Opinion: Why do we elect NC Commissioner of Insurance? So people can choose an advocate
As I travel the state talking with voters about why I’m running to serve them as their next Commissioner of Insurance in the upcoming March 5 primary election, many people look confused and ask, “We elect that?”
Yes! North Carolina is one of only 11 states that elect Commissioner of Insurance. It’s a good thing: we believe that the people should choose an advocate to look out for them and keep insurance companies in check. Otherwise, insurance companies would have free rein to charge exorbitant rates that stress our wallets, while they make record profits. It’s a regulated market for a reason.
But for the last several years, insurance rates have gone up faster than the rate of inflation. Many North Carolinians have told me it feels like we don’t have anyone regulating insurance at all. For one, the current Commissioner, Mike Causey, is quick to allow rate hikes — 19 of them so far — and has refused to hold public hearings to require insurance companies to provide evidence under oath and subject to cross-examination to justify the rate increases. Second, insurance companies have been allowed to overuse the “consent to rate” loophole to charge families up to 2.5 times the maximum rate set by the Commissioner. There is also a third group of factors at play: the impact of climate change-induced severe weather, the increased cost of materials, and the unavailability of reinsurance in global markets. While the third group of global factors is largely out of the control of the Commissioner of Insurance, the first two are his responsibility to address.
Rates on homeowners’ policies are threatened to go up again this year, by an average of 42% statewide. I’ve called on the current Commissioner to hold a timely public hearing, to bring the rate setting process into the light. Every other time we’ve been faced with a rate increase, he has failed to hold a court-style public hearing, preferring instead to make private agreements with the insurance companies that allow rates to rise time and time again. He even delayed the rate hike decision until after election day, when voters can no longer hold him accountable. This “good ol boy politics” behavior doesn’t work for us and North Carolinians deserve better.
Previous N.C. Insurance Commissioners provided the transparency we deserve by holding full public hearings, forcing insurance companies to prove that a rate hike is absolutely necessary for them to earn the reasonable profit they are allowed under the law, not gouge consumers. The Commissioner is supposed to represent the people, not the insurance companies, to ensure we have a vibrant marketplace of insurance options, at reasonable prices.
We also need an Insurance Commissioner who will stop insurance companies from using “consent to rate” (CTR) notices to charge so many North Carolina home and auto policyholders up to 2.5 times higher than the maximum rate. It’s exactly the kind of corporate grift that the Insurance Commissioner should be cracking down on. CTR was created under N.C. law as a loophole available for rare and uniquely difficult-to-insure situations. It was not supposed to be used to hit regular home and car owners with excessive rates. Yet, insurance companies have started using CTR so often that it’s almost the norm. Too many North Carolina families get a notice in their bill that their rates are going way up, even when they haven’t filed a single claim. They are shocked. They feel trapped. North Carolina needs a Commissioner who will protect North Carolina families from strong-arm tactics like CTR that allow insurance companies to make record profits while families struggle to make ends meet. That’s why we elect a Commissioner of Insurance.
North Carolina law allows insurance companies to make a reasonable profit. It’s important to balance their reasonable profits with reasonable prices for consumers because we want insurance companies to continue to do business here, and to offer a wide range of policies from which North Carolinians can choose. We don’t want to drive insurance companies out of our state completely. The right balance protects consumers. We should not look the other way while insurance companies use CTR and private agreements with the Commissioner to make record profits and overcharge North Carolina families. North Carolinians deserve an Insurance Commissioner who remembers why we elect someone to do this important job on the Council of State.
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Natasha Marcus is a three-term State Senator representing District 41 and is a Democratic candidate for NC Commissioner of Insurance. Learn more about her campaign at NatashaMarcus.com.
This article originally appeared on Asheville Citizen Times: Opinion: NC residents need Insurance Commissioner who is on their side
