Insurance controls can remain the way they are and don’t require any fixing


shutterstock_13813192Raleigh’s new ascendant Republicans would do well if they tried doing something extraordinary by helping the poor man instead of trying to clip his wings and further empowering and enriching the rich corporations. This is certainly not evident in the bills that are pending before the State Legislature, where there are modification plans to eliminate the regulatory controls in auto insurance rates.

These sponsors are trying to do some window dressing in order to make it look like they are doing something in your interest, but it is a well-known fact that this is far from the truth. This prescription is going to do no good for the policyholder. This is just another ploy to modernize things and make the industry more competitive. We certainly agree that modernization is a good thing, but no one can argue about the effects that competition will have.

The whole purpose of the proposed legislation is really evident which is – to curtail the role of the insurance commissioner in North Carolina and thereby relax some of the insurance controls which put restrictions on the insurance companies, especially with regard to hike in insurance rates.

The writing on the wall is loud and clear – ‘They want more of your money’ states Democrat Wayne Goodwin. These proposals will help insurance companies get more of your money as this will lead to an increase in auto insurance rates. The lobbyists clearly have the dollar sign in their eyes, he states. Why else would they support these changes and vote for it?

However, the insurance companies have claimed that the present law goes against the overall deregulatory mood throughout the country and there may be a point there. If there are changes to be brought about in the insurance rates in North Carolina, an industry-wide request must be filed by the insurers. This is the only state where this practice prevails. During 2006, the insurance companies wanted a hike of around 7.4% but managed to get only 2.9%.

As a result of these controls the rates in North Carolina are continuously the lowest in the nation as per the data available from the National Association of Insurance Commissioners.

As of now North Carolina’s regulatory policies are working well and don’t need any fixing. This is evident in the fact that, Nationwide – one of the biggest companies went public this week. So, that goes to show that the present system is functioning very well.