Transcript Slide 1

NORTH CAROLINA
DEPARTMENT OF INSURANCE
Wayne Goodwin, Insurance Commissioner
Remarks to the
North Carolina Beach, Inlet and Waterways Association
(NCBIWA) and Coastal Local Governments Annual Meeting
March 31, 2009
Brief Background of
Commissioner Goodwin
• Insurance Commissioner since Jan. 10,
2009; Richmond County native
• Previously served as Assistant Insurance
Commissioner for 4 years
• State Representative for Richmond,
Scotland, Montgomery and Stanly
Counties for 8 years
• His team saved consumers >$4.5 Billion
Outline of Today’s
Presentation
1.
Overview of State Government
2.
3.
4.
Overview of DOI
Recent DOI Legislation
DOI Functions and DOI Issues of Interest
5. Q&A
But first, let’s have a quick
overview of State government
…
Internet sources for you:
• www.ncgov.com
• www.ncleg.net
• In summarizing State government –
or federal government for that
matter – we must identify the three
branches of government
• Executive, Legislative, Judicial
• Each branch has certain checks and
balances on the other, just as you
learned in high school civics class.
Executive Branch – Governor’s
Mansion
Executive Branch – Governor’s
Office, State Capitol
… it also contained the House
and Senate chambers until
1963.
Executive Branch functions?
• Executes the laws
• Administers the levers of government
• Its leader is the Governor, our state’s
Chief Executive
Executive Branch includes the
Council of State
• The Council of State is comprised of the
Governor and 9 other officials elected Statewide
every 4 years
• They include: Council of State
• Council of State includes Lt. Governor, Attorney
General, Treasurer, Auditor, Insurance
Commissioner, Superintendent of Public
Instruction, Labor Commissioner, Agriculture
Commissioner, Secretary of State
Legislative Branch
House and Senate
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Speaker of the House
President Pro Tempore of the Senate
Permanent Committees
Study Committees and Select Committees
Filing legislation
Procedure
How a bill becomes a law
Judicial Branch
The Chief Justice
of the Supreme Court
• Like the Governor over the
Executive Branch and the
Speaker/President Pro Tem
over the Legislative Branch, the
Chief Justice leads the entire
Judicial Branch
• Elected by the people; if a
vacancy, then appointed by the
Governor
• Chief Justice Sarah Parker
Judicial Branch includes …
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NC Supreme Court
NC Court of Appeals
Superior Courts
District Courts
Small Claims Courts (magistrates)
Now let’s zoom in on …
… Your North Carolina Department of
Insurance
Created in 1899
Agency head = Commissioner of
Insurance
Mission & Purpose?
►To execute the insurance laws of the state
–
Including regulating the business of
insurance, challenging unreasonable rate
requests
►See Chapter 58
►More duties of the department outlined later
Dual duties of your
Insurance Commissioner:
To ensure affordable, accessible
insurance for consumers
Statewide AND a solvent,
competitive, well-regulated market
So how does the Department of
Insurance and the Insurance
Commissioner do this?
NC Department of Insurance
Five Funds/Groups:
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Administration
Company Services Group
Technical Services Group
Public Services Group
Office of the State Fire Marshal
Administration
– Administrative
– Legal
– Public Information
– Controller’s Office
– Personnel
– Information System
– Eastern Regional Office
– Western Regional Office
Company Services Group
– Actuarial Services
– Financial Evaluation
– Regulatory Actions
– RAD Trust
Actuarial Services
•assists in the review
of rate, form, and
statistical filings
•conducts actuarial studies for financial
evaluation work
•involved in special projects and studies.
Financial Evaluation Division
•Make sure companies are
financially sound
•Ensure fair treatment of
policyholders
•Examine experience of management
•Review quarterly financial statements
•Conduct regular audits
Regulatory Action
Division
& RAD Trust
• Rehabilitation
• Liquidation
Technical Services Group
– Life & Health
– Health Care Review Program
– Market Regulation
– Property & Casualty
– SHIIP (Seniors’ Health Insurance Information
Program)
Life & Health Division
• Review and approve rates,
rule and policy form filings
submitted by life and health
insurance companies.
