Hurricane Helene destroyed many a town’s buildings, infrastructure, homes, and normal way of life in Western North Carolina, but it couldn’t wash away the community spirit of the people who make up those towns. That spirit was on display as business owners gathered to describe the storm’s impact on their communities at a recent event in Swannanoa sponsored by local chambers of commerce.
“Business is the heartbeat of a community,” Meredith Ellison told attendees. “It is what is makes people come and go.” As co-owner of Swannanoa-based Quility.
When Ellison graduated from the University of Alabama in 2001, she and her boyfriend Brandon were “two kids who didn’t know what to do with themselves.” They landed in Asheville because it was a city that combined the unique cultures of the mountains and the South.
Meredith finished graduate school, and she and Brandon started a family. Securing their roots to the place, in 2009, they launched the company that eventually became Quility with born-and-bred Asheville native Casey Watkins.
Quility, which provides technology to support insurance agents, is just steps away from the former church turned community center that hosted the event. In the immediate aftermath of Helene, the facility had served as a community hub for food distribution and communication.
Ellison believes that Quility’s culture can change the world and create a ripple effect. That ripple effect was evident in Swannanoa before Hurricane Helene and in its aftermath. “We understand that we’re part of a community, and we ask, ‘What is our responsibility in the world?’” Ellison said.
She gave a number of examples. She used to drop her car off on the way to work to get an oil change. One co-worker would walk to the gas station to grab candy for the office then go to the barber shop for a haircut. Another could easily take her pet to the vet. And everyone could walk to lunch from their office.
All that is gone now. All those businesses were damaged or destroyed during the storm. The veterinarian was able to open an office 20 minutes down the road, but his business is down 50 percent, Ellison said.
Ellison is confident that the town will recover stronger and Quility will do its part. “We want to do this for the future of Swannanoa. We’re inspired to build back here.”
That same ripple effect is especially true in the tourism industry.
Sandi Boyer, executive director of the North Carolina Youth Camp Association discussed the far reaches of tourism into the area’s economies during the panel. North Carolina is home to more than 200 overnight camps—160 of those in the mountains.
Every camp in Western North Carolina was touched by the storm in some way, Boyer said. But the impact of a camp extends beyond its grounds. Nearby towns with their restaurants, hotels, shops, and activities play host to parents. Teachers work summers at camps. College students come to work and return to live after graduation. Campers also grow up and choose to raise their own families in North Carolina.
Boyer worries there may not be anything to return to: “We’re losing a whole generation of people that love and take care of Western North Carolina.”
But she believes most of the camps should reopen this summer. “There are camps in the mountains that have been open for more than 100 years,” she said. “This industry is resilient.”
Boone Area Chamber of Commerce President and CEO David Jackson reflected on the complexity of the recovery and how everything is tied together.
“It’s not just a black and white issue. It’s not, a business is closed; a business is open. It’s not, a community is closed or open. It’s all about the little details that matter when one disruption occurs in a community, let alone when an entire region is disrupted,” he said. “There is an interconnectedness amongst this entire region that has been pushed to the test here in these last several months.”.
In 2019, Ellison and her fellow Quility co-founders purchased the site of the former Beacon Blanket Mill to build a bike park and outdoor space for the community. The land is central to town history. The mill employed thousands of residents in its twentieth century heyday, but it has been a vacant lot since a fire destroyed the factory in 2003.
Ellison wants to invest back in the community so that people want to “move here, bring jobs, eat, play, feel inspired here.”
She recognizes that rebuilding the town won’t be done in a day, a week, a month. It will take years. “This is long-term recovery,” Ellison said. “How can we take ground today? You keep your head down and keep working. Then you pick your head up, and there you are.”
