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NC auto insurance overhaul proposal defeated

Posted: April 17, 2013
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RALEIGH, N.C. (AP) — Legislation to overhaul North Carolina's automobile insurance system was rejected Tuesday by a House committee after Insurance Commissioner Wayne Goodwin and other speakers argued it would raise premiums for everyone.

The House Insurance Committee turned down a motion to recommend the measure to the full House by a vote of 18-11. Watching the vote in the crowded committee room were lobbyists representing some of the largest insurance companies doing business in the state, which were divided on the issue.

The bill would have allowed individual insurance companies to lower or raise their own overall premiums by 7 percent annually, bypassing the current system in which the North Carolina Rate Bureau — representing all auto insurers — files one combined annual premium proposal to Goodwin's office. The measure also would have gradually ended an extra charge that all drivers must pay to make up for some motorists considered too risky to pay conventional rates.

The commissioner approves or rejects the Rate Bureau's rate requests. Goodwin said he would have a hard time stopping the individual rate requests allowed in the bill.

If the legislation were to pass, Goodwin told the committee, premiums "would have nowhere to go but up." While the current system isn't perfect, the commissioner said the proposed overhaul would "dismantle the system that works well for both drivers and insurers." He said North Carolina historically has ranked among the least expensive average premiums in the country.

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