• Monitor and analysis local, state and
national health trends
• Regulate the activities of
third party administrators.
Healthcare Review Program
External review services which
consist of independent medical
review of health plan and
offers another option for resolving
coverage
disputes between
a covered person
and their insurer.
Market Regulation Division
Conducts field
examination and
analysis of the
market practices of
domestic and
foreign insurers
and their
representatives.
Property & Casualty Division
Review rates, rules and
policy form filing relating
to property and casualty
coverage.
Seniors’ Health
Insurance
Information
Program (SHIIP)
Train adult volunteers to help older adults
through the maze of Medicare regulations,
Medicare Part D, Medicare supplement
insurance, long-term care insurance and
claims procedures
Public Services Group
– Agent Services
– Consumer Services
– Investigations
Agent Services
• Regulate agents, brokers,
limited representatives, appraiser,
adjusters, premium finance
companies, collection agencies,
motor clubs, bail bondmen, surety
agents and bail bond runners.
• Pre-licensing, continuing education, agency
examination and administrative actions.
Consumer Services Division
Provide assistance regarding varies
insurance issues to consumers,
employers, healthcare providers and even
insurance professionals.
Investigations Division
• Investigate complaints with possible
criminal charges
• Power of arrest
• Carry weapons
Office of State Fire Marshal
– Engineering
– Manufactured Building
– Risk Management
– Prevention, Programs & Grants
– Fire & Rescue Training and Inspections
– State Fire & Rescue Commission
Engineering Division
Seven sections
– Code consultant
– State property plan
review
– Mechanical
– Home inspection
– Inspector certification
– Building code council
– Handicapped
accessibility
Manufacturing Building Division
• Assure construction standards for
manufactured homes are maintained and
warranty obligations are met.
• License the makers
of manufacturer
homes, dealers,
sales representatives
and set-up
contractors.
Risk Management Division
• Insures all state-owned property
• Places coverage for other types of
insurance for state agencies and
universities
• Inspect all state-owned facilitates
for fire and safety
• Inspect all new state-owned
facilities for electrical code
compliance
• Assist local governments with
property and casualty programs
• Public Officers and Employees
Liability Insurance Commission
(POELIC)
Prevention, Programs & Grants
• Fireman’s Relief Fund
• Rescue Relief Fund
• Administers matching
dollar-for-dollar grants to
volunteer fire departments
and rescue squad
• Offers fire prevention
education in the public
schools
Fire & Rescue Training and
Inspections
•Train and certify fire and rescue personnel
Fire & Rescue Training and
Inspections
Teach specialized techniques,
such as high angle rescue,
collapsed building rescue, swift
water rescue, ice climbing and
helicopter rescue.
State Fire & Rescue Commission
• Developing voluntary certification
programs and professional standards for
all level fire and rescue personnel
• Development and dissemination of the
Occupational Safety and Health Standards
for Fire Department and Rescue Squad
• Volunteer Safety Workers Comp Fund
Other Board & Commissions
• NC Code Officials Qualifications Board
(COQB)
• NC Building Code Council
• Home Inspectors Licensure Board
• Manufactured Housing Board
• Public Officers and Employees Liability
Insurance Commission (POELIC)
… one more duty, as of the 2007
NC General Assembly
Starting in 2009, the Insurance
Commissioner / State Fire Marshal will
begin regulating compliance of all
cigarettes sold in NC with the standards
established in NY for fire-safe cigarettes. …
Fire-safe cigarettes are a proven, practical, and
effective way to eliminate the risk of cigaretteignited fires. The use of cigarettes that have a
reduced propensity to burn when left
unattended will help prevent tens of thousands
of cigarette-ignited fires each year. The use of
such "fire-safe" cigarettes is already required in
New York, California, and other States
(covering 25 percent of Americans) and in all of
Canada. North Carolina joined these and other
States as federal model legislation is being
pursued.
This new law has the cooperation of the
tobacco industry.
