North Carolina Insurance Commissioner Jim Long has signed a regulation reducing private passenger auto insurance rates by 2.9 percent effective Nov. 15.
An insurance industry trade group immediately expressed displeasure with the move.
“The commissioner's action continues to put pressure on auto insurers in North Carolina in terms of them trying to manage their risks and achieve a reasonable return on their investment there,” NAMIC senior state affairs manager David Reddick said. “It is unfortunate that rates are controlled by a single elected official.”
In February, the North Carolina Rate Bureau filed a request for a 7.4 percent increase, but the Department of Insurance denied the request and began negotiating with the bureau for the rate decrease.
Bureau executive director Ray Evans said that a hearing had been set for June 5, but with the agreement reached between the industry and the commissioner it has now been canceled.
Mr. Evans said that North Carolina remains one of the last bureau states for personal lines rate approvals, while most states have a similar system for workers' compensation.
But, while the industry may be clamoring for a more open system that would not only allow more rate freedom but also more leeway in the area of increased classifications, Mr. Evans does not see that happening in the near future.
“You have the commissioner saying this is the state with the fifth or sixth lowest insurance rates in the nation and a pretty low residual market, so there is a general feeling that 'if it ain't broke, don't fix it,'” he said.
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