DOI News

For Immediate Release: Contact:
March 30, 2009 Kristin Milam
Johanna Royo
919-807-6011
 
Department of Insurance Says Proposed Auto Rate Hike Unwarranted
Insurance Commissioner Goodwin Sets Auto Rate Hearing for August
 
RALEIGH -- - Officials at the Department of Insurance today released a notice of hearing in the 2009 auto insurance rate case, in which the insurance industry requested a 1.4 percent average statewide increase in auto rates. Signed by Commissioner Wayne Goodwin this morning, the notice reflects a hearing beginning Aug. 3, at 10:00 a.m. at the Department's downtown Raleigh offices.
 
The 2009 rate filing was submitted on Jan. 30 by the North Carolina Rate Bureau, an independent organization representing all auto insurance companies doing business in the state. Since then, Department experts have reviewed the filing thoroughly and determined that a rate increase is not justified based on the data submitted. The 1.4 percent increase request is based on the interim 9.4 percent rate increase being charged by the industry during their appeal of the 2008 auto rate order. The filing also includes data from the reinsurance facility, which Department experts believe shouldn't be included because the facility files separate rate requests with its own data. Department officials believe its inclusion is essentially "double-dipping" to heighten the need for rate increases.
 
"This year's request comes not long after the Rate Bureau's decision to appeal the 2008 auto rate order," said Sherri Hubbard, the Department's lead rate attorney. "Last year, former Commissioner Jim Long ordered a 16.1 percent decrease, which the industry is currently appealing through the court system. We don't think an increase is warranted at this time, and we have some serious questions once again about the data included in the filing."
 
During the hearing, Commissioner Goodwin will listen to testimony from experts on both sides of the issue and decide what rate change, if any, is warranted. If the Bureau wishes to appeal his decision, it can do so through the court system, and companies can raise rates while awaiting a decision from the courts. The difference in the ordered rate and the implemented rate must be held in escrow. If the Bureau loses its appeal, the escrowed money must be refunded to policyholders who paid too much.
 
-- NCDOI --