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N.C. Senator proposing big changes for auto insurance

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RALEIGH -- A North Carolina senator is proposing some big changes to the way auto insurance rates are calculated. He wants to take away the state insurance commissioner's ability to control insurance rates. If the bill presented in State Senate Tuesday is passed, North Carolina's business court would be in charge of deciding standard insurance rates, instead of the insurance commissioner. Sen. Tony Rand said, "It is going to cost some people who are not a good risk to go up. But those people who are good risk should not have to subsidize for those people who are not." Sen. Tony Rand says more than one and a half million drivers are a "bad risk to auto insurance companies." Those people are placed in what is called the reinsurance facility. N.C. Insurance Commissioner Jim Long said, "We had to have a place to put people who could not afford the rates because of their driving record and the facility takes care of that." Rand says to keep bad drivers insured other drivers have to pay about $250 million a year. Sen. Rand said, "We shouldn't have to do that. Eighty-four percent of the people are having to subsidize the 16 percent. I don't think we should have to do that and I don't think this should be the case." Rand is proposing a bill to reduce the number of drivers in the reinsurance facility. It would also allow North Carolina's business courts to control standard insurance rates -- a job Insurance Commissioner Jim Long has done for the past 22 years. "If you take the insurance commissioner out of the rate setting process, sure your rates may go up because under this legislation," Long said. "No longer would I be able to protect you from companies trying to charge too much money."

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