N.C. chief blasts changes to rate-setting system

Consumers could see higher rates under legislation to eliminate the insurance commissioner’s rate approval authority that is before the North Carolina Senate, the state regulator is warning.

“The insurance rate making system proposed in this legislation is almost guaranteed to result in higher rates for North Carolina citizens,” Commissioner Jim Long said. “The system we have here in North Carolina has worked well for 50 years. Clearly this is a case of ‘if it ain’t broke, don’t fix it.'”

Long defended the current system under which his office has say over rates. “In the current system, citizens are protected in two ways: one, by having an insurance commissioner who recognizes exorbitant and unnecessary rate changes and denies rate hikes when they are not necessary; and two, by the commissioner understanding that insurance companies still must be allowed to make enough profit to remain in business,” Long maintained.

He said the current system strikes that balance fairly.

If Senate Bill 901 is approved, insurers will be able to charge consumers “whatever rates they choose while making it extremely difficult for the state insurance department to dispute these rate hikes,” according to Long.

Long said SB 901 also shifts the burden of proof to the commissioner. The commissioner will be charged with proving that a rate hike is not warranted, rather than insurers having to prove that they need higher rates.

Also, he noted, the bill allows for multiple filings in a year, which means that consumers could face several rate increases in a calendar year.