North Carolina General Assembly Week in Review

February 2, 2024

While the North Carolina General Assembly remained out of session this week, interim committees convened to deliberate on the integration of artificial intelligence in public education and to scrutinize the state’s distinctive auto insurance system. Outside of the legislative complex, Democratic Governor Roy Cooper signed an executive order to join the National Reentry 2030 initiative, positioning North Carolina alongside Alabama and Mississippi. This initiative, led by the Department of Corrections in collaboration with other Cabinet agencies, aims to offer comprehensive reentry services to individuals released from incarceration. The ambitious goals set by Governor Cooper for 2030 include substantial increases in educational achievements and reentry assistance, alongside a marked reduction in homelessness and recidivism among the formerly incarcerated.

Auto Insurance

This week, the House Select Committee on Oversight and Reform in North Carolina convened to scrutinize the state’s unique auto insurance system, focusing particularly on the role of the North Carolina Reinsurance Facility. Joanna Biliouris, the General Manager of the Facility, was questioned for nearly two hours. Legislators probed into issues such as insurance premiums, the process of ceding high-risk drivers to the Facility, and the impact on policyholders.

The Facility, established in 1973, aims to ensure accessibility of auto liability insurance and proper premium collection, while minimizing effects on policyholders and insurance companies.

Legislators raised concerns about the system potentially subsidizing private industry and questioned the adequacy of approved rates. Biliouris highlighted that 78% of policies in the Facility are deemed ‘clean risk,’ yet these do not cover the Facility’s losses. The most recent total recoupment for six months that ended in October was $122 million, and it was $295 million for the six months before that.

The committee considered reforms similar to those adopted in South Carolina, aiming to reduce the number of ‘clean drivers’ in the Facility and address the high percentage of auto policies in the state’s reinsurance market. The hearing concluded with a push for continued exploration of potential reforms to improve the system and reduce confusion and costs for North Carolina drivers.

Upcoming Legislative Meetings

Tuesday, February 6

9:00 AM: Joint Legislative Oversight Committee on Health and Human Services
1:00 PM: Joint Legislative Oversight Committee on Agriculture and Natural and Economic Resources
1:00 PM: Joint Legislative Oversight Committee on Medicaid

Wednesday, February 7

10:00 AM House: Select Committee on Homeowners’ Associations