Two hundred and twenty-six years ago this week, two prominent citizens and a 30-year-old represented the people of North Carolina by signing what has come to be the oldest written constitution still in effect today. The youngster, Richard Dobbs Spaight, had attended every session of the Constitutional Convention in Philadelphia, and it was he who suggested that the senators representing the United States be selected by state legislatures, as they were until passage of the Seventeenth Amendment a hundred years ago. (A lot of knowledgeable people think that the founders got this right, and that many of the problems we see today were spawned by the move to popularly elected senators.)
Another of the delegates from the great state of North Carolina, Hugh Williamson, was a doctor, scientist and Presbyterian minister who served as North Carolina’s surgeon general during the Revolutionary War. He was responsible for the suggestion of six-year terms for the senators, and was one of the delegates who put together the impeachment process that was in the final draft.
The third delegate, Joseph Blount, is well-represented today by name all over the capital, and eventually became the first governor of Tennessee, which he owned a decent chunk of as a land speculator. (I am indebted, as are we all, to Dr. Troy Kickler, founding director of the North Carolina History Project, for his scholarship on these signers of the Constitution.)
As we celebrate Constitution Day in North Carolina and in its sister states (which have increased fourfold in the meantime) let us pause to consider another legendary lawmaker of much more recent vintage; who only departed this earth in 1999 at age 80. State Sen. Ken Royall was elected majority leader as a freshman on the strength of his record in the state House of Representatives. One of the most powerful legislators in the South for decades, Royall left a legacy that I’d like to considered in relation to one particular public policy issue.
Nearly a quarter-century ago, Ken Royall and some of his legislative colleagues recruited a talented staffer from the National Conference of State Legislatures who was a computer genius, and got him to move to North Carolina. One of the reasons Royall gave the man was his embarrassment that, only a few miles from Research Triangle Park, the state Legislature was one of the least-advanced technologically among all the states. Royall recognized modernization as critical, and he wanted something state-of-the-art.
Because of visionaries like Sen. Royall and those who served with him, we confront fewer examples today of North Carolina lagging the rest of the states in any meaningful way. Yet there is one area where North Carolina is the last state in the union to modernize, and this is being addressed in the current General Assembly.
Years ago, it seemed like a good idea for states to set up state-regulated rating bureaus for property and casualty insurance rates, particularly auto and workers’ compensation coverages. These combines, managed by the insurance companies who sell the coverages, set common rates for the entire state, as opposed to allowing the companies to set rates according to their own competitive instincts and abilities.
There are ways you can deviate from the state price, but a company always goes to market starting with the state-made rate. It’s a little like putting in an extra tribute for the godfather’s nephew in a neighborhood where organized crime has whittled down the competition. One cannot seriously say the system is “broken,” because residents of the Tarheel State are still able to take advantage of good rates compared to other states for many reasons that will continue to impact overall prices favorably.
You can call it corrupt, though, in a sense, because it is a system where most drivers don’t get the rate they deserve – high or low. Good drivers are paying more than they would if the market worked like other states, and drivers projected to incur higher losses are paying less than they would in the competitive world outside North Carolina.
An elected insurance commissioner still approves the rates, although many states have moved to a system where smaller pricing changes can be accomplished quickly in response to the market and without all of the cost of the regulation.
The free-market lawmakers who have been elected in large numbers in recent elections have been responsive, and even daring, with their legislative agenda in the current session, and something may yet be done about this. Before there was ever a Wall Street, there was competition, and it has been a fabulously successful way to organize markets. Laws affecting the cost of auto insurance are amended almost every year in every state. Most everything has been tried, and some things many times. It is time to allow North Carolinians the opportunity to take advantage of modern insurance products offered in other states where the providers are not in thrall to the last vestige of the rate bureaus for auto insurance.