N.C. Legislature Considers Bill That Could Lead to Increases in Insurance Rates

Sheila Chavis

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Senator Tony Rand of Cumberland County recently and quietly introduced a bill that has sparked significant controversy among those who fight for consumers. SB901 would take the insurance rate setting power away from the NC Commissioner of Insurance and give the ultimate authority to a Superior Court judge. Many are projecting that if this bill passes, then North Carolina will see dramatic increases in its insurance rates, and this in turn could have a significant impact on the number of uninsured and underinsured drivers and employers in this state.

Jim Long has been the Insurance Commissioner for 22 years. It is anticipated that, without the Insurance Commissioner in place to balance the interests of the insurance industry against the interests of consumers, insurance rates will go up disproportionately in favor of the insurance industry and the citizens and businesses of NC will end up paying more for less coverage.

This bill would affect the rate setting powers for all types of insurance including, motor vehicle, workers' compensation and homeowners' insurance. Currently, North Carolina has some of the lowest insurance rates in the country, yet, it is estimated by a Nationwide Insurance study that more than 7% of drivers on the road have no insurance on their vehicles. Increased premiums would obviously lead more drivers to choose to lower their coverage or even go completely uninsured. Obviously, higher workers' compensation premiums would increase the cost of doing business for small businesses, and might encourage more employers to try to avoid paying for coverage, or in the alternative, to try and recoup the costs from the injured workers by lowering benefits.