N.C. General Assembly Legislative Update Link - Monday, March 20, 2017: http://us7.campaign-archive2.com/?
Property Insurance Fairness Act
Last Wednesday, along with Senator Harry Brown and Senator Bill Rabon we filed Senate Bill 284 (Property Insurance Fairness). This legislation strengthens consumer protection and increases transparency and fairness in the North Carolina property insurance rate-making process.
In an effort to better manage catastrophic risk, SB 284 sets up a new bonding authority, called the North Carolina Recovery Finance Authority, which will allow the North Carolina Insurance Underwriting Association (NCIUA) pool to minimize its dependence on reinsurance and direct more resources towards building up the surplus by issuing special tax-free bonds. However, no bonds would be issued until after a catastrophic event has actually occurred. Several other southeastern states (Florida, Texas, and Louisiana) with large coastal exposures have the ability to finance deficits in their wind pools with tax-exempt bonds. For example, in the aftermath of Hurricane Katrina, Louisiana's wind pool issued post-event bonds to enhance its claims-paying ability.
The public will have access to the annual premium and loss information from all insurers in North Carolina, separated by peril and by territory. Data will be shown by territory of what was paid in and what was paid out. Included in this bill, the Insurance Commissioner will have more latitude in setting rate levels. Another provision of this bill requires cargo insurance for those who are elevating a house. The current law only requires a house mover to be licensed/insured if they’re moving a house on a state road. The statute does not require a house mover to be insured to raise a home in preparation to move it. After Super Storm Sandy in New Jersey, movers came from all over because of the large amount of work to be done. Several homes were damaged so severely during the elevation process they had to be demolished and there was no home elevation insurance. This provision will provide protection for North Carolina Homeowners who need to raise their homes.
We confirm the Coastal Property Insurance Pool may spend appropriations on mitigation programs to prevent or reduce the exposure of policyholders to the risk of loss. Additionally, we require adjusters to disclose their principal. Thus, this will allow the consumer to know whether or not the adjuster works for the insurance company. This meaningful comprehensive property insurance legislation will greatly improve the fairness and transparency of the property insurance rate-making process while ensuring affordable rates for ALL North Carolina policyholders.
During the 2016 short session, we passed legislation requiring more than one model must be submitted in a rate filing. When a rate increase is requested, the Rate Bureau justifies its request in part by way of “loss modeling.” We also strengthen the guidelines of consent-to-rate letters to help ensure that North Carolinians have an understanding of what they are actually consenting to should they decide to sign a consent to rate letter provided by their policyholder. A healthy economy is dependent upon affordable property insurance coverage.
Last week, several members of the N.C. Senior Tar Heel Legislature visited the office, and all eight counties of Senate District 1 were represented.
Senator Phil Berger welcomes leaders of our state’s number one industry to Raleigh for Agriculture Awareness Day last Wednesday.
Senate Passes Bill to Put Constitutional Amendment to Keep Income Taxes Low on Ballot
The North Carolina Senate passed bipartisan legislation last Tuesday that would let voters choose whether to amend the North Carolina Constitution to keep income taxes low. If the bill becomes law, voters will consider a constitutional amendment on the November 2018 ballot to lower the maximum personal income tax rate in North Carolina from 10 percent to 5.5 percent (current rate 5.499%). The amendment does not limit the growth of state government spending based on changes in population and inflation – a provision erroneously described by critics as TABOR. North Carolina suffered from the some of the highest taxes in the Southeast during Gov. Roy Cooper’s days in the General Assembly, and since he says he doesn’t want to raise taxes, he should enthusiastically support this proposal. But if not, it will reinforce why this amendment is needed to keep spendthrift politicians from returning to the days of high taxes and multi-billion dollar deficits.