Rates Reduced 8 Millions
North Carolina among first states to pro¬
vide public hearings on proposals to review
insurance rates.
The 1949 Legislature of North
Carolina was a pioneer when it pro¬
vided for the holding of public
hearings before the Commissioner of
Insurance on proposals to review insur¬
ance rates. Since that time some forty
public hearings have been held by
the Commissioner of Insurance to con¬
sider many problems affecting the
cost of insurance in North Carolina.
The majority of these public hearings
involve consideration of proposed
changes in the rate to be charged for
the various lines of insurance.
The changes approved since July.
1949, to date, have reduced the annual
cost of insurance SI 2.699,000. This
was offset by increases totalling $4,-
308,000. leaving a net gain for policy¬
holders of over $8. 000.000.
These public hearings were called
to consider filings made by the various
A
THERE MUST BE
A REASON!
Г
These agents insist on their clients'
loss claims being handled promptly.
That’s one reason they elected to repre¬
sent SOUTHERN FIRE. It is a strong
and reliable North Carolina company
within easy reach and whose officers and
stall they know personally. These agents
demand and get from SOUTHERN FIRE
the prompt attention which helps them
give their clients the service they
deserve.
In return, these agents have enabled
SOUTHERN FIRE to enjoy a twin dis¬
tinction. Youngest of all North Carolina
fire insurance companies in years of
operation. Largest of all North Caro¬
lina fire insurance companies in amount
of fire insurance written in North
Carolina.
For experienced counsel, prompt serv¬
ice. and reliable protection . . . see vour
SOUTHERN FIRE agent.
TO AGENTS — If the Southern Fire is
not represented in your community ond
you wont to join this list of progressive
agents, write to us.
«»/
WALDO C. CHEEK
N. C. Commissioner of Insurance
Rating Bureaus with the Department
of Insurance proposing changes in the
rates for the lines of insurance under
their jurisdiction. In order for each
of these bureaus to determine what
changes are in order, it is necessary
for them to gather from the insurance
companies statistics indicating the
amount of premiums collected and the
amount paid out in losses in North
Carolina for each year. In order
that these statistics can be evaluated,
it is necessary for these Bureaus work¬
ing in conjunction with the Insurance
Department to determine what por¬
tion of the premium dollar is avail¬
able to pay losses, that is, how much
money of the premiums received by
the insurance companies must be al¬
located for the payment of its ex¬
penses such as agent’s commissions,
administration, bureau assessments, li¬
cense taxes and fees as well as an
allowance of a reasonable amount for
profit and contingencies.
Once this has been decided upon,
the only factor which will affect the
rate is the amount the insurance com¬
panies pay out in losses for the
particular line of insurance being re¬
viewed. In the field of fire insurance
for instance, at the present time 50
per cent of the premium dollar is avail¬
able to pay losses and the remaining
50 per cent is allowed to cover the
companies' expenses as well as a rea¬
sonable margin for profit and contin¬
gencies. Thus, if the experience shows
that the companies as a group have
paid more than 50 per cent for losses
in any five year period for fire insur¬
ance. the rates have been too low and
this indicates that a rate increase
should be made. However, if the com¬
panies have paid less than 50 per cent
of the premiums received for losses it
means that the rate has been too high
and that a decrease should be made.
Thus, it should be apparent that if
the people of North Carolina are dili¬
gent in their efforts to reduce losses,
it will have its desirable affect upon
the rates for fire insurance. The same
principle would be applicable to any
other line of insurance.
An example of the above principle
was the increase of 52,142,000 which
was recently approved for Automo¬
bile Bodily Injury and Property Dam¬
age Liability Insurance. Two years
ago the experience in this line of in¬
surance indicated that a decrease of
S2,2 1 1 ,000 was in order. The recent
increase was the result of an increase
in the number of accidents in the
last two years as well as the increase
in the cost of these claims. To the
extent that the accident frequency
or the average cost for settling claims
increases, it is necessary that appro¬
priate increases in the rate be made.
ANSWERS TO DUKE QUI7,
1. (c) Davidson;. 2, (d) Pitt; 3, (d)
Greensboro; 4, (c) striped bass; 5, (a)
John White; 6, (b) Hereford; 7, (b)
Nlorchcad City; 8, (c) peanuts; 9, (d)
Schcnck-Warlick; 10. (b) Lake James.
THE STATE. APRIL 19. 1952
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