Two weeks ahead of an election deciding whether he keeps his job, North Carolina’s insurance commissioner told companies they’ll have to prove they should be allowed to increase homeowner’s premiums by a statewide average of 17.7 percent.
The move by Insurance Commissioner Wayne Goodwin at least postpones the rate increase that insurers had wanted to take effect on June 1.
Goodwin scheduled a hearing June 3 where the companies and staffers at the state agency will present arguments for and against the increase. The commissioner — either Goodwin or Republican challenger Mike Causey — would then decide whether any increase is warranted, and if so how large it should be. Insurers could appeal in court a decision they didn’t like.
The insurance companies are represented by the North Carolina Rate Bureau. The group’s director and attorneys didn’t respond to requests for comment Tuesday.
The last homeowner’s insurance rate increase was in 2008, before Goodwin took office. Insurance companies sought an average of 19.5 percent statewide and got 4 percent.
The agency headed by the Democrat seeking re-election to a second four-year term said the proposed rates appear “excessive and unfairly discriminatory.” The state insurance commissioner’s duty is to balance the cost of consumer and business insurance rates with the need to foster a competitive insurance market in North Carolina.
“After an initial review of the filing and comments submitted by the public, department experts believe the requested rate increases are not justified based on the data submitted,” Goodwin’s office said in a statement.
Goodwin’s department said insurers may be trying to support their argument for a homeowner’s rate increase by using old data, unjustified risk factors, and a profit calculation method previously denied by the state Supreme Court.
A model estimating hurricane damage and losses companies could face “does not appear to be adequately documented or justified,” Goodwin’s office said.
Causey has gotten a boost in coastal counties because the property insurance increases approved in 2008 went into effect during Goodwin’s term, causing premiums to soar by up to nearly 30 percent along the coast.
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