NC DOI Website
http://www.ncdoi.com/
Recent DOI Legislation of Note
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2007 Session of the NC General Assembly
High Risk Insurance Pool
Rate Evasion
More grant $ for volunteer fire departments
Fought off attempts by insurance company
executives to strip the Insurance Commissioner
of his authority
• 2009 DOI Legislation for consideration by the
NC General Assembly
Now let’s
consider
additional
specifics
regarding the
State Building
Code
Building Codes and
Emergency Preparedness
Building Codes Involve
State and federal laws
This was the title of a relevant talk I gave to another
group last year.
• The purpose of the building codes is
to provide minimum requirements to
safeguard life or limb, health and
public welfare
What does State law require
regarding the State Building Code?
• GS 143-138 states:
• “North Carolina State Building Code may
include reasonable rules pertaining to the
construction of buildings and structures and
the installation of particular facilities therein
as may be found reasonably necessary for
the protection of the occupants of the
building or structure, its neighbors, and
members of the public at large”
One topical example of where the
Code has become a point of
conversation, debate, and legislative
consideration, particularly in coastal
North Carolina:
How will the Tar Heel State be most-prepared
for hurricanes?
Current Code Requirements
Prior to January 1, 2006 there was no
requirement for wind borne debris
protection
The requirement for wind borne debris
protection first appeared in the 2000
International Code
See next several slides …
Because of the process - a process
not controlled by DOI but the Building
Code Council and the Legislature - NC
has been behind almost all other
coastal states in updating its codes
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The 2002 North Carolina Codes deleted the requirements for wind
borne debris protection that were included in the 2000
International Codes
•
Why does that matter? Lack of uniformity makes it difficult for
builders and gives insurance companies a strong reason to have
higher insurance premiums for homes along coastal NC
With input from homebuilders, contractors,
insurers, the federal government, and DOI …
Progress is being made in a way that helps
homeowners, homebuilders, and realtors.
• Effective January 1, 2006 wind borne debris
protection is required within 1500 feet of the Atlantic
Ocean
• As of the December 2007 quarterly meeting of the
Building Code Council, protections from windborne
debris also covers the barrier islands ...
What parts of NC would be subject to
wind-borne debris protections?
• International Residential and Building
Codes require wind born debris protection:
– 140 mph wind zone (Bald Head Island)
– 130 mph wind zone
– 120 mph wind zone
– 110 mph and within 1 mile of the ocean
Note: This is NOT just the coast – The
mountains of western NC are also affected.
Windborne debris protection
may be provided by one of
three methods
►Impact resistant glazing
► Storm shutters
► Plywood 7/16” thick covering
openings and fastened by screws to
structure
Some interesting facts …
• Plywood costs approx. $30/sheet
• Sheet is 4’ x 8’ panel
• Assume 1 sheet of plywood cover two
openings
• Average house has 20 openings & 2 doors
• 12 sheets of plywood X $30/sheet = $360
• $250,000 house cost = 0.14% increase in
cost
Consider this:
• The minimal cost of even plywood shutters
– much, much less expensive than other
options - will not have a negative
economic impact on the homeowner
• In fact, using such protections could
potentially save the homeowner much
more
Meanwhile, …
• This issue has been before the NC Building
Code Council numerous times
• Some of the windborne debris protections
followed by other coastal states have been
rejected or lessened by the state’s Building
Code Council
• If the issue is not resolved to the satisfaction of
homeowners, homebuilders, realtors, insurors,
local governments, and inspectors, then there
may be a legislative solution in the future.
• We are hopeful that continued progress will
prevent intervention by the legislature.
Things to consider:
• Small up-front cost to consumer
• Or huge financial burden for state and
local government after a disaster
• Do we risk losing assistance from FEMA?
• Studies by FEMA show that for every $1
spent on wind borne debris mitigation $5
are saved
Coastal states that have adopted
the ICC provisions for wind
borne debris protection
South Carolina
Georgia
Texas
Mississippi
Missing: North Carolina
Alabama
Florida
Louisiana
Virginia
In addition to the safety
of homes, businesses,
and public buildings, …
• DOI work also impacts Homeland
Security
More specifically …
• The fire code was modified this last edition to provide
protection for first responders. In the past, we had only
addressed the safety of the building occupants.
