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Raleigh —A legislative committee Wednesday heard arguments for and against a proposal that would give auto insurance companies more control over the rates they charge consumers.
The industry wants a free-market system that would take control of the rates away from North Carolina's commissioner of insurance, who is elected.
Senate Bill 901, which calls for an impartial panel to set rates, was pulled from the Legislature last May so that lawmakers could further study it.
The Joint Legislative Study Committee on Automobile Insurance Modernization decided Wednesday that it needs more information about the matter.
Commissioner of Insurance Jim Long said he thinks the current system is working for all parties involved.
North Carolina drivers have the sixth-lowest insurance rates in the nation, and insurance companies are making a profit, Long said.
"We've got companies coming in every year to write auto insurance business in North Carolina. They're making a profit – they're making a healthy profit. We want them to make a profit," Long said.
Long and others fear premiums could increase if insurers get more control.
"In a captive market, where consumers have no choice but to buy auto insurance, there has to be a third-party regulator to ensure customers don't get ripped off," Consumer advocate Rob Thompson, with the North Carolina Public Interest Research Group, said.
Insurance companies have contended that Long's political power puts them at a disadvantage.
Historically, they typically ask for much higher rates than they get, and when they appeal the rates enforced by the Department of Insurance in court, Long almost always wins.
Insurers also point to fairness for bad and risky motorists.
"The point is the rates need to be right for everyone," said Joe Stewart, executive director of the Insurance Federation of North Carolina. "If you are a good risk, you deserve a great rate, and you shouldn't subsidize someone else's accidents."
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