N.C. Commissioner's Race Underway

Speaking to NU Online, both Democratic candidates offered a generally positive view of the insurance market in North Carolina, but they also see areas that are in need of improvement.

Mr. Goodwin plugged his experience and endorsement, while Mr. Smith called for change and said he wants the department to have an apolitical focus.

The insurance market areas cited by both candidates as in need of improvement include updating the auto insurance rating process in a way that increases competition while maintaining consumer protections.

Also mentioned by the two is the need to ensure that the industry is adequately prepared to handle the effects of a strong hurricane hitting the state's coast.

Regarding auto insurance, Mr. Smith said one problem is that around a quarter of the state's drivers are insured through the Reinsurance Facility, which is the state's residual market.

Part of the reason for this, Mr. Smith said, is how the rate process works, and he proposed giving carriers more flexibility on rating, particularly for people with bad driving records, and modernizing the state's rating system.

While he said a solution would not likely involve changing the state from a prior approval system to file-and-use, he proposed instituting a 12-month limit on the rate review process.

He noted that three times in the last 12 years the process for approving an insurer's rates took almost three years. A 12-month limit, Mr. Smith said, would help the department give prior approval before the rates become affected by a delay.

Mr. Goodwin stressed the need to work on some "reasonable changes in the structure so that we can have more choices for consumers and also maintain reasonable and fair insurance rates."

He proposed to accomplish this goal through incremental changes to the current system and by looking at plans that have worked in other states and determining if they would help the North Carolina market.

Mr. Goodwin said, "If elected as the next commissioner, I want to obviously look at what is working in North Carolina and what may need to be changed–but I would not advocate for any wholesale change unless I, and the industry and the Legislature, are assured that there would be no unintended negative consequences for the market."

On coastal homeowners insurance issues, both candidates cited a need to work with the industry to strengthen reserves within the state's Beach Plan, the state's residual market for residents in coastal counties.

Mr. Smith said conservative estimates project that a Category 3 hurricane hitting the North Carolina coast would account for at least $4 billion in losses. Both candidates agreed that the Beach Plan is not prepared to handle a loss of that magnitude.

Beyond auto insurance rating reforms and coastal homeowners issues, the candidates offered differing perspectives on areas that would receive attention from the Department of Insurance.

Mr. Goodwin said he would work to crack down on insurance fraud. "With the economy the way it is," he said, "one should, unfortunately, expect an increase in fraudulent activity." He said the state needs to promote its fraud report line better than it has in the past, and also work more closely with local law enforcement as well as federal officials.

Mr. Smith, meanwhile, said that getting the department more involved in health care issues would be a top priority should he be elected. He said, "My background is [that] I've worked on a lot of health insurance-related issues for about 16 years. And so putting that on the agenda for the department would really be a top priority [in terms of] addressing the number of uninsured."

Making a final pitch to the voters, Mr. Smith said he has been interested in seeking this position for about 10 years. "For me, running for insurance commissioner is the culmination of an opportunity in my mind to really make a positive change in the department by putting some attention on health care issues, reducing the number of uninsured in North Carolina, and bringing a fresh focus on how things could be done best, and frankly apolitically, within the department."

He also cited his experience dealing with insurance issues from the perspectives of consumers, insurance companies and government.

Mr. Goodwin cited his experience within the department, as well as within the legislative community. He said, "I am the only candidate who offers management experience within the department….I'm also the only candidate that has legislative experience, which is necessary if you're going to promote change or prevent harmful legislation."

"And I'm the only candidate for insurance commissioner who is endorsed, not only by the current insurance commissioner, but also by leading officials in both the insurance industry and in communities across the state."