• The code has to be integrated into security designs (the code
doesn't currently account for them). Before Deputy
Commissioner Chris Noles left private practice, his firm was
engineering protection components for the ventilation system
at the Capitol Visitor Center. The code addresses the
ventilation rates, method, etc..., but the real task is accounting
for bioterrorism, radiological, etc hazards the code doesn't
address. One other example is emergency escape through
blast-resistant windows.
• We are starting to see more modeling to determine how a fire
spreads. The labs at NIST account for the basis for much of
what appears in the code. Here is their public affair page
relating to homeland security http://www.nist.gov/public_affairs/factsheet/homeland.htm and
http://www.bfrl.nist.gov/goals_programs/HS_goal.htm
During a presentation to a group
interested in safety and homeland
security issues …
•
http://www.bfrl.nist.gov/goals_programs/HS_goal.htm
•
Building and Fire Research Laboratory (BFRL) Goal: Homeland Security
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To develop the technical basis for the standards, technology, and practices needed for costeffective improvements to the safety and security of buildings and building occupants, including
evacuation, emergency response procedures, and threat mitigation.
The strategy to meet this goal is a three-part NIST-led public-private response program that includes:
a federal building and fire safety investigation to study the most probable factors that contributed to postaircraft impact collapse of the World Trade Center (WTC) Towers and the 47-story WTC 7, and the
associated evacuation and emergency response experience;
a research and development (R&D) program to provide a technical foundation that supports
improvements to building and fire codes, standards, and practices that reduce the impact of extreme
threats to the safety of buildings, their occupants and emergency responders; and
a dissemination and technical assistance program (DTAP) to engage leaders of the construction and
building community in implementing proposed changes to practices, standards and codes. Also it will
provide practical guidance and tools to better prepare facility owners, contractors, architects, engineers,
emergency responders, and regulatory authorities to respond to future disasters.
The desired outcomes are to make all buildings safer for occupants and first responders and to ensure
better evacuation systems and emergency response capabilities for future disasters.
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More on DOI’s role regarding
security
Also a part of Homeland Security and safety is DOI’s
increased role in preparedness training.
DOI’s role with National Incident Management System
(NIMS) training, for which we do “train the trainer”.
Also the issue of national credentialing, which involves
certification of training levels being documented at the
national level with info prepared by the State.
Your NC Department of
Insurance is more than
about insurance …
… It is about safety and security – of
your home, of your business, of your
personal property, and of our Nation.
Here’s some great news …
North Carolina has the 7th lowest automobile
insurance rates in the nation – following only
States like North Dakota, South Dakota,
Idaho, Kansas and Wyoming … PLUS … NC
has the lowest auto insurance rates in the
Southeast USA !
Thank you to the
North Carolina Beach, Inlet, and
Waterway Association and all our
local officials in Coastal Carolina
for your many years of dedicated and professional service to your
communities and the State of North Carolina!
For more information on your
NC Dept of Insurance:
1-800-546-5664
(919) 733-3058 for Commissioner Wayne Goodwin
www.ncdoi.com
[email protected]
Q & A ??
The Official Toast of North
Carolina: “The Old North State”
Here's to the land of the long leaf pine,
The summer land where the sun doth shine,
Where the weak grow strong and the strong grow great,
Here's to "Down Home," the Old North State!
Here's to the land of the cotton bloom white,
Where the scuppernong perfumes the breeze at night,
Where the soft southern moss and jessamine mate,
'Neath the murmuring pines of the Old North State!
Here's to the land where the galax grows,
Where the rhododendron's rosette glows,
Where soars Mount Mitchell's summit great,
In the "Land of the Sky," in the Old North State!
Here's to the land where maidens are fair,
Where friends are true and cold hearts rare,
The near land, the dear land, whatever fate,
The blest land, the best land, the Old North State!