PCI airs its support of changing rates in North Carolina | bInsurance/b b.../b
In a move that could result in more homeowners insurance leads for agents, the Property Casualty Insurers Association of America made clear its support of making rate changes for homeowners insurance in North Carolina.
On March 21, PCI delivered written testimony to the North Carolina Legislative Research Commission Subcommittee, which detailed why it was in favor of adjusting rates for policyholders.
Don Griffin, PCI's vice president of personal lines, said the changes could benefit both insurers and insurance customers.
"Flex-rating programs would provide more flexibility to insurers already doing business in North Carolina, likely attract more insurers to the state, increase competition, and lower insurance premiums for many policyholders," said Griffin.
He added that if regulators adopt the flex-rating system, it should be allowed to end five years after it's instituted and replaced by an open rating system. Once this kind of insurance environment is established, insurers should be afforded the ability to set their own rates in the Tar Heel State.
PCI indicates that under the open rating system, regulators would still be tasked with the ability to review rates before they go into effect to ensure that they're fair.
North Carolina is the only state that has a rate bureau for property insurance," said Griffin. "A rating system more consistent with other states would help maximize competition in the state's insurance market."
In addition, PCI recommends that North Carolina regulators allow rates to vary by geographical location, wherein policyholders who live in a portion of the state that's more at risk for severe weather events would pay higher rates than areas where environmental hazards aren't as prevalent. This kind of pricing system is called territorial rating, which has been used in the past.
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