NCInnovation provided its 2024 audit to General Assembly on November 21. You can find the audit here and an Excel spreadsheet of the financials here. Of note in the cover letter from independent auditor BDO is the acknowledgement that NCInnovation did not have an independent audit before receiving its first $250 million in state funds:
The 2023 financial statements of the Organization were reviewed by other auditors, whose report dated January 10, 2024[,] stated that they were not aware of any material modifications that should be made to those statements for them to be in accordance with accounting principles generally accepted in the United States of America. A review is substantially less in scope than an audit and does not provide a basis for the expression of an opinion on the financial statements as a whole. [emphasis added]
NC Gen. Stat. 143-728(d)(9) requires NCI to “maintain separate accounting records for and separate accounts [for State and private funds] and shall not commingle [the two],” but the audited financial statements do not make clear the separation of public and private funds. Despite this, it appears that grants are the only thing currently being paid from state funds. This is the largest expense for NCI as projects in the pilot round of grants qualify for their second tranche of funding and as NCI completes its first statewide round of grantmaking in early 2025. The Request for Proposals page states, “The deadline for the fall 2024 pre-application is Friday, December 13, 2024. Applicants can anticipate hearing a response from NCI within one to two months from the application deadline.”
The second largest expense for NCI is salaries and benefits, totaling $2.6 million for the fiscal year. Because the regional hub personnel did not start until November, the annualized expense is more than $3.0 million.
NCInnovation FY2024 Audited Financial Statements and Report [PDF]
Annotated NCInnovation FY2024 Audited Financial Statements [Excel]
House Oversight and Reform Co-chair Jake Johnson’s op-ed on the State Board of Elections party-line vote against the Justice For All Party ran in the Raleigh News & Observer, Charlotte Observer, and Durham Herald-Sun on July 31, 2024. A federal judge later ruled in favor of the Justice For All Party and the State Board of Elections then voted unanimously to allow Cornell West to appear on the November ballot.
Rep. Johnson explained how members misused the unrepresentative results of a non-random survey to justify their party-line vote.
“The board’s decision on the Justice for All party also was a methodological mess. First, Board staff pulled a random sample of 250 people from this non-random and potentially skewed population for follow-up phone calls, according to board staff. Such a random sample can be unrepresentative, however, and staff did not take any steps to ensure its sample reflected the larger population of those who provided phone numbers, let alone the entire population of petition signers. Although the State Board of Elections has a statistician on staff, that person was not consulted about the validity of this survey methodology.
“Biased sample in hand, staff made one call to each phone number on the list from State Board of Elections phone numbers during business hours between July 9 and 11. Only 49 of the 250 people responded. Again, staff did not consider how those 49 people differed from the 201 people who did not answer or the 5,040 not in the sample or the 11,951 who provided no phone number at all.
“Despite this, board chairman Alan Hirsch and board member Jeff Carmon both said the survey of 49 people was key to their votes against the Justice for All Party.”
Read the whole op-ed:
The House Oversight and Reform Select Committee has called elections officials and an expert to testify before the committee on Tuesday, July 23, at 9 a.m. in the Legislative Building’s Blue Ridge Auditorium.
North Carolina State Board of Elections Executive Director Karen Brinson Bell, Chairman Alan Hirsch, and Andy Jackson, director of the Civitas Center for Public Integrity at the John Locke Foundation, are expected to address the board’s decisions on whether to allow three parties’ petitions to be placed on the November ballot. The board ultimately voted to recognize the Constitution Party and the We The People Party but denied the Justice For All Party. The decisions, mostly along party lines, raised questions about how the board made its determinations, any third-party communication related to the issues, and potential political motivation driving the ruling.
“We question the actions of the Board of Elections,” Rep. Jake Johnson (R-Polk) said. “We need answers as to why three parties that had seemingly met the requirements to be on the ballot, were rejected. If this ruling was politically motivated, as is perceived, we owe it to the citizens of North Carolina to bring that to light.”
“How do we trust the board and its staff when their actions seem to be designed to limit ballot access for new parties?” Rep. Harry Warren (R-Rowan) said. “People need to trust the election system. The process to approve new parties this year has done little to foster that trust.”
The House Oversight and Reform Select Committee has called NCInnovation (NCI) CEO Bennet Waters to testify before the committee Tuesday, July 9, at 9 a.m. in the Legislative Building’s Blue Ridge Auditorium.
NCI is a public-private partnership intended to speed commercialization of university research. After proposals to fund NCI from the earnings of a $1.425 billion endowment, the final 2023 budget bill (HB 259, SL 2023-134) included two appropriations to the endowment of $250 million each.
“The General Assembly made a big bet on NCInnovation. If it succeeds in bringing university research to market, the state will reap significant returns,” said co-chair Rep. Harry Warren (R-Rowan). “NCI leadership has not publicly addressed its funding assumptions or its operations. This hearing can be a step to increase our comfort with putting so much faith in one organization’s ability to pick winning technologies.”
