Despite Some Bumps, North Carolina P/C Market Remains Strong

North Carolina Insurance Commissioner Jim Long recently set aside some time to talk with Insurance Journal Southeast regarding some of the issues impacting the state.

A native of Burlington, N.C., Long was first elected to his current statewide post in 1984, and re-elected in 1988, 1992, 1996 and 2000.

He is now the senior member of the Council of State, made up of the 10 statewide elected officials. As insurance commissioner, Long also serves as state fire marshal. He chairs the NC Manufactured Housing Board, the Arson Awareness Council and serves as a member of numerous commissions and boards. Long is the past president and vice president of the National Association of Insurance Commissioners (NAIC).

Insurance Journal: How would you describe the current property/casualty market for independent agents in North Carolina?

Jim Long: The property and casualty market in North Carolina remains strong, despite some ups and downs in various lines of business over the last few years. We continue to see an influx of companies wanting to write business here and we are pleased at the choices consumers still have. The auto market is particularly strong, with healthy, stable companies offering rates that are currently the ninth lowest in the nation. And while homeowners companies have had to make some hard choices lately about who to insure, the market continues to grow. Part of this is due to our strong regulatory system, where companies are represented by a rate bureau that negotiates on their behalf.

IJ: Do you consider the state friendly towards both current insurers in the state and in attracting new insurers to North Carolina?

Long: Absolutely. We continue to see new companies requesting licenses to do business in our state, and we lose very few. As of the first of this year, 772 property and casualty companies were licensed in North Carolina. That is up by 11 since this time in 2003.

IJ: Talk a little bit about the problem of unauthorized insurers and what the department has done to address the issue.

Long: This has been a growing problem in North Carolina, unfortunately, and we are trying to take a proactive approach to solving it. We’ve seen an increase in fraudulent companies from all lines of business offering bogus policies to unsuspecting buyers. These companies are not licensed and in most cases do not have the proper financial backing to support their policies. In some cases, agents are even being suckered into selling these fraudulent policies. Millions of dollars in unpaid claims have been left to the victims of these scams.

Last year I created an unauthorized entities unit here at the department to investigate any suspicious company marketing policies. So far we have 51 open cases and we’ve uncovered at least eight companies doing business illegally; we’ve issued cease and desist orders to all of them. We continue to investigate this problem, but we also try to educate consumers and agents alike about the dangers of deals that sound too good to be true. One phone call to my department is all it takes to find out if the company is properly licensed. That is the message we’re trying to get out so there are no more victims.

IJ: As one of the few “rate bureau” states for property and casualty lines, how has that worked in North Carolina and what are you expecting from the new auto rate filing coming out?

Long: In my 19 years as insurance commissioner, I’ve been very pleased with the way my department works with the rate bureau. I truly believe it has allowed us to keep rates low for consumers while maintaining financially healthy companies. Though we rarely see eye to eye regarding what rates need to be, the process in place allows for a fair and unbiased examination of the rate requests and
a judicious appeals process. To me, the proof that the process works is simple – rates are some of the lowest in the country and we still have a thriving market of P/C companies. We received the latest auto rate filing the first of February. Because I am the hearing officer, I can’t comment on it, but I can tell you that the rate bureau asked for a 12.3 percent increase. My staff is currently considering whether that is an appropriate request, and we’ll discuss it during hearings slated for this summer.

IJ: How did the department respond to help businesses and individuals with storms and other catastrophes that hit the state in the last year?

Long:
If there is one thing we know how to do by now in North Carolina, it is respond to storms! We’ve had our share over the last few years. Here at the department, we have a consumer services hotline in place all year long. Insurance experts are on-hand to answer questions, take complaints and offer guidance to anyone who needs help before or after a storm hits. We are also the agency housing the office of state fire marshal and our fire and rescue employees are members of our state emergency response team. So my employees help on the frontlines and behind the scenes as well.

IJ: What are your goals as commissioner in 2004?

Long: I want to continue working hard for the citizens of North Carolina, making sure they have access to fairly-priced insurance products from sound, responsive companies. I pride myself in running a department with knowledgeable, courteous and professional staff, and I expect to improve upon our already excellent record of customer service. And, of course, I hope to continue to serve the companies and individuals that we regulate. We have a good relationship with our licensees overall and it’s one that I will be happy to build upon in the future.

Topics North Carolina Property Casualty