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Amendment to NC auto insurance bill rekindles industry feud

The internal feud among North Carolina’s insurance carriers over the way the state regulates auto insurance rates continues to bubble up in the halls and back rooms of the state legislature.

FAIR NC, a coalition of insurance companies that this spring failed to win passage of a bill that would have remade the state’s regulatory system, hasn’t given up the fight.

Now the coalition, which includes such companies as State Farm, Allstate and Geico, is seeking to amend a heretofore noncontroversial auto insurance bill that was unanimously approved by the Senate in April.

SB 180 would make it easier for individual auto insurers to offer special discount programs to North Carolina motorists.

The proposed amendment to the bill, which is now before the House Commerce Committee, has drawn cries of protest from Nationwide Insurance – which led a second group of insurers opposed to FAIR NC’s bill – and Insurance Commissioner Wayne Goodwin.

In addition to opposing the proposal itself, Nationwide and Goodwin are complaining that FAIR NC is distributing information to legislators that characterizes the proposal as a “compromise” that “includes proposals supported by the Insurance Commissioner and Nationwide.”

“I’m at best puzzled,” Goodwin said. “I’m at worst angry in that the proposed amendment purports to be a compromise that I signed off on.”

Susan Valauri, a lobbyist for Nationwide, complained in a letter to members of the House Commerce Committee: “To suggest their amendment is a ‘compromise’ implies negotiation between parties. That has not occurred. It is also incorrect to assert that Nationwide supports proposals in the amendment.”

Goodwin called the proposed amendment “another attempt by out-of-state companies to change the system for their own benefit.”

The proposal that he has seen, Goodwin said, is even worse than the bill that FAIR NC backed this spring.

Both measures called for permitting individual insurance companies to opt out of the current system in which the state-created N.C. Rate Bureau submits an overall rate request for all insurers that needs the insurance commissioner’s approval.

The former bill enabled companies to pretty much set their own rates as long as the aggregated annual increase was less than 12 percent.

But the new amendment would enable insurers to obtain “unlimited increases as often as they want” that the insurance commissioner would be powerless to stop, Goodwin said.

Under the proposal, he continued, insurers would be able to use national data, rather than North Carolina-specific data, to justify their rate hikes. That would in effect guarantee that he couldn’t prove the rate hike was excessive and overturn it, Goodwin said.

“North Carolina has the lowest rates in the Southeast,” Goodwin said. “National data would most certainly drive rates up.”

The coalition led by Nationwide also argues that the amendment would “cripple” the commissioner’s ability to control rates.

Bob Rosser, a spokesman for FAIR NC, insisted that nothing in the amendment would undercut Goodwin’s authority to regulate rates.

“There is no chance of rates going down or up without his approving them,” Rosser said.

Rosser also said that the proposal was designed to placate critics of the legislation that the House rejected in the spring.

“They had a position and we had a position and we see this as a compromise,” he said.

Ranii: 919-829-4877
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