NC Insurance Commissioner raises dwelling rates without a hearing. It’s not the 1st time.
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North Carolina Insurance Commissioner Mike Causey has again settled a legal dispute with insurance companies, raising insurance premiums without a public hearing.
Less than a year after the N.C. Rate Bureau filed its proposed dwelling-rate increase, the two-term commissioner announced last week he has negotiated an average statewide hike of 8%.
It’s the fourth increase since 2018 as weather-related risks mount and insurers argue it’s harder to do business in the state. But it’s significantly less — 42.6 percentage points — than what the Rate Bureau, which represents insurance companies, had proposed (50.6%) last July.
Unlike homeowners’ insurance, dwelling policies cover the needs of landlords who don’t live on the insured property. It can also cover a home that is not owner-occupied or is valued below the minimum coverage limit available for a homeowners’ policy.
Causey, a Republican who is up for re-election Nov. 5, had scheduled a July 22 hearing on the dispute. He’s since canceled it — similar to what he’s done in the past when he negotiated a 9.9% increase in 2022, a 7.6% increase in 2020, and a 4.8% increase in 2018.
“I’m glad that we’re able to avert a potentially lengthy and costly hearing,” Causey said in a release.
But not everyone is happy. His opponents argue the latest settlement lacked “transparency.” They also say it’s a harbinger of what’s to come. The Rate Bureau and the state remain locked in negotiations; several other cases are still pending.
Separately, the Rate Bureau has filed an average overall 42.2% hike for homeowners’ insurance; an 82.9% increase for mobile home fire policies (MH-F); and a 49.9% increase for mobile home casualty policies (MH-C).
If they can’t agree, a court date on homeowners’ insurance has been scheduled for Oct. 7 and on mobile home insurance for April 7, 2025 — well after the general election.
Causey’s challenger, state Sen. Natasha Marcus, a Democrat, casts doubt on whether the hearings will ever go ahead. In eight years as the commissioner, Causey has raised property insurance rates 16 times — all without a public hearing, she said. She expects this time will be no different.
“Causey has a longstanding pattern of promising hearings and then settling privately before the hearing can occur,” she said in an email to The News & Observer. “Unless voters reject him at the polls, he’ll do what he always does: cancel the public hearing and agree in a private.”
‘Disappointed’
For its part, the Rate Bureau said it was “disappointed” with the most recent settlement.
Rising construction and labor costs, weather-related losses and the state of the reinsurance market — the insurance that covers insurance companies — are pushing insurers to their limits, they argue. As underwriters tighten guidelines, more residents are losing insurance.
Jarred Chappell, the Rate Bureau’s chief operating officer, said insurance claim and disaster data over the last decade shows the need for a larger increase. While the settlement saves time and costs, “it also continues to kick the can down the road,” he said.
“The state deserves to have a strong and healthy insurance market. Unfortunately, this settlement does not achieve that,” he said.
North Carolina is one of the few — if not the only — state in the country where the Rate Bureau has the responsibility to file rates on behalf of the entire industry. In most states, each carrier files its own homeowners’ rates independently.
Setting rates is a “delicate balancing act,” said Joe Stewart, vice president for government affairs of the Independent Insurance Agents of North Carolina.
The current economic climate makes it particularly tough, he added. Both sides “feel tremendous pressure for an outcome seen as favorable to their respective constituencies.”
Ultimately, he said, it’s in neither party’s interest to prolong the process.
Carriers will stay only as long as the market remains buoyant, he said. “And no commissioner wants to preside over an insurance availability crisis.”
This story was originally published June 6, 2024 at 8:00 AM with the headline "NC Insurance Commissioner raises dwelling rates without a hearing. It’s not the 1st time.."
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