North Carolina Regulators, Rate Bureau Agree to Roll Back Auto Rates

Private automobile insurance rates in North Carolina will be rolled back to just under 2006 levels following a settlement signed by Insurance Commissioner Wayne Goodwin and the North Carolina Rate Bureau.

According to a statement from Goodwin's office, the settlement does away with a 9.4% rate increase last year and denies the NCRB's request for a 1.4% rate increase in 2009. Plus, rates are decreased an additional 0.5% and the NCRB, an independent organization that represents all auto insurers doing business in the state, cannot file changes to auto rates until 2011.

Goodwin said the settlement will save North Carolina policyholders $545 million.

"Drivers will not only see lower rates, but many will also receive refund checks beginning in mid-2010 that may together total more than $50 million," Goodwin said.

The changes will go into effect Nov. 1 and are retroactive to Jan. 1.

The North Carolina Department of Insurance opposed the NCRB's 1.4% rate increase proposal in April. Regulators determined a rate increase was not justified based on the data submitted, the department said. It was based on the interim 9.4% rate increase currently being charged by insurance companies during their appeal of the 2008 auto rate order. Also, the rate filing included data from the state reinsurance facility, which regulators believe is "double-dipping" and should not be included, as it submits separate rate requests using its own data, according to the department (BestWire, April 3, 2009).

In 2008, the top five writers of private-passenger automobile insurance in North Carolina, according to A.M. Best Co. state/line product information based on direct premiums written, were: Nationwide Group, with a 20.8% market share; State Farm Group, with 13.6%; Allstate Insurance Group, with 10.9%; North Carolina FB Insurance Group, with 9.1%; and GMAC Insurance Group, with 7.8%.