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NORTH CAROLINA DEPARTMENT OF INSURANCE

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Title: NORTH CAROLINA DEPARTMENT OF INSURANCE


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
2
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 gt4.5 Billion

3
Outline of Todays Presentation
  • Overview of State Government
  • Overview of DOI
  • Recent DOI Legislation
  • DOI Functions and DOI Issues of Interest
  • 5. QA

4
But first, lets have a quick overview of State
government
5
Internet sources for you
  • www.ncgov.com
  • www.ncleg.net

6
  • 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.

7
Executive Branch Governors Mansion
8
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9
Executive Branch Governors Office, State
Capitol
10
  • it also contained the House and Senate chambers
    until 1963.

11
Executive Branch functions?
  • Executes the laws
  • Administers the levers of government
  • Its leader is the Governor, our states Chief
    Executive

12
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

13
Legislative Branch
14
House and Senate
  • 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

15
Judicial Branch
16
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

17
Judicial Branch includes
  • NC Supreme Court
  • NC Court of Appeals
  • Superior Courts
  • District Courts
  • Small Claims Courts (magistrates)

18
Now lets zoom in on
  • Your North Carolina Department of Insurance
  • Created in 1899
  • Agency head Commissioner of Insurance

19
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

20
Dual duties of your Insurance Commissioner
  • To ensure affordable, accessible insurance for
    consumers Statewide AND a solvent, competitive,
    well-regulated market

21
So how does the Department of Insurance and the
Insurance Commissioner do this?
22
NC Department of Insurance
  • Five Funds/Groups
  • Administration
  • Company Services Group
  • Technical Services Group
  • Public Services Group
  • Office of the State Fire Marshal

23
Administration
  • Administrative
  • Legal
  • Public Information
  • Controllers Office
  • Personnel
  • Information System
  • Eastern Regional Office
  • Western Regional Office

24
Company Services Group
  • Actuarial Services
  • Financial Evaluation
  • Regulatory Actions
  • RAD Trust

25
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.

26
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

27
Regulatory Action Division RAD Trust
  • Rehabilitation
  • Liquidation

28
Technical Services Group
  • Life Health
  • Health Care Review Program
  • Market Regulation
  • Property Casualty
  • SHIIP (Seniors Health Insurance Information
    Program)

29
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.

30
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.

31
Market Regulation Division
  • Conducts field examination and analysis of the
    market practices of domestic and foreign insurers
    and their representatives.

32
Property Casualty Division
  • Review rates, rules and
  • policy form filing relating
  • to property and casualty
  • coverage.

33
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
34
Public Services Group
  • Agent Services
  • Consumer Services
  • Investigations

35
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.

36
Consumer Services Division
  • Provide assistance regarding varies insurance
    issues to consumers, employers, healthcare
    providers and even insurance professionals.

37
Investigations Division
  • Investigate complaints with possible criminal
    charges
  • Power of arrest
  • Carry weapons

38
Office of State Fire Marshal
  • Engineering
  • Manufactured Building
  • Risk Management
  • Prevention, Programs Grants
  • Fire Rescue Training and Inspections
  • State Fire Rescue Commission

39
Engineering Division
  • Seven sections
  • Code consultant
  • State property plan review
  • Mechanical
  • Home inspection
  • Inspector certification
  • Building code council
  • Handicapped accessibility

40
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.

41
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)

42
Prevention, Programs Grants
  • Firemans 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

43
Fire Rescue Training and Inspections
  • Train and certify fire and rescue personnel

44
Fire Rescue Training and Inspections
Teach specialized techniques, such as high angle
rescue, collapsed building rescue, swift water
rescue, ice climbing and helicopter rescue.
45
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

46
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)

47
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 cigarette-ignited 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.

48
NC DOI Website
http//www.ncdoi.com/
49
Recent DOI Legislation of Note
  • 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

50
Now lets consider additional specifics regarding
the State Building Code
51
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.

52
  • The purpose of the building codes is to provide
    minimum requirements to safeguard life or limb,
    health and public welfare

53
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

54
  • 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?

55
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

56
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
  • 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

57
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 ...

58
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.

59
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

60
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

61
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62
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63
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

64
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 states 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.

65
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

66
Coastal states that have adopted the ICC
provisions for wind borne debris protection
  • South Carolina Alabama
  • Georgia Florida
  • Texas Louisiana
  • Mississippi Virginia
  • Missing North Carolina

67
In addition to the safety of homes, businesses,
and public buildings,
  • DOI work also impacts Homeland Security

68
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_aff
    airs/factsheet/homeland.htm and
    http//www.bfrl.nist.gov/goals_programs/HS_goal.ht
    m

69
During a presentation to a group interested in
safety and homeland security issues
  • http//www.bfrl.nist.gov/goals_programs/HS_goal.ht
    m
  • Building and Fire Research Laboratory (BFRL)
    Goal Homeland Security
  • To develop the technical basis for the standards,
    technology, and practices needed for
    cost-effective 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 post-aircraft 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 (RD) 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.

70
More on DOIs role regarding security
  • Also a part of Homeland Security and safety is
    DOIs increased role in preparedness training.
  • DOIs 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.

71
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.

72
Heres 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 !

73
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
  • Wayne.goodwin_at_ncdoi.gov

74
Q A ??
75
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!
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