So which system for rate setting is best and who should get control? Check it out.
NORTH CAROLINA -- The General Assembly is considering a massive overhaul to how the state sets auto insurance rates.
Currently, companies propose increases which are either approved or denied by an elected insurance commissioner.
Those companies are asking for more control over rates, but the Joint Legislative Study Committee on Automobile Insurance Modernization has to decide what is most financially fair for drivers.
Right now, NC law says you have to have liability insurance. On average that coverage costs a little more than $600 per year.
“We have the sixth lowest auto insurance rates in the nation,” said NC Insurance Commissioner, Jim Long.
He said the system, which he is a part of, could use some changes but for the most part is working. The NC Public Interest Research Group agrees.
“When consumers are forced to buy a product, that product has to be regulated by an independent third party,” said policy advocate, Rob Thompson.
The committee will make its final report on the study and any proposed legislation before Dec. 31, 2008.
The insurance industry says to give the best rates, it needs to be able to compete freely in the marketplace without the current legislative limits.
“The best possible thing for all motorists is to pay a rate equal to the risk they represent,” said NC Insurance Federation Executive Director, Joe Stewart.
So which system for rate setting is best and who should get control? That's what the legislative committee is trying to find out. It held its first information gathering meeting on Tuesday.
“The commissioner is a judge and jury and that's a concern,” said State Senator, Tony Rand.
The committee will make its final report on the study and any proposed legislation before Dec. 31, 2008.