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NC Court Backs Decision Against Home Insurance Rate Increase

RALEIGH, N.C. (AP) — North Carolina's insurance commissioner had plenty of justification to reject a request by insurers to raise homeowners' premiums by an average of 25 percent, the state Court of Appeals ruled Tuesday.

Instead, Insurance Commissioner Wayne Goodwin imposed a zero-percent overall increase beginning in June 2015 by increasing rates for renters and condominium policyholders while lowering them for homeowners.

Goodwin determined appropriately in late 2014 that insurers were achieving a fair and reasonable profit after North Carolina homeowners saw rates rise 7 percent on average beginning in 2013, the court said.

Goodwin was acting under established law by considering only what insurance companies were earning from policies, and excluding the gains or losses they made by investing the money, the court said.

"The order reflects a careful, thoughtful, and thorough consideration of the evidence," Judge J. Douglas McCullough wrote for the three-judge panel.

It's too early for insurance companies to say whether they will appeal to the state Supreme Court, North Carolina Rate Bureau General Manager Ray Evans said Tuesday.

The Rate Bureau sought an overall increase of about $500 million in homeowners' premiums in 2014 to cover expectations of a sharp rise in repair and replacement costs and the growing risk of catastrophic losses from severe weather. Insurers complained that premiums were inadequate to make their risk worthwhile.

None of this has stopped insurers from raising rates meanwhile. Insurers have increasingly refused to issue policies unless homeowners sign an agreement accepting rates higher than those set by Goodwin's office.

Such policies expanded in 2013 to 30 percent of North Carolina's $2.4 billion homeowners market, up from 23 percent in 2010, according to state Insurance Department data.

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