we’ve seen happen is that companies have begun to write less in North Carolina,” Goodwin said in an interview with Insurance Journal.

He said a growing number of the several hundred companies licensed to write homeowners in the state are “increasingly reluctant” to write on the coast. “So it is certainly still a big issue and I consider it, though not a ticking time bomb, but I still consider it, I would say, the number one priority for my new administration,” he said.

Goodwin, a Democrat, who was re-elected to his second term in November, has not approved a homeowners rate increase since he took office but that could soon change thanks to a reform enacted last year that gives him more leeway to approve a compromise figure. He has scheduled a June hearing on the industry’s bid for a 17.7 percent hike.

In 2009, the state also approved changes to the Beach Plan, which insures coastal properties. The reforms included limiting the coverages the plan can offer and requiring insurers to offer storm mitigation credits.

Goodwin thinks the changes have helped in the short-term but that the state needs to do more. “It stopped the exodus of companies that we feared, which we had seen happen in other states, and we saw more companies begin to seek licenses to write homeowners insurance in the state,” he said.

But now, he said, reinsurance costs are burdening insurers and the Beach Plan has started to grow again.

Auto Market

While the homeowners market is his priority, Goodwin expects he will also be talking about the auto system during his second term as some have been calling for a more competitive rating system than the current bureau approach.

While consumers appear to be happy with the auto system, the insurance industry is split even though the market is profitable. Some parties, including top writer Nationwide and other insurers with a strong foothold in the state, like the current system. Others claim the system limits consumer choice and hurts good drivers. State Farm, Allstate, Geico and Progressive are among the carriers seeking change.

Goodwin acknowledges that the current auto system is not perfect but says it’s important to focus on more than price and to not do anything to destabilize the market. He doesn’t want auto reform to crowd out consideration of further changes to the homeowners system, which he believes is where the crisis is. “I’m concerned that the opportunity to address the true crisis is maybe minimalized because of the attention to a line of business that’s very profitable here in North Carolina for the industry, and quite satisfactory, if not pleasing, to the customer,” Goodwin said.

Health Exchange

Goodwin disagrees with North Carolina Gov. Pat McCrory, who does not think the state is ready to run its own health exchange. Goodwin said the decision is up to McCrory and lawmakers but he has made it known he prefers that the state run its exchange. He believes health care providers and employers also prefer a state-based exchange “but that doesn’t always carry the day. It’s certainly a political decision that will be up to the governor and the legislature.”

Agents

Goodwin said he will continue calling on agent advisory committees in his second term. “What I’ve learned from both of these committees is what problems agents are having in the field, what they hear, what their customers are asking for, what kind of complaints they hear,” he said. “It helps to hear how sometimes agents, they’re often caught in the middle between what their company wants them to do versus what may be the right thing to do or what the public needs them to do.”

Resource Box

More podcasts from Goodwin at www.insurancejournal.tv:

• Home Insurance Improvement
• Stability in Auto Insurance
• Medical Loss Ratio, Exchanges
• Priorities, Agent Panels and Politics
• Workers’ Compensation Scofflaws

Topics Auto Agencies North Carolina Homeowners