North Carolina legislators have begun examining the state’s rate-setting system and its effects on the auto insurance industry. Lawmakers have been assessing whether changes need to be made to the system since early 2011, when proposals for fixes to the system made their way to the state’s General Assembly. Some legislators claim that changes to the state’s auto insurance system need to be changed to be more consumer friendly, while others say that the current system is not effective in handling the risk of those with poor driving skills or mitigating the impact of fraud.
Many of the proposals currently being considered by lawmakers aim to improve the state’s rate review process. These proposals are also designed to change the state’s auto insurance regulations so that premiums would better reflect risk associated with bad drivers. State Farm is among the insurers supporting an auto insurance overhaul, but some consumer advocacy groups claim that new regulations favoring insurers would bring more costs to consumers.
The Legislature is expected to begin making changes next year, but legislators have yet to detail any plans. For now, lawmakers will be assessing whether any changes do need to be made. With the coming election year, some of the changes proposed to the system may run afoul of consumer groups and insurance organizations as politicians look to secure votes with their chosen constituents. If this is the case, any changes made may not take effect until 2013.