New state insurance commissioner, same old result.
The Department of Insurance, which since the outset of the year has been led by new Commissioner Mike Causey, announced Friday that it has denied auto insurers’ request for an average increase of 13.8 percent in auto insurance rates. Causey, a Republican, defeated the incumbent commissioner, Wayne Goodwin, in the November election.
The rejection of the rate hike, which was filed on Feb. 1 by the N.C. Rate Bureau, which represents insurers, follows the pattern that prevailed under the two previous insurance commissioners – Goodwin and Jim Long, both Democrats.
“It’s not unexpected,” said Ray Evans, general manager of the Rate Bureau.
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But, he added, the Rate Bureau remains convinced that a rate increase is justified given the industry’s experience in recent years.
When the organization filed its rate hike request, Evans noted that the state’s insurers have been hit with increased claims – both in number and severity. Low gasoline costs and a solid economy have spurred motorists to drive more, he said at the time, and crashes stemming from distracted driving and alcohol rose considerably in 2015.
Auto insurance rates last rose in North Carolina in 2001 and 2002, but those hikes were erased by a rate decrease in 2003.
The next step in the rate-setting process is a hearing during which experts from the Rate Bureau and state regulators will each get to present their case. The first day of the hearing is scheduled for Sept. 11.
In the meantime, Evans said, negotiations will be held to see if a settlement can be reached.
When Goodwin and Long were commissioners, they left the initial review and ruling on the Rate Bureau’s requests to their staff and then presided themselves over the hearing.
But Causey has taken a different approach. Department spokesman Colin Day said the commissioner took an active role in the review and the decision, but the hearing will be presided over by the department’s general counsel, John Hoomany.