N.C. Commissioner Orders Hearing on 2004 Auto Rate Filing

February 25, 2004

North Carolina Insurance Commissioner Jim Long has ordered a hearing to discuss the insurance industry’s latest request for an increase in auto insurance rates.

Long will preside over the hearing, called for July 26 and expected to continue for four to five weeks, at which time he will hear evidence and testimony concerning the 12.3 percent increase requested by the North Carolina Rate Bureau. The Rate Bureau represents all auto insurance companies in the state.

As the hearing officer, Long must remain unbiased and is therefore unable to comment on the Rate Bureau’s proposal. But in the notice of hearing prepared by Department of Insurance rate attorneys, the Bureau’s rate filing is criticized for failing to “comply with and [being] inconsistent with prior orders of the Commissioner and recent decisions by the appellate courts.” The notice goes on to say that the data contained in the filing “are so questionable” the Department is unable to determine whether it complies with the law, and that a “noticeable pattern of bias in the selection and use of data and methodologies … appears to produce rates that are excessive and unfairly discriminatory.”

The proposed 12.3 percent increase, if implemented, could cost North Carolina drivers an estimated $367 million in potential premiums. In Long’s 19 years in office, however, he has repeatedly negotiated lower auto rates; in fact, he has reportedly saved citizens an estimated $3.2 billion in potential premiums.

North Carolina currently has the ninth lowest auto insurance rates in the nation.

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