IFNC response to Rick Martinez column that ran on Feb, 17th.
News and Observer
Published: Feb 21, 2007
Insurance negotiations
The N.C. Rate Bureau (NCRB was created by the General Assembly in 1977), and not individual insurers, negotiates rates with the Department of Insurance. The NCRB only uses actuarially based rate factors, such as past and anticipated losses, population growth, housing density, the rising cost of building materials and labor, etc.
Increased frequency and severity of hurricanes are predicted for coastal states, as we are at a high point of a natural cycle of hurricane activity. The relation to global warming insurers leave to scientists to debate.
North Carolina is one of few remaining states with a rate bureau. And insurers would rather compete for customers by offering innovative and creative coverage and pricing options than be forced as they are by current law to work with competitors.
Perhaps Martinez would agree it's time for the General Assembly to review the existing regulatory system -- including the N.C. Beach Plan, which the legislature created to provide "last resort" coverage for residents in the 18 coastal counties -- to make sure it is fair, efficient and good public policy for all of North Carolina.
Joe Stewart
Executive Director, Insurance Federation of North Carolina