N.C. Commissioner on Rate-Setting System: ‘It Ain’t Broke, Don’t Fix It’

Insurance consumers could see higher rates under legislation to eliminate the insurance commissioner’s authority to set rates that is before the North Carolina Senate, the state regulator is warning.

“The insurance rate making system proposed in this legislation is almost guaranteed to result in higher rates for North Carolina citizens,” Commissioner Jim Long said. “The system we have here in North Carolina has worked well for 50 years. Clearly this is a case of ‘if it ain’t broke, don’t fix it.'”

Long defended the current system under which his officie has say over what rates are approved.

“In the current system, citizens are protected in two ways: one, by having an insurance commissioner who recognizes exorbitant and unnecessary rate changes and denies rate hikes when they are not necessary; and two, by the commissioner understanding that insurance companies still must be allowed to make enough profit to remain in business.”

He said his job is to balance these interests.

“It is important for consumers to have affordable rates and also to have plenty of stable and competitive companies to choose from. The current system strikes that balance fairly. Why change a system that works well for consumers and the companies?”

If Senate Bill 901 is approved, insurance companies in North Carolina will be able to charge consumers “whatever rates they choose while making it extremely difficult for the state insurance department to dispute these rate hikes,” according to Long.

Long said SB 901 also shifts the burden of proof to the commissioner, which he said is contrary to all other judicial protocol. The commissioner will be charged with proving that a rate hike is not warranted, rather than insurers having to prove that they need higher rates.

Senate Bill 901 allows for multiple filings in a year, which means that consumers could face several rate increases in a calendar year.

Source: www.ncdoi.com

Topics North Carolina