NORTH CAROLINA GENERAL ASSEMBLY
1971 SESSION

CHAPTER 1115
SENATE BILL 848

AN ACT REVISING THE PRESENT AUTOMOBILE LIABILITY INSURANCE RATING LAWS TO PROVIDE FOR ADDITIONAL FACTORS IN THE RATE MAKING PROCESS AND TO REQUIRE PREHEARING ON RATE MATTERS.

The General Assembly of North Carolina enacts:

Section 1.  Subdivision (4) of G.S. 58-246 is hereby rewritten to read as follows:
"(4)	The bureau shall have the duty and responsibility of promulgating and proposing rates for liability insurance for motor vehicles which are private passenger vehicles, taxicabs, commercial cars, and for garage liability insurance as determined by classification plans promulgated by the bureau and approved by the Commissioner. The bureau also shall have authority to maintain rules and regulations and promulgate and propose rates for automobile medical payments insurance, uninsured motorists coverage and other insurance coverages written in connection with the sale of automobile liability insurance on private passenger cars, taxicabs and commercial cars and garage liability insurance, and such other jurisdiction over insurance rates, rating methods, classifications, classification assignments, forms, and rules and regulations as the Commissioner may by general regulation provide. The provisions of this subdivision shall not apply to motor vehicles operated under certificates of authority from the Utilities Commission, the Interstate Commerce Commission, or their successor agencies, where insurance or other proof of financial responsibility is required by law or by regulation specifically applicable to such certificated vehicles."
Sec. 2.  Subsection (c) of G.S. 58-247 is hereby amended by adding at the end of said subsection a new sentence reading as follows:
"The bureau shall be empowered to subscribe for or purchase any necessary service."
Sec. 3.  G.S. 58-248, as the same appears in the 1969 Cumulative Supplement to Volume 2B of the General Statutes is rewritten to read as follows:
"§ 58-248.  Personnel and assistants; general manager; submission of rate proposals to Commissioner of Insurance; approval or disapproval. — In order to carry into effect the objects of this Article, the bureau members shall elect its governing committee who shall employ and fix the salaries of such personnel and assistants as are necessary, but the general manager of the Compensation Rating and Inspection Bureau of North Carolina shall be the general manager also of the North Carolina Automobile Rate Administrative Office and the Commissioner of Insurance is hereby authorized to compel the production of all books, data, papers and records and any other data necessary to compile statistics for the purpose of determining the underwriting experience of automobile liability injury and property damage insurance and the other lines of insurance referred to in this Article, and this information shall be available and for the use of the North Carolina Automobile Rate Administrative Office for the capitulation and promulgation of rates on automobile bodily injury and property damage insurance and on such other lines of insurance as are subject to the rate-making authority of the bureau. All such rates compiled and promulgated by such bureau shall be submitted to the Commissioner of Insurance for approval and no such rates shall be put into effect in this State until approved by the Commissioner of Insurance and not subsequently disapproved. The Commissioner of Insurance in considering any rate compiled and promulgated by the bureau may take into consideration the earnings of all companies writing automobile liability insurance in this State realized from the investment of unearned premium reserves and investments from loss reserves on policies written in this State. The amount of earnings may in an equitable manner be included in the rate-making formula to arrive at a fair and equitable rate.
In determining the necessity for an adjustment of rates the Commissioner shall give consideration to past and prospective loss experience, including the loss-trend and other relevant factors developed from the latest statistical data available; to such relevant economic data from reliable indexes which demonstrate the trend of costs relating to the line of automobile insurance for which rates are being considered and to such other reasonable and related factors as are relevant to the inquiry. The bureau in promulgating and fixing rates shall consider the same factors and shall prepare and present such information, data, indexes and exhibits with rate filings.
The Commissioner shall approve proposed changes in rates, classifications or classification assignments to the extent necessary to produce rates, classifications or classification assignments which are reasonable, adequate, not unfairly discriminatory, and in the public interest. Proposed rates shall not be deemed unreasonable, inadequate, unfairly discriminatory or not in the public interest, if such proposed rates make adequate provision for premium rates for the future which will provide for anticipated loss and loss adjustment expenses, anticipated expenses attributable to the selling and servicing of the line of insurance involved and a provision for a fair and reasonable underwriting profit.
On or before July 1 of each calendar year the North Carolina Automobile Rate Administrative Office shall submit to the Commissioner the data hereinabove referred to for bodily injury and property damage insurance on private passenger vehicles and a rate review based on such data. Such rate proposals shall be approved or disapproved by the Commissioner in writing within ninety (90) days after submission to him: Provided, the Commissioner shall have at least thirty (30) days after the completion of hearings and the receipt of any additional data requested from the North Carolina Automobile Rate Administrative Office in which to consider the rate proposals.
The provisions of G.S. 58-246 to G.S. 58-248 shall not apply to publicly owned vehicles except ambulances and rescue squad vehicles which are owned and operated by a county or municipality."
Sec. 4.  G.S. 58-248.1 is hereby amended by adding at the end thereof a new paragraph reading as follows:
"At least 15 days prior to the date set for the hearing of a rate filing under this Article, the respective rate-making staffs of the bureau and the Commissioner shall meet at a prehearing meeting to review the filing and to discuss any points of disagreement which are likely to be in issue at the hearing. Any calls for additional information may be made at such time. The minutes of such meeting shall be made and shall be reduced to writing and shall become a part of the hearing record. Any agreements reached as to preliminary matters shall be set forth in writing and shall be consented to by counsel for the bureau, and the Commissioner. The purpose of the prehearing meeting shall be to avoid unnecessary delay in the rate hearings."
Sec. 5.  All laws and clauses of laws in conflict with this act are hereby repealed.
Sec. 6.  In the event the General Assembly enacts a law or laws which repeals the method of rate-making set forth in this Article, this Article shall be suspended upon the effective date of such law or laws but shall remain codified in the event of restoration of prior approval rate-making.
Sec. 7.  This act shall become effective upon ratification.
In the General Assembly read three times and ratified, this the 21st day of July, 1971.