Auto insurance legislation filed with GA
Bills aimed at bringing competition to the state's car insurance industry have been introduced in the North Carolina House and Senate.
On Thursday, the Automobile Insurance Regulatory Modernization bill was filed in the Senate by Sen. Wesley Meredith, R-Fayetteville. A similar bill was also filed in the NC House by Rep. Jeff Collins, R-Rocky Mount.
One of the primary sponsors of the Senate bill is Sen. Ralph Hise, R-Spruce Pine. Hise represents Madison, McDowell, Polk, Rutherford and Yancy counties.
The bill is meant to allow car insurance companies to develop their own insurance rates, including charging additional for drivers that have "risks" attached to their policy. Those risks can include minor traffic tickets.
"The general overview is that we have a market in North Carolina where individuals have risks in their policy and the state does not allow a charge of the full rate for those risks," Hise said.
The bill would preserve the North Carolina Rate Bureau but gives insurance companies the ability to opt out of the Rate Bureau's current rate control structure.
"Most people in North Carolina are paying to supplement other people's insurance," Hise said.
All of the rates would still have to be reviewed by the Insurance Commissioner who would continue to have the authority to reject any rate increases that are considered to be "excessive."
FAIR NC, a coalition of insurance companies and trade groups in North Carolina, said the bill will balance out rates between good drivers and bad.
"By mandating how insurance companies set their rates, North Carolina stifles competition and forces good drivers to subsidize the cost of insuring risky drivers," said Bob Rosser, spokesman for FAIR NC, in a statement. "Good drivers pay more so bad drivers can pay less."
Hise added that the bill makes the playing ground more fair, especially for those good drivers that have higher rates to subsidize those drivers with risks.
"You will find that most drivers will wind up paying less each month," Hise said. "However, the individual drivers that have a higher risk than what they are paying for will have their rates go up according to those risks, if the insurance company opts out of the current program."
In addition to allowing for competitive rates, the bill also puts in place the ability for insurance companies to provide discount programs for drivers. Those are currently not available by North Carolina law.
"This will allow insurance companies to put their rates out there and be competitive," Hise said. "Rate payers in the state will also have different price breaks allowable in the state because they are not now."
The House and Senate bills have yet to be assigned to committee for hearings.