Action needed now in opposition to SB 901 and its House companion bill

You may recall a discussion on this topic and Sen. Rand several weeks ago. Now there is a House companion bill to SB 901.

It is urgent that you act now.

I issue a challenge to all BlueNC readers to support the resolution below ... and share it with everyone they know ... and email their State legislators their opposition to the legislation.

Please also keep me and Commissioner Jim Long updated on the responses you receive. His email address is jlong@ncdoi.net and my work email is wgoodwin@ncdoi.net.

Thank you!

Wayne Goodwin
Assistant Commissioner of Insurance
and 2004 Democratic nominee for Commissioner of Labor

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A RESOLUTION IN SUPPORT OF INSURANCE COMMISSIONER JIM LONG
AND IN OPPOSITION TO SENATE BILL 901 AND HOUSE BILL 1430

WHEREAS, the Insurance Commissioner is a constitutionally-elected officer of the State and one of the members of the Council of State;

WHEREAS, the duties of the Insurance Commissioner include, among other things, (1) the setting of maximum rates for various types of insurance sold to citizens and businesses in North Carolina, (2) prevention of unlawfully discriminatory or unreasonable or unjustifiable insurance premiums, and (3) ensuring that the market for insurance in the State remains viable so citizens and businesses may purchase insurance at a reasonable cost while allowing a fair profit for insurance companies;

WHEREAS, Insurance Commissioner Jim Long has saved much more than $4 BILLION for the consumers of this State during his time in office by preventing unjustified insurance premium increases from going into effect;

WHEREAS, North Carolina has the 5th lowest automobile liability insurance premiums in the United States of America, bested only by several small states, and the 20th lowest homeowners' insurance premiums in the nation;

WHEREAS, Insurance Commissioner Jim Long declares that the system is not broken and, even if it needs correction, certainly does not justify giving insurance companies everything they demand, something which Senate Bill 901 and House Bill 1430 would do;

WHEREAS, legislation has been filed this year in the North Carolina General Assembly that would dramatically change the role of the Insurance Commissioner and provide insurance companies with an automatic right to increase their rates with a lessened ability of the Insurance Commissioner to protect the public;

WHEREAS, if insurance companies had had the benefit of their proposed changes to the law in 2006 then North Carolina's coastal homeowners would have suffered a 125% increase in their homeowners' insurance premiums and other parts of the State would have experienced increases of more than 50% in one year alone.

WHEREAS, the proposed legislation also reduces the amount of the refunds to which consumers are entitled if insurance companies are found to have charged unlawful, excessive or unjustifiable premium rates.

BE IT THEREFORE RESOLVED that this county convention hereby calls for the defeat of Senate Bill 901 and House Bill 1430 in that these bills, if passed in their current form, would eliminate North Carolina's Commissioner of Insurance from the rate-setting authority (which are presently subject to legal challenges by the insurance industry), and would allow insurance companies writing insurance policies for automobile, homeowners, and workers' compensation to automatically allow increases in insurance rates (making them subject to legal challenges by the Insurance Commissioner).

FURTHERMORE, BE IT RESOLVED that this county convention firmly believes that shifting the burden of proof from the insurance industry to the Commissioner of Insurance is a dramatic change in the law that will enable insurance carriers to charge basically whatever they want, and that this shifting of the burden of proof will also put the costs of legal challenges on the State - that is, the taxpayers - rather than on insurance companies.

MOREOVER, BE IT RESOLVED that this legislation, if passed, would sharply restrict the ability of the Insurance Commissioner to protect the State's consumers and small businesses, disrupting a rate-setting system that has worked well for decades.

AND, BE IT FINALLY RESOLVED that this county convention expresses its opposition to Senate Bill 901 and House Bill 1430 and strongly encourages its legislative delegation to do all in its power to oppose and defeat this legislation or any other legislation like it - this session and in any future session. This legislation does nothing except guarantee insurance premium increases for most consumers and small businesses, and strip the Insurance Commissioner of his authority.

This the 21st day of April, 2007.

Comments

Thanks Wayne

This is completely ridiculous.

Robin Hayes lied. Nobody died, but thousands of folks lost their jobs.



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Vote Democratic! The ass you save may be your own.

industry profits

This legislation is a perfect example of both the insidiousness and arrogance of big business today.

Wayne has done a good job of setting the record straight on the efforts of Jim Long to maintain a balanced and healthy insurance market in North Carolina. The results speak for themselves. The industry makes a profit and the public is protected from abuse.

As reported in the N&O:

Under the measure, sponsored by Senate Majority Leader Tony Rand at the urging of the insurance industry, a Superior Court judge would rule on rate disputes after conducting a hearing. Currently, the insurance commissioner presides over such hearings and determines the maximum rates that insurers can charge.

Joe Stewart, executive director of the Insurance Federation of North Carolina, which represents property and casualty insurers, argued that, as an elected official, the insurance commissioner is destined to be an "advocate for the consumer."

It ain’t as though the industry is lacking in influence or being taken unfair advantage of in the marketplace. The last 3 years have produced record profits for them as reported in insurancenewsnet.com.

“Profits and a solid insurance industry are a good thing but unjustified profits and excessive capitalization harm consumers,” said J. Robert Hunter, the Director of Insurance for the Consumer Federation of America (CFA) and author of the study. Hunter is an actuary, former state insurance commissioner and former federal insurance administrator.

“We saw record profits in 2004 and 2005 despite significant hurricane activity. Profits in 2006 rose to unprecedented heights, with pre-tax profits likely to increase by over $30 billion for property/casualty insurers, a jump from the previous record of more than $100 for every man woman and child in America. Meanwhile, the amount that insurers paid in claims and expenses as a percentage of the premium collected in 2006 plummeted to a 50-year low,” he said.

Property casualty industry profits since 2003:
2003 $ 31 billion
2004 $ 41 billion
2005 $ 49 billion
2006 $ 60 billion+

I urge you to read the whole insurancenewsnet.com article. Big energy and big pharma are not the only barracudas in the marketplace today.

One last observation. Again, from the N&O article:

Rand said he doesn't have a beef with Long's decisions. "I'm not critical of anything that has gone before," he said. "I think this is just a better way to do it from now on."

Instead of fixing something that’s not broken why don’t we use this model to give the commissioner of insurance the same regulatory influence over health insurance that he has over auto insurance. Set up a rate bureau, a reinsurance mechanism, and invite the health insurers to justify their rates to Jim Long.

Bump

Because it's Monday.