We strongly encourage you to contact the members of the House Insurance Committee with whom you have a personal or professional connection. Place a phone call, write a letter, or send an email that asks for the support of Senate Bill 900 -- Disclosure of Recoupment Surcharge.
Talking points from the Insurance Federation of North Carolina on: Senate Bill 900/House Bill 1298 Disclosure of Recoupment Surcharge (click on bill title to link to legislation)
Senate Bill sponsor: Sen. Rand; co-sponsor: Sen. Apodaca
As of May 31, 2007
Background:
Under current law, a recoupment surcharge is assessed on all auto liability policies to cover losses from accidents cause by motorist whose liability coverage has been placed in the N.C. Reinsurance Facility.
Insurers forward the money collected through the surcharge to the N.C. Reinsurance Facility, which was created in the 1970s by the General Assembly to provide liability coverage for motorists for whom the approved rate is insufficient given the risk. The collected recoupment surcharge goes to cover accident expenses that exceed what those in the N.C. Reinsurance Facility pay in premiums.
Recoupment was disclosed at one time, but General Statute ยง 58-37-40(f) was changed in 1989 to require that the surcharge "shall be combined with and displayed as part of the applicable premium charges," so insurers cannot tell their customers how much they must pay in recoupment.
Senate Bill 900 would allow for the surcharge to be disclosed using the following language:
RECOUPMENT IS AN ADDITIONAL CHARGE ON YOUR AUTOMOBILE LIABILITY INSURANCE TO SUBSIDIZE LOSSES IN THE NORTH CAROLINA REINSURANCE FACILITY AS REQUIRED BY LAW.
All auto liability insurance consumers pay this surcharge, regardless of their individual driving record. The amount of surcharge paid by consumers in 2006 was $250 million, or an approximately 10 percent surcharge on top of their liability premium; the surcharge varies from year to year based on losses within the N.C. Reinsurance Facility, but generally ranges between 5 and 15 percent.
Since 2000, North Carolina's auto insurance policyholders have unknowingly paid nearly $1 billion in surcharges to subsidize the insurance rates of those in the NC Reinsurance Facility. IFNC supports disclosure of the recoupment surcharge to consumers as a much-needed modernization to the current regulatory system.
Action:
Senate Bill 900 will be heard by the House Insurance Committee. Specific dates for these hearings have not yet been set, but we need members of this legislative committee to hear NOW from IFNC Member company agents and employees who support the disclosure of this mandatory surcharge.
Place a phone call, send an e-mail, or write a letter to the members of the House Insurance Committee, asking for their support of Senate Bill 900 Disclosure of Recoupment Surcharge when it comes before their committee for a vote.
You are asked to contact those Representatives you know personally or with whom you have some personal or professional connection, or who represent the area where you live and/or work. The best days to reach Representatives in their legislative offices are Tuesdays, Wednesdays, or Thursdays.
A list of the members of the House Insurance Committee is included on this site, showing the counties they represent and listing their e-mail address, office address, and phone number.
Please contact Joe Stewart at joe.stewart@insurancefederationnc.com or (919) 834-9773 at the Insurance Federation of North Carolina office in Raleigh, on which members of the Senate Commerce Committee and/or House Insurance Committee you contact, or if you have any questions.