Committee members have questions on NCI’s legislative reporting, receipt and use of state funds, its operations and grantmaking, its funding assumptions, and its long-term plans.
Co-chair Rep. Jake Johnson (R-Polk) noted, “NCInnovation intentionally chose two projects from each region, which does raise concerns of how much it is making decisions on merit and how much on political considerations.”
Raleigh, NC – The House Oversight and Reform Committee has requested Department of Motor Vehicles Commissioner Wayne Goodwin to appear before the committee Thursday, June 6, at 9 a.m. in the Legislative Building Auditorium.
Members of the committee will be seeking answers on problems old and new. Goodwin is expected to address the backlog of delivery of driver’s licenses and state IDs and report on the implementation of kiosks. Members will also question the commissioner on the transition to a new vendor for credentials, expectations for the summer DMV office rush, and the status of license plate agencies.
“Drivers have enough frustrations dealing with the DMV without additional delays in getting their licenses. I expect Commissioner Goodwin will be able to explain the reason for the delay and what measures the DMV is taking to fix this latest problem quickly,” co-chair Harry Warren (R-Rowan) said.
Members will also be following up on questions from last year’s House Oversight hearing and a February meeting of the Joint Legislative Transportation Oversight Committee.
“DMV deserves scrutiny,” said co-chair Jake Johnson(R-Polk). “It is one of the most conspicuous services of state government, so it should set the bar for customer service. We know its problems and I hope Commissioner Goodwin will be able to tell us about its progress.”
Members of the House Oversight and Reform Committee gained a clearer understanding of the North Carolina Reinsurance Facility Tuesday, January 30.
Executive Director Joanna Biliouris explained that the Facility exists because drivers are required to purchase liability insurance, insurers cannot set rates entirely based on the risk of a specific policy, and the rates that are allowed are too low for companies to provide that insurance to everyone. In short, the Facility does what it was created by statute to do. but that the Facility can’t quantify its own value. Legislators also learned that the Facility operates as it does due to how the insurance commissioner sets auto liability rates.
The cost of the Facility in the year ending June 30,2023, was $360 million in surcharges on every auto liability policy written in North Carolina, but the value is harder to quantify. Biliouris said, “The Facility cannot be credited with North Carolina having such low liability rates, but North Carolina’s low liability rates can be attributed to the Facility being a part of the state’s regulatory and statutory landscape.”
Ads tout that customers can purchase insurance priced to their driving habits. However, in North Carolina that is not the case: all drivers pay 9.8% higher premiums through a surcharge to cover riskier drivers in the Reinsurance Facility. Biliouris told the committee that the Facility covers 28% of premiums and 20% of policies. Even policies in the Facility pay the surcharge, which means many of them could be cheaper if an increase in premiums led to a larger reduction in the surcharge.
Fully 78% of vehicles in the Reinsurance Facility are “clean risks,” meaning the associated drivers have no points on their driving record but have other factors, such as speeding tickets, accidents, or inexperience behind the wheel that make them more likely have a claim.
Legislators focused on ways to improve the broader market and reduce the need for the Reinsurance Facility.
“I’m hoping we can do some things to accelerate this transition
Rep. Jake Johnson
and get it moving faster.”
Representative George Cleveland (R-Onslow) asked, “Can the Facility do its function as provided by law if clean risks were not allowed?”
“If there was more flexibility in the rates that companies could charge [in the voluntary market], they would likely not send that risk to the Facility.” Biliouris acknowledged. “If the Facility was able to determine the rates for any risk that came in,” it could. Such changes could result in lower premiums and surcharges for most drivers.
“I see a recurring problem, and that is that I believe insurance rates are insufficient,” Rep. Allen Chesser (R-Nash) said. “Is it a bigger problem that inadequate rates have been approved?”
“The drivers that are ceded to the Facility are primarily ceded because it was too much risk for the company to take on for not enough price,” Biliouris said.
Biliouris agreed with co-chair Harry Warren (R-Rowan), “If rates were raised…there would be a reduction in the number of policies ceded.”
Co-chair Rep. Jake Johnson (R-Polk) concluded that he saw a need for reform: “I’m hoping we can do some things to accelerate this transition and get it moving faster.”
