North Carolina’s insurance commissioner has postponed until October a hearing into a request by homeowners insurance companies to raise rates by an average of 25 percent statewide.
Commissioner Wayne Goodwin said the public hearing to be held in Raleigh has been rescheduled from Aug. 6 to Oct. 20 to give his staff more time to review documents and evidence.
Goodwin ordered a hearing because his staff determined the proposed rates appeared to be “excessive and unfairly discriminatory.”
Insurance companies, represented by the North Carolina Rate Bureau, requested the overall 25.3 percent statewide average increase in rates, varying by geographic territory, on Jan. 3, 2014.
At that time, Goodwin called for the insurers to withdraw the filing, saying he was “appalled” they would seek a raise so soon after an average seven percent increase went into effect in July. Insurers rejected Goodwin’s call for them to withdraw the filing.
In February, the department said it had already received more than 10,000 comments from the public on the rate proposal.
The hearing will be open to the public; however, there will not be any opportunity for the public to speak at the hearing. Experts from the industry’s Rate Bureau and experts from Goodwin’s office will present their cases for or against rate changes.
Goodwin will serve as the hearing officer and determine what, if any, rate adjustments are warranted.
The proposed rate changes range from -2.7 percent to +35 percent. Insurers have also requested revisions to the current geographic rating territories.
Insurers say they need to raise rates due to damage and claims projections.
According to Ray Evans, general manager of the North Carolina Rate Bureau the “actuarial detail” suggests premiums are “substantially inadequate” right now. “This is the reason the filing requests a change as large as it is,” he said when the filing was submitted.
Insurance department actuaries believe the requested rate increases are not justified and that the industry used old and hypothetical data to justify the increases.
Homeowners’ rates went up an average of seven percent last July, with beach houses getting the biggest increases. Insurers had requested a 17 percent hike for last year.
Prior to last year, the last homeowner’s insurance rate increase was in 2009, when insurers asked for a 19.5 percent increase but settled for four percent.
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