Flood waters like these that resulted from Hurricane Florence in in Lumberton in 2018 are a growing driver of costs and rate hikes in the insurance industry. (Photo by Joe Raedle/Getty Images)
A hearing on a proposed 42.2% average homeowner insurance increase hadn’t even begun Monday before candidates for Commissioner of Insurance — Republican incumbent Mike Causey and Democratic challenger, state Senator Natasha Marcus — traded political jabs.
Causey and Marcus held press conferences ahead of Monday’s hearing at the Department of Insurance in Raleigh. The process for deciding insurance rates can be lengthy and homeowners won’t likely know until early next year what the new rates will be.
State Sen. Natasha Marcus. (Photo: Greg Childress)
In the Department of Insurance’s parking lot, Marcus aggressively stepped up attacks on Causey’s rate hike record, doubling down on past efforts to paint the two-term commissioner and the first Republican to hold the office as an “insurance industry insider” who has forgotten that he was “elected by the people to be their voice.”
“Instead of standing up for consumers and being transparent about his decisions to raise our rates, he [Causey] instead, has met privately with insurance companies, approving 16 rate hikes in a row behind closed doors,” Marcus said. “He’s essentially told us all to simply trust that he has made us a good deal. He doesn’t think we deserve to see the data or know his reasons for allowing our insurance bills to skyrocket.”
Causey countered that he must make sure that whatever rates are requested are adequate. That means, he said, the rates are adequate for the insurance company to remain solvent and pay their claims.
“It’s not going to do anybody any good if the company’s not solvent, can’t pay claims,” Causey said. “The state law gives the commissioner the ability to negotiate a settlement and in past years, we have been successful in negotiating settlements that have been very favorable to consumers.”
Marcus also accused Causey of shirking his duties as insurance commissioner by allowing Amy Funderburk, general counsel at the Department of Insurance, to serve as hearing officer on Monday.
“It’s a ridiculous dereliction of one of the most important duties of his office,” Marcus said. “He is the elected Commissioner of Insurance, and this is the job he was elected and paid to do. Why isn’t he doing his job?”
Causey said Marcus’ claims are just part of the “silly season of politics” when asked during his press conference about the decision to allow Funderburk to hear the case.
The commissioner said his predecessors — Jim Long and Wayne Goodwin, both Democrats — also used the department’s general counsel to preside over such hearings.
The final decision on whether to raise rate would be his, Causey said. “I’ve always made those decisions and will continue to do so,” he said.
Commissioner Mike Causey. (Photo: Greg Childress)
Causey has rejected the average 42.2% rate hike request, calling it unfair to some residents. North Carolinians on the coast could see increases of more than 90% while the increase in some mountain areas would only see a 4% increase.
Causey said the devastation Hurricane Helene caused in western North Carolina could impact the rate increase.
“It very well could be, but you know, it takes a while [to know],” Causey said. “We’re just now seeing impacts from Hurricane Florence, and that was back in 2018, so we have to wait and see how it shakes out.”
Meanwhile, Marcus said that by scheduling the rate hearing close to the Nov. 5 General Election, Causey gets to dodge making a decision on the rate increase until after homeowners have voted.
She noted that Causey will have 45 days after the hearing concludes to decide what new rates will be.
“So, by delaying the start of the hearing until October 7, knowing that it will last weeks, he knows that he won’t have to make a decision on the rate hike request until after the election is over,” Marcus said. “Voters won’t get a chance to weigh in and hold him accountable about how he did his job.”
Causey pushed back against Marcus’ claims that he unilaterally approves rate hikes. He said he’s received more than 25,000 comments about the proposed increase.
“People said pretty much the same thing that inflation’s killing us, we can barely afford to go to the grocery store anymore, or fuel prices have gone crazy and local taxes are up,” Causey said.
The request for an average of 42% rate increase was made by the North Carolina Rate Bureau, which represents companies that write insurance policies. The Rate Bureau has cited a higher cost of doing business due to climate change, which produces more powerful hurricanes and more severe flooding as the reason for such a large rate increase request.
On Monday, Mickey Spivey, legal counsel for the Rate Bureau, noted that North Carolina has not had a substantial rate increase in several years. Spivey said the request for a 42.2% rate increase is needed to cover the growing cost of doing business.
“That’s a big number, but that is what is needed,” Spivery said. “We here in North Carolina are not alone. Homeowners insurance rates have gone up, and are going up, all around the country.”