For Immediate Release: February 21, 2011

Goodwin Calls for Public Hearing on Dwelling Property Rate Request

Department of Insurance's initial review of the filing raises concerns that the requested rate increase is not justified

Goodwin Calls for Public Hearing on Dwelling Property Rate Request

RALEIGH -- Insurance Commissioner Wayne Goodwin today signed a notice of hearing in the dwelling fire and extended coverage rate case, in which the North Carolina Rate Bureau -- the independent organization that represents all North Carolina property insurance companies -- requested an overall statewide average increase of 20.9 percent for dwelling property policies. The public hearing is scheduled to begin on June 21, 2011.

Commissioner Goodwin will serve as hearing officer but will withhold any comment on the filing, as he is required by law to remain unbiased. During the hearing, Commissioner Goodwin will hear from experts from the Department of Insurance and the Rate Bureau and decide what rate change, if any, is warranted.*

The Department of Insurance's role is to represent the interests of the public. DOI has retained independent, experienced experts who will testify during the hearing. After initial review of the filing, Department experts believe the requested rate increase is not justified based on the data submitted. The following concerns, among others, may be raised at the hearing:

After the Department of Insurance received the filing on Jan. 4, Commissioner Goodwin ordered a public comment period from Jan. 4-31 as a way to increase transparency and engage the general public in the ratemaking process. Staff from the Department of Insurance and the Rate Bureau had access to all comments received in the allotted time period. However, due to his statutory obligation to remain impartial as the hearing officer, Commissioner Goodwin is not allowed to personally receive public comments and, therefore, could not attend the public comment session held Jan. 24.

Dwelling fire policies are different from traditional homeowners insurance policies in that they offer fewer coverage options and are sold to properties that would not qualify for a standard homeowners policy. Dwelling fire policies are offered to non-owner occupied residences including rental properties, investment properties and other properties that are not occupied full-time by the property owner. A dwelling fire policy does not typically include liability coverage; extended coverages would generally include coverage for damage to the physical dwelling due to wind, hail, fire, smoke, riot, civil commotion, and aircraft and vehicle damage.

The filing is available for public review by going to the Department's Web site and entering the Serff Tracking Number

*If the Rate Bureau wishes to appeal his decision, it can do so through the court system, and companies can raise rates while awaiting an appeals decision. The difference in the ordered rate and the implemented rate must be held in escrow. If the Rate Bureau loses its appeal, the escrowed money must be refunded to policyholders who paid too much.