Insurance rate request labeled 'excessive' by NC regulators
02/19/2014 4:59 PM
02/20/2014 5:06 AM
State Department of Insurance experts have concluded that the industry’s request for a statewide average increase of 25.3 percent on homeowners insurance rates isn’t justified, setting the stage for a hearing that gives both sides an opportunity to present their case.
The industry’s proposed rates appear to be “excessive and unfairly discriminatory,” the Insurance Department said in Wednesday’s announcement.
The hearing, which will be presided over by Insurance Commissioner Wayne Goodwin, has been scheduled for Aug. 6. After the hearing, Goodwin will determine the rate he considers appropriate; the industry has the option of appealing his decision to the courts.
Goodwin has already gone on record opposing the industry’s proposal. Last month, on the day the request was filed, he blasted the industry and urged it to withdraw its request immediately.
The request was filed by the N.C. Rate Bureau, which represents insurers.
Susan Taylor, the bureau’s director of insurance operations, said the bureau is still studying the 16-page notice it received from the Insurance Department documenting the reasons for scheduling a hearing.
“We still feel strongly we need the rates as specified in the filing,” Taylor said.
The requested increase averages 25.3 percent statewide but varies by region, from a decrease of 2.7 percent to as much as 35 percent along the coast.
The industry is asking for a 24.4 percent increase in the cities of Raleigh and Durham; and a 32.1 percent increase in the rest of Wake and Durham counties as well as in Chatham and Orange counties.
The Insurance Department’s hearing announcement said the industry’s filing lacks the necessary data and explanations needed to justify the rate increases and also used “old data” when more recent data should have been included. The department also said the filing “uses hypothetical data, rather than actual data, when calculating costs,” including the costs of reinsurance and computer-modeled hurricane losses.
More than 10,000 comments on the rate request have been submitted in writing to the department. A parade of about two dozen people — including about a dozen elected and appointed officials from the coast — condemned the request at a public hearing in Raleigh last month.
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