Credit worthy?

• Position: North Carolina's credit rate reductions

Since North Carolina's insurance commissioner is elected, it's to be expected that he'd take credit for rate reductions -- but why not wait until that credit is deserved?

This summer, when Jim Long "announced" that drivers would get a 5% discount on their auto-insurance bills beginning July 1, the press release said he "was shocked to discover that the North Carolina Reinsurance Facility, a supposedly nonprofit insurance pool for high-risk drivers, in fact turned a profit over the last three years." The surplus had reached $139 million at year-end 1993.

John Watkins, general manager of the North Carolina Rate Bureau (the insurance industry's rate-making group), wonders how Long could have been shocked by the facility's surplus. The commissioner, he says, is an ex-officio, nonvoting member of the Reinsurance Facility's board and receives its quarterly financial statements.

Why would a state fund -- that by law must break even -- run a profit? Fewer accidents and losses than actuaries anticipated, more premiums and improved investment income, Watkins says. To reduce the surplus, the Reinsurance Facility board, without Jim Long's help, agreed April 6 to eliminate an annual surcharge on drivers' liability policies that covers high-risk drivers. The surcharge, which brought in about $140 million last year, has been in effect since 1980 and at one time had reached 30% for drivers with poor records. No one issued a press release on the surcharge's elimination, so Long's office seized the opportunity.

Long spokesman Paul Mahoney defended the action, calling the financial statements confusing and noting their use of the term "positive member equity" instead of "profit." And he insists that Long is not a Reinsurance Facility board member.

State attracts white in-flight

While some border states struggle to cope with floods of immigrants from Central America and the Caribbean, North Carolina has been getting a steady stream of white people from other states, a study shows.

From 1985 through 1990, as the state was growing to a population of almost 6.7 million, foreign immigrants totaled just 63,993 -- and half of those were "white," according to a study from the Population Studies Center at the University of Michigan.

In all, net in-migration added 289,939 people to the state's total. Of those, 82% were white. Among the whites moving here from other states, 91% were under the age of 65,78% were living above the poverty level when they arrived, and 18.5%...