Department of Insurance Rate Increase Rejection Upheld

Department of Insurance Rate Increase Rejection Upheld

By / State News / الأربعاء, 03 آب/أغسطس 2016 04:00

RALEIGH, N.C. : August 2nd, 2016 - The North Carolina Court of Appeals today handed down a decision affirming the North Carolina Department of Insurance’s rejection of a 2014 homeowner’s insurance rate increase sought by the insurance industry.
The court’s decision ends a two and a half year process that began in January 2014 when the insurance industry requested a 25.6% increase in homeowner’s insurance rates across the state. That request was rejected by the department and a hearing was held on the filing later that year. In December 2014, Commissioner Goodwin ruled that the industry’s proposed rate increase was unsubstantiated by presented facts and ordered that no increase be awarded. That ruling was appealed by the industry to the North Carolina Court of Appeals, who presented their decision upholding Commissioner Goodwin’s ruling today.
“This represents a victory for all consumers in North Carolina,” said Insurance Commissioner Wayne Goodwin. “I rejected the insurance industry’s proposed rate increase because I felt it was unjust and I am very pleased that the Court agreed with my ruling.  This action will save homeowners hundreds of millions of dollars in insurance premiums.”
The Court concluded their decision with “Upon a full review of the Commissioner’s order, we hold the order reflects a careful, thoughtful, and thorough consideration of the evidence. The evidence in the record supports the Commissioner’s critical findings and ultimate conclusions. This Court will not second guess the Commissioner’s determinations as to the credibility of the witnesses or the weight to be given their testimony. Therefore, the order of the Commissioner is affirmed.”
A full copy of the Court’s ruling can be found here: https://appellate.nccourts.org/opinions/?c=2&pdf=33549
According to a release from Goodwin's office in December 2014, "The ordered rates vary by geographic territory and type of insurance. On average, homeowners insurance rates are to decrease by 0.3 percent, renter's insurance rates are to  increase by 11.2 percent, and condo owner's insurance rates are to increase by 8.1 percent."
The decision comes after Goodwin held a hearing to examine the insurance companies' request to raise overall average rates by 25.6 percent.
The insurance companies, represented by the North Carolina Rate Bureau, requested an overall statewide average increase of 25.3 percent for homeowners insurance rates, varying by geographic territory, on January 3, 2014. Insurance Commissioner Wayne Goodwin ordered that a hearing be held in the matter because the proposed rates appear to the Department of Insurance to be excessive and unfairly discriminatory.
Goodwin issued the following statement in January 2015: "New homeowners insurance rates went into effect in July 2013. I am appalled that the insurance companies would request another increase just six months later. I believe the insurance companies should withdraw this rate filing immediately. If they do not, the insurance companies should expect a full hearing on this matter; I will not entertain any settlement negotiations. I urge North Carolina homeowners to take advantage of the public comment period and let their insurance companies know what they think about the notion of another homeowners insurance rate increase. Also, I take offense at the insurance companies' concerted efforts to file this request late on a Friday afternoon, when they think the public won't be paying attention."
After an initial review of the January 2014 filing and more than 10,000 comments submitted by the public, NCDOI experts believed the requested rate increases were not justified. Among NCDOI's initial concerns were:
• The filing uses hypothetical data, rather than actual data, when calculating costs including those for the net costs of reinsurance and trended modeled hurricane loss costs.
• The filing lacks necessary data, documentation and explanations to meet statutory burden of proof for rate increases.
• Old data is used in the filing when more when more recent data should be available and included in the analysis.
• A public comment period on the rate filing was held from Jan.3 through Jan. 31 to engage the public in the ratemaking process.
During that period, the Department of Insurance received more than 10,000 emailed or mailed comments, and approximately 25 people made comments in-person during a public comment session held on Jan. 24.
This decision follows a decision in early 2013 when Goodwin reached a settlement agreement with the NC Rate Bureau on the Homeowners Insurance Rate Filing that was submitted in October 2012. A public comment period was held on the filing shortly thereafter and over 9,000 comments were submitted. The NC Department of Insurance, upon reviewing of the filing and consideration of the comments, issued a Notice of Hearing on the filing to begin June 3, 2013.
The Hearing would have been the first on a Homeowners Insurance Rate Filing since 1993 and would have given NCDOI the opportunity to further scrutinize the filing through testimony and evidence submitted by the NC Rate Bureau. Ultimately the June hearing was never held and instead Commissioner Goodwin approved an agreement.
The NC Rate Bureau's filing in 2013 represented a 30% rate increase for eighteen NC coastal counties. Based on filing data however, indicated rates - those the Rate Bureau concluded were the actuarial sound rates needed - were as high as 119% more than current rates.
The NC Rate Bureau capped the increase request at 30%. That settlement agreement represented an overall statewide increase of 7% with the largest increases impacting coastal counties.
The beach areas of the coast experienced  increases as of July 1, 2013 as high as 20%; inland coastal areas received much lower increases.
While the overall statewide average increase was 7 percent, it was much higher for coastal counties with the highest increase of 19.8% in New Hanover, Brunswick, Carteret, Onslow and Pender counties in areas nearest to the ocean.
Areas within those counties farther inland got an increase up to 8.6%.

Author

Super User

Super User

Carolina Beach North Carolina

Partly cloudy
62°F
ENE at 15 mph /73%
Monday
57°F / 68°F
Tuesday
51°F / 66°F
Wednesday
42°F / 57°F

 

Please publish modules in offcanvas position.