North Carolina property insurers are on hold while the industry rating agency contemplates whether to appeal a decision by regulators denying a proposed 25.3 percent rate increase.
The North Carolina Rate Bureau made the rate filing on behalf of the 100 insurers that provide homeowners coverage around the state. At the time, the rate bureau called for a 25.3 statewide average rate increase to take effect in June.
However, after a lengthy review that included a public hearing, Insurance Commissioner Wayne Goodwin denied the proposed rate change in favor of no rate change.
North Caroling Rate Bureau General Manager Ray Evans said the bureau would make a final decision on whether to appeal the order by January 15.
Evans said that the bureau stands behind the rate filing and is disappointed with Goodwin’s decision.
“We thought we did a good job with providing all of our evidence and the testimony of our experts,” said Evans.
Goodwin, however, was far from convinced. He noted that the 25.3 percent rate proposal would increase homeowners’ rates by an average 24.8 percent, rental policies by 54.9 percent and condominium rates by 50 percent.
By comparison, Goodwin’s order would result in a 0.3 percent average decrease in homeowners rates, a 9.9 percent increase in rental policies and a 7.7 percent increase in condominium policies.
Goodwin also took a dim view that the rate bureau was asking for an additional increase given that insurers receive a seven percent increase in 2013.
North Carolina Department of Insurance experts said that rates should be decreased by an average of minus 11.7 percent to minus 13.6 percent. Goodwin, however, by law is not allowed to lower rates beyond the zero percent level.
The question now is: what next?
Evans said the bureau is just starting to formulate a response to Goodwin’s order, which, he said, will take time given the length and detail of Goodwin’s 350-page order.
First up, said Evans, is a meeting of the bureau’s actuaries who are scheduled to meet this week.
Any appeal would go the North Carolina Court of Appeals. Evans said, based on past experiences, it could take the better part of a year for a final decision.
Was this article valuable?
Here are more articles you may enjoy.