First, allow me to tell you about Nationwide, and a little bit about me.

Make no mistake, Nationwide Insurance is committed to North Carolina. We’ve been doingbusiness in North Carolina for more than 83 years. Our insurance mission is simple: we serveour customers here and across the United States working to become their trusted advocate byprotecting what’s most important to them. We’re a full service property and casualty insurerwith more than 1.2 million policyholders in the state. Of those, nearly 670,000 are automobilepolicyholders. We employ 1200 Associates, 381 principal agents, and 1600 associate agents in592 different locations across North Carolina.

Nationwide is proud of it’s heritage as a mutual insurance company, having its roots in thecollective purchasing power of fiercely independent, rural farmers. In 2012, we can still say thatwe care about our business, but we also care about our members, communities, producers,agents, and associates. Our mutual heritage and viewpoint give us an ability to focus on thingsbeyond our bottom line. So when we say we’re more than a business, we actively back up thatstatement every day.

As for me, I am born, raised, and educated here in North Carolina. I graduated from AtlanticChristian College, now Barton College, in Wilson. I grew up in an insurance household. My father was a career sales manager with Nationwide Insurance and I followed in his footsteps.  Providing and managing insurance is all I have ever done, and all I ever wanted to do.

I am proud to say I’m in my 32nd year with Nationwide.I started as an agent, and then was given the opportunity to move into a variety of leadershiproles at Nationwide as a sales manager, sales officer, vice president in three different regionaloperations, and three tours of duty at our corporate headquarters, including leading the company’s sales organization. As an agent I was an advocate for our members and still see thatas my most important role.

My first field sales management experience was in Charlotte for five years in the 1980s.  Along the way, my career has taken me to Florida, Alabama, Texas, Maryland, and Ohio.

It is my great privilege to have come home to lead Nationwide’s North Carolina regionaloperation since 2007.

I am a practical, hands-on insurance executive who understands the competitive market and theneeds of the consuming public. From that perspective, I’d like to share with you my opinions onthe certain consequences and the potential unintended consequences of proposed legislation (likeSB 490) that would radically dismantle our state’s auto insurance ratemaking system.

Here are known consequences of enacting SB 490 or similar legislation:

• About 992,000 North Carolina policyholders would face an increase in their automobile insurance premium. This is undisputable.

• These drivers are “clean risks” presently assigned to the NC Reinsurance Facility, ourstate’s residual market. Clean risks are drivers with no insurance points (chargeable convictions). For various reasons, these drivers are ceded and state law requires thatthey be charged the rate approved by the Commissioner for individuals withoutinsurance points.

• Right here in Wake County, where Nationwide is headquartered, almost 57,000 driverswould pay higher bills from now on.

• In fact, if you were to abolish the North Carolina Reinsurance Facility tomorrow,the average uptick in premium for every “Clean Risk” now written in the Facilitywould be $150/policy!

• Hundreds of thousands of North Carolina families with high school and college driverswill pay more to insure them.

• And, the elected Commissioner of Insurance will lose his authority to prevent automaticrate hikes for consumers, who by state law are required to buy auto liability insurance.

There likely will be UNINTENDED consequences, as well:

• North Carolina’s historical auto rate stability will be extinct.

• In its place will come changing rates, both high and low. Consumers will no longer beable to compare insurance quotes on an apples-to-apples basis.

• Every company will rewrite its auto insurance contracts, discarding the common RateBureau policy and forms, which surely will result in more costly consumer litigation.

• The number of uninsured motorists will rise, reflecting the higher premiums charged tosome drivers who will no longer be able to afford coverage.

• The cost of uninsured drivers will work its way back into the rates of the rest of us whobuy auto insurance.

• While some claim that North Carolina’s auto insurance system is broken – despite ourvery low rates and highly competitive market – I think real problems lie elsewhere. Ifyou “dismantle” the auto insurance rate making system, it will surely have an impact onother lines of insurance. Except for a few auto only companies, most of us in this roomprovide property coverage as well. Be prepared for the unintended consequences of remakingone system of insurance coverage and not the other.

Let’s take a step back and look carefully at where North Carolina stands. There has been muchdiscussion about our unique auto insurance system’s pros and cons. Our system is not perfect –none are — and, it is admittedly unusual. But, from the eyes of North Carolina consumers,auto insurance appears to work really well for 6.5-million North Carolina drivers.

