From SNL Financial:

While not bad steps to take, the Apodaca bills do not go far enough to open up the marketplace, R.J. Lehmann, a senior fellow with the free-market R Street Institute, told SNL.

The Senate legislation allows for modernization steps that have a broad industry consensus, unlike competing legislation that would replace the state’s rate bureau system with a flex-rating plan. That legislation pits Nationwide Mutual Group — the state’s largest private passenger auto insurer by market share — and allies that support the status quo against a group that includes State Farm Mutual Automobile Insurance Co. and Allstate Corp. The House Insurance Committee rejected that plan April 16. Its Senate counterpart is currently held in the Senate Rules and Operations Committee.

“It doesn’t necessarily kill the bill, but it moves it closer to the category of life support,” Goodwin said.

The legislative action is a setback to supporters of opening up an “antiquated” system, Lehmann said. North Carolina is the only remaining state that holds to the rate bureau model, under which all auto carriers are treated as one in filing rates. “In any other context, we’d call that a cartel,” he said.

The main political obstacle to large-scale changes, which have fallen short in previous years, is that the state’s insurance rates are among the lowest in the nation, Lehmann said. Unlike Goodwin and industry supporters of the rate bureau, R Street believes that is solely due to other factors, including a relative lack of road congestion and enacted tort reforms. Lehmann noted that the state’s commercial auto insurance market, which does not utilize the North Carolina Rate Bureau, also has very low rates.

While R Street and other supporters believe consumers and insurers would both benefit from a change, “Politically, it’s a very difficult sell,” Lehmann said. “It’s difficult to tell people there’s a problem when their rates are relatively reasonable.”

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