This bill will require the auto insurance surcharges imposed to subsidize the losses of the North Carolina Automobile Reinsurance Facility (NCRF) be clearly communicated to policyholders. The proponents of modernizing North Carolina's rate making system see this transparency as an important step in the process. Most consumers do not currently realize that a portion of their premiums are being used to subsidize the inadequate rates being charged to those insured in the reinsurance facility. This bill is being supported by the NCDOI, and was introduced by Co-Chairs of the Senate Insurance Committee. IIANC does have some concerns that breaking out the surcharge on the policies will initially create some confusion with policyholders, but is supportive of the legislation.
As previously reported, this bill would have allowed companies to opt-out of using the SDIP system. With no visible supporters, this legislation does not appear to have any legs, and is not expected to advance.
This bill would provide for greater protections for lienholders in regards to the issuance of proceeds to pay for automobile claims. Lenders and the insurance carriers are working out the details of this legislation, and the expected impact on agents is minimal.
The next few items are not yet active bills, but are expected to be introduced soon:
Property Insurance Fairness (Draft Bill):
While this bill has not been introduced, there are a couple of versions of drafts being circulated that would provide for the issuance of catastrophe bonds to assist in the funding of a catastrophic loss in the Beach/FAIR plan, as well as other provisions. IIANC will reserve further commentary until a bill is actually filed.
Workers' Compensation simplification:
IIANC is exploring options for making further efforts to simplify the rules around workers' compensation, including consistent treatment between officers of corporations and members of LLCs. The current inconsistent treatment between the two groups continues to cause confusion among consumers, which can lead to lack of compliance, fines and uncovered claims. North Carolina continues to have a disproportionate percentage of agents' E&O claims that are driven by workers' compensation policies.
IIANC is engaged in conversations with industry groups and other stakeholders over the possibility of pursuing additional legislative remedies to the epidemic of distracted driving, particularly as it relates to cell phone use and texting. As most people know, automobile claims' frequency has recently been on the uptick, because of increased instances of auto claims due to distracted driving. The North Carolina Rate Bureau has recently filed for a 13.8% rate increase in order to accommodate for increased losses. In addition to this being a strong insurance issue, IIANC feels strongly that working to reduce this problem is good public policy and the right thing to do.