Are you aware that if you live on the coast of NC, or if you own a vacation home here, you pay 3 to 5 times more for you homeowners wind insurance than say someone from Charlotte? You might not know that especially if you pay your insurance through an escrow account.
And if you rent, your rent may include these extra high rates if your landlord is passing his cost on to you as is the general practice.
Below is a summary of a presentation by NC-20 to NC Legislators and the NC Insurance Commissioner on January 18, 2010 in Raleigh. There is much more to this complicated issue than summarized below, such as Re-insurance by the Insurance Companies at your expense. You can also hear a radio interview by Lockwood Phillips on Viewpoints of Representative Pat McElraft and Kenneth Lang of the Crystal Coast Tea Party Patriots here.
NC-20 Meeting on NC Insurance Companies
NC-20 Tom Thompson, Chairman
Willo Kelly, President
NC Legislature Pat McElraft + 10 to 12 others
NC Insurance Commissioner Wayne Goodwin + staff
Carteret County Commissioner Robin Comer
Commissioner Greg Lewis
8 to 10 county residents
Dare County residents
Ocean Isle, NC residents
Purpose: NC-20 requested an independent assessment of NC insurance practices
Excellent presentation by Willo Kelly of NC-20
Situation:
- Insurance companies model insurance risks using models developed by the insurance industry then they make rate recommendations to the NC Rate Board
- NC Rate Board evaluates the input from the insurance industry request based on insurance company models. Rate Board is heavily composed of insurance executives. They recommend to the the rate increases to the Insurance Commissioner
- NC Commissioner acts on recommendation of the Rate Board often without public comment (current Insurance Commissioner, Wayne Goodwin, claimed to have held a public hearing on the last proposed rate increase that was apparently denied); The sitting Insurance Commissioner may have former ties with insurance industry
- 1944 Federal Law exempting insurance companies from anti-trust laws, so Insurance Companies are permitted by law to collude in setting insurance rates throughout the United States
- Insurance companies are dumping policy holders into the Beach Plan therefore eliminating all of their risks, but they still make 15% from the premiums in the Beach Plan
- Named Storms (as determined by NOAA) kick policy holders into a 1% deductable category; storm maybe in the Caribbean, and wind damage in NC during the named storm event maybe unrelated to the named storm
Seems there may be some potential for legislative fixes, but it is clear the NC Insurance system is a huge mess.
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January 20th, 2012 on 2:35 pm
Thanks for the update … I follow your posts regularly. However, your 3rd item or paragraph or point about the Commissioner of Insurance Goodwin is INCORRECT! Goodwin, in office just about four years, REQUIRES a public comment period for the statutory rate filings. His predecessors never required that. News reports said more than 800 people wrote in for the public comment period in 2011, many from our area here along the Crystal Coast; others chose to speak in person at the public comment period, which by law is separate from a public hearing. I read in the news that Godwin also DENIED the requested insurance rate hike and ordered a public hearing. The open public hearing was held for more than 2 months. Thousands of pages of testimony. This is a hearing you suggest didn’t occur?!? Also, Goodwin has *NO* ties to the insurance industry. His two campaign opponents, both of them Republicans, are both current or former insurance agents. One of them is a former insurance executive and former lobbyist. Goodwin is the only independent one while his campaign opponents are the foxes wanting to guard the henhouse. As an attorney, Goodman has spent his professional life fighting against wrongdoing by insurance companies and as Commissioner has recovered/saved over a billion dollars for us citizens, taken from insurance companies. He’s helping us! Please don’t make statements unless you have the facts, Ken!
January 20th, 2012 on 3:30 pm
Thanks for checking in on our site.
You are right, and you are wrong and I’m not INCORRECT, but perhaps it was my inability to clearly write what I intend to say when summarizing what took place at a long and complicated meeting. Next time you can come to the meeting and I’ll post your summary???
You may be right that there is a statutory requirement for public hearings, but I did say in the post that hearings don’t “often occur” not never as you seem to imply. I also did not say that Mr. Goodwin had not had any public hearings. Not sure where you got that idea? In addition, no one at the meeting mentioned that a statutory requirement existed, including the Insurance Commissioner, any of the NC Legislators, or others in attendance. I also said that the Insurance Commissioner “claimed to have had a public comment on the last rate increase.” So what’s so confusing about that? I said “claimed” because no one at the meeting acknowledged that such a hearing had or had not taken place except Mr. Goodwin, and I did not have personal knowledge that a meeting had taken place. I also said that “the rate increase was apparently denied.” So how is that different than you saying that it was DENIED except you used all caps to express your outrage at something you overlooked in the post?
I badly worded the statement that “the sitting Insurance Commissioner may have ties to the insurance industry.” I did not mean to imply that Wayne Goodwin himself had ties, but meant that there is no prohibition against any sitting Insurance Commissioner from having ties to the insurance industry. In fact, I met the two people at the meeting you referred to in your comment who are considering running against Mr. Goodwin in the upcoming election, and they both are currently working in the insurance industry as you said. IMO I would not like to see either one of those people elected as Insurance Commissioner, but I do hope that someone who has no ties with the industry will run against Mr. Goodwin.
My point about the relationship between the insurance industry, the Rate Board, and (potentially) the Insurance Commissioner was intended to convey that this arrangement is possibly a case of the fox guarding the fox who is helping the fox who is suppose to be guarding the hen house. I was not criticizing Mr. Goodwin as you seem to have been so sensitive to, but was trying to point out the flaw of the current insurance system in NC that permits these potential conflicts of interest under any insurance commissioner.
By the way, I did make statements based on the facts as I understood them. My intent was not to mislead as you implied, but to report what I heard at the meeting. If you want to give me an F for not clearly conveying what occurred at the meeting okay, but I did not make statements as you interpreted them in your comment.