Publisher's note: The author of this post is Barry Smith, who is an associate editor to the Carolina Journal, John Hood Publisher.
Companies say bill would have halted the penalizing of safe drivers
RALEIGH An effort to allow auto insurance companies to set their own rates collided with opponents on Tuesday as the bill failed to muster enough votes to get out of committee.
Members of the House Insurance Committee, by an 18-11 vote, defeated the bill, leaving supporters looking for ways to move it forward.
"I think we're going to regroup and adapt," said Rep. Tom Murry, R-Wake, and a primary sponsor of the bill.
The bill, which would have provided more leeway to companies rather than having rate caps set by the Rate Bureau, brought out supporters and opponents alike at Tuesday's meeting.
Democratic Insurance Commissioner Wayne Goodwin was among those making a passionate plea to defeat the bill. Goodwin said that if the bill were to become law, there would be "no way logistically or legally" to stop auto insurance rate increases.
"Our rates would have nowhere to go but up," Goodwin said.
Bob Rosser, a spokesman for FAIR NC, a coalition of insurance companies pushing for the change, said he was disappointed in Tuesday's result.
"North Carolina drivers deserve better," Rosser said. "We will continue to push for common sense reforms that prevent good drivers from being penalized by hidden fees and inflated rates."
The bill would have allowed the insurance companies to set their own rates. However increases or decreases could not have been more than 7 percent during one year. It would have also eliminated surcharges on motorists used to subsidize risky drivers.
Lobbyist John McMillan, representing the American Insurance Association and other insurers, voiced support for the bill, saying it would do away with a reinsurance fee that good drivers have to pay to subsidize more risky drivers.
"We contend that the premium for most people will go down," McMillan said.
Rep. Jerry Dockham, R-Davidson, the committee chairman, called for a vote on the bill once members from the public had the opportunity to speak on the bill.
Dockham rejected an effort by Murry to postpone a vote on the bill until a later meeting. He said after the meeting that he and Murry had earlier agreed to take the vote.
"I told him we wanted to vote on the bill today, and that was my intention," Dockham said. "I wanted to stick to what I had said and what we had agreed to. So, when he made the motion to postpone it, that was not what we agreed to."
Murry said he was surprised by not being allowed to postpone his bill.
"It was definitely not expected," Murry said. "Although I'm not sure that he was expecting my motion either."
Dockham voted against the bill, saying he thought it would make rates go up.
"This system has worked well for us, all these years," Dockham said. "Do we need to make some changes? Yes. We have bills coming that will do that."
Dockham continued: "This was just too big of a change at one time."
Murry said he wouldn't give up on trying to find a way to change the state's auto insurance law to a more free-market oriented system.
"There's always room for negotiation," Murry said.