Enabling auto insurance
Rep. Tom Murry, primary sponsor of House Bill 265, needs to be reminded, “If it ain’t broke ... ” The Dec. 28 edition of Insurance Journal said, “Insurance companies will try again (in 2013) to change the regulatory system in North Carolina, which enjoys some of the lowest rates in the country.”
HB 265 allows auto insurance companies to give themselves a 7 percent annual premium increase. This 7 percent increase allows a 60 percent increase in auto insurance premiums in just seven years.
The 64 auto insurers in North Carolina wouldn’t be here if they weren’t already making money. What happens when insurance companies set their own premiums?
After California passed tort reform in an attempt to stop the rise of medical malpractice premiums, the premiums increased faster than the national rate. After 13 years, California passed a law (Proposition 103) requiring insurance companies to present actuarial evidence supporting their premium rates in all lines of insurance. Insurance companies then refunded an estimated $2.5 billion to consumers, and premiums were reduced as much as 20 percent.
William H. Brooks