But for the sake of argument, let’s suppose you were starting from scratch, aiming to design anexcellent auto insurance system for North Carolina citizens. What if I could promise to deliverto you a system with these features:

• The lowest auto rates in the entire Southeast

.• A market so attractive and competitive that almost 170 companies would open up shophere.

• A guarantee of core consumer protections, including independent oversight and noautomatic rate hikes, for a product the law requires drivers to purchase.

Surely, the vast majority of North Carolinians would want such an effective, affordable system.

Oddly enough, this is precisely the auto insurance system in place in North Carolina today.

Those who seek to scrap our system claim that the result will be lower prices for consumers.Two simple facts call into question these claims:

• First, all North Carolina auto insurers are already free today to offer lower prices to anycustomer without General Assembly intervention. Under our current system, premiumdiscounts are already allowed by law. No auto insurer needs new laws to lowercustomer rates.

• Second, despite our state’s growing population, and its numerous urban areas whereaccidents often occur, auto insurance rates in North Carolina are the eighth lowest inAmerica … the lowest anywhere in the Southeast … and the lowest among ournation’s 10 most populous states.

In fact, rates are so good in North Carolina that the General Assembly had to pass a law in 2007 to keep people from other states from coming here to buy their insurance at North Carolina’slower costs.

In addition, North Carolina has a highly competitive auto insurance market. Almost 170 insurers sell auto insurance in North Carolina, including 72 new ones in the past five yearsalone. Think about it: That’s a separate insurer for every single member of the GeneralAssembly. How many other markets of any kind in North Carolina have so many thriving competitors?

For insurers and consumers alike, our state is the envy of many others. The fact is that wehave a very healthy, stable, competitive, low-cost, and diverse auto insurance market, withlots of product choices and sensible protections for North Carolina’s consumers.

You’ve heard criticism about our state’s large Reinsurance Facility, which is a safety net createdby the General Assembly to guarantee insurance to all drivers. The Facility provides affordablecoverage to drivers with key risk factors and coverage to those with moving violations andaccidents. There might be prudent ways to reduce the number of drivers reinsured in theFacility, but let me be clear on 3 points:

• First, our state’s almost 170 auto insurance companies can (and do) charge significantlyhigher rates to drivers with convictions for motor vehicle violations and accidenthistories. These high-risk drivers, measured objectively on their actual driving record,pay more premium.

• Second, the additional cost to all consumers of insuring “clean risks” in the ReinsuranceFacility, a surcharge of only about 4 percent on liability coverage, amounts to an average5of only $17 dollars a year or $1.40 per month based on the most recent data. Even with this small surcharge, North Carolina’s auto insurance rates still are the eighthlowest in America, the lowest anywhere in the Southeast, and the lowest among the10 biggest states.

• Third, our residual market protects all North Carolina drivers. By encouraging moredrivers to buy affordable insurance, it means there are fewer uninsured drivers on ourstreets and highways.

So here’s my bottom line. Nationwide supports our state’s healthy, robust, competitive,diverse, and low-cost auto insurance system in North Carolina, governed by reasonableconsumer protections.

Though we are fierce rivals in attracting and keeping customers, Nationwide works alongside ourindustry competitors on many public policy initiatives. We respect our competitors. We simplyDISAGREE with some of them about the need to change the present auto insuranceratemaking system in North Carolina.I speak candidly and respectfully with industry knowledge and years of experience. My realworldexperience tells me to urge that you use extreme caution as you weigh the merits of what’spresented today.

If you really want to know what keeps me awake at night, as regional vice president of thelargest property and casualty operation in North Carolina, I can tell you it’s not the autoinsurance regulatory system. Instead, it’s the 7 weather catastrophes that hit North Carolina lastyear; the more than 46,000 claims those storms produced for Nationwide and our customers righthere in North Carolina. And, it’s the first tornado that has already struck North Carolina in 2012.

I lie awake trying to figure out how North Carolina residents are going to be served in ashrinking property insurance market that has no new property insurer clamoring to come in andcompete.

That’s what I’m worried about. And, as our state’s elected officials, you should be concerned,too.

As I said at the outset, Nationwide has been and remains committed to North Carolina. I sincerely thank you all very much for giving me your time today.

Any thoughts would be appreciated

Jason Bentley

www.TheBentleyAgency.com

704-857-9512