Goodwin delays request for home insurance hike
Calling the request by the N.C. Rate Bureau “excessive and unfairly discriminatory,” Goodwin’s ruling sets up a hearing on the increase next spring, after November’s election.
Goodwin, a Democrat, faces Republic Mike Causey in the election. Insurance commissioners, however, often reject initial requests for rate increases.
Goodwin will serve as the hearing officer and listen to experts from the state Department of Insurance and the Rate Bureau, which represents insurance companies, before deciding on any changes.
The hearing, which will be open to the public, is scheduled to begin on June 3, 2013, at 10 a.m. at 430 N. Salisbury St. in Raleigh.
The Rate Bureau requested an average increase statewide of 17.1 percent for homeowners, not just fire, theft and casualty, but wind policies as well, beginning next June.
While areas in western North Carolina would see increases of only 1.2 percent, and metropolitan areas in the central part of the state would see hikes of around 11 percent, coastal counties would be hit with increases reaching 30 percent.
The last homeowners’ insurance rate filing was in 2008, when the insurance companies requested a 19.5-percent statewide average increase.
A settlement allowed a 4.05 percent statewide average increase to go into effect in May 2009.
About 8,800 comments were e-mailed or mailed, and about 35 people made comments during a meeting Oct. 17 on the request.
According to a news release, department experts believed the requested rate increases are not justified based on the data submitted.
Among the reasons were old data being used to base the request, and that risk factors sited by the Rate Bureau did not appear to be justified.
Goodwin’s statement said the Rate Bureau uses a methodology that results in excessive profit factors of 10.5 percent, which is not allowed in North Carolina and has been successfully challenged in a 2001 auto insurance case decided by the N.C. Supreme Court.
The finding also said the Rate Bureau includes a factor for discounts that some insurers give some of their policyholders that, in effect charges discounts back to consumers which has also been disallowed numerous times in auto filings litigated in the state Supreme Court.
Hurricane losses are derived using a hurricane model that does not appear to be adequately documented or justified, according to the statement.
Any decision made by Goodwin on the rate request following next June’s hearing will likely head to the courts for a final decision.
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