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The ratemaking process in North Carolina is complex, but one thing is simple: Jim Long does everything in his power to keep rates low for North Carolinians.
North Carolina General Statutes give Commissioner Long express powers to set rates in certain areas, most particularly the businesses of homeowners insurance and auto insurance. A private organization that represents all of the insurance companies in this state that offer homeowners and auto policies, called the North Carolina Rate Bureau, negotiates with the Commissioner for any rate changes. For the past 19 years, it has been up to Jim Long to decided whether companies deserve a rate increase or not.
Most often, they don't. In fact, since 1993, Commissioner Long has successfully fought attempted rate hikes in homeowners coverage three times, saving nearly $800 million in higher premiums. Since 1985, he fought high auto insurance rates nearly every single year, saving an overall $3.6 billion in excessive premiums.
When setting rates, Commissioner Long must play a game of Goldilocks and the Three Bears, though - rates can't be too high for consumers, who have to pay the bills. They can't be too low for insurance companies, who have to make enough profit to survive financially. Rates have to be just right, a balance for consumers and the companies that write policies.
"In my 19 years as insurance commissioner, I've been very pleased with the way my department works with the Rate Bureau. I truly believe it has allowed us to keep rates low for consumers while maintaining finically healthy companies. Though we rarely see eye to eye regarding what rates need to be, the process in place allows for a fair and unbiased examination of the rate requests and for a judicious appeals process.
To me, the proof that the process works is simple - rates are some of the lowest in the country and we still have a thriving market of property and casualty companies."
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