Members of the House Oversight and Reform Committee will continue their attempt to get concrete answers from the Department of Insurance on the effectiveness of the North Carolina Reinsurance Facility (NCRF) in a hearing Tuesday, January 30, 2024, at 9 a.m.
In December 2023, the committee questioned Insurance Commissioner Mike Causey about auto insurance rates and the costs versus benefits of the Facility. Causey was unable to provide tangible justification, so, the committee has invited NCRF executive director Joanna Bilouris to address those unanswered questions.
The most prevailing question is: How does the NCRF contribute to the low rates that North Carolina drivers pay?
North Carolina has among the lowest rates in the nation, but it also operates a reinsurance facility, one of only two states to operate its residual market in this way. Twenty-five percent of drivers are in the Facility. Legislators aim to determine what part the Facility plays in those low rates amidst other factors such as liability law and fewer uninsured drivers.
“We expected more from Commissioner Causey in our last hearing but were left unsatisfied,” co-chair Rep. Jake Johnson said. “We anticipate Director Bilouris’s answers to what we’ve asked all along: ‘do our citizens pay more than they should for auto insurance?’ It’s our duty as a committee to investigate the necessity of a government program that may not be financially or practically beneficial to our state.”
“It’s really quite simple: show us evidence that having the Facility does what you say it does—is the Facility the reason North Carolina has low auto insurance rates,” co-chair Harry Warren said. “We can’t just take their word for it. Provide the numbers. We are not the lowest in the country, and those that are, don’t have a facility.”
House Oversight and Reform Committee members sought to get solid answers on the value of the North Carolina Reinsurance Facility—the state’s residual auto insurance market system for higher-risk drivers.
The Department of Insurance struggled to answer clearly whether the benefits of the facility outweigh its costs.
Although insurers do not make a profit on their ceded policies, Causey and DOI staff admitted that insurers are able to charge an administrative fee and make profits on other coverage connected to the ceded policy. When Causey said some companies sell all of their policies through the Facility, Committee Co-Chair Harry Warren asked how they could stay in business if they do not earn a profit from these policies.
North Carolinians paid $360 million in the fiscal year that ended in June to subsidize insurance companies selling policies through the Facility. The two surcharges for the current year are set at 13 percent of premiums, which is more than the combined nine percent premium increase over two years the Commissioner approved.
Rep. Allen Chesser questioned the second of those two charges, which is set to keep the Facility from losing money: “The fact that we have to charge a recoupment surcharge for a deficit, does that mean that the rate that we’re charging on those particular policies would be inadequate?”
Chief Actuary Rick Kohan replied, “There is a recoupment that people have to pay because they don’t collect enough money from people ceded.” Which he acknowledged could be simplified to “Yes.”
Additionally, Causey did not know how many members make up the Facility’s governing board. The commissioner, who makes the appointments, is also responsible for accountability.
In his closing statement, Co-Chair Warren said, “I think the discussion today has raised more questions than it answered.”
Another hearing may be necessary for the Reinsurance Facility and Department of Insurance to show if the Facility provides more benefits than costs for North Carolina.
Do North Carolina drivers pay more than they should for car insurance? Would a change in regulations lead to higher or lower rates?
These are among the questions the House Oversight and Reform Committee will seek to answer December 11, 2023, at 1 p.m. in the Legislative Building Auditorium.
The committee will hear testimony from Dr. Jonathan Murphy, assistant professor of economics at Nicholls State University in Thibodaux, Louisiana, and North Carolina Commissioner of Insurance Mike Causey.
The House Oversight and Reform Committee commissioned Murphy, a former Western Carolina University professor, to conduct a study of North Carolina’s auto insurance regulations and residual market.
The state’s residual market—the North Carolina Reinsurance Facility (NCRF)—is a group of insurers required to cover high-risk drivers. Currently a quarter of drivers fall into this category, higher than any other state.
Murphy will testify about North Carolina’s market and the benefits of moving the state to an assigned-risk system where drivers are assessed, and premiums are calculated based on risk. Using similar reforms in South Carolina as an example, he predicts that if North Carolina implemented the move, premiums would fall for drivers at all risk levels over time.
Causey will address his disagreements with Murphy’s report, the specifics of North Carolina’s insurance market, differences in insurance premiums across states, and other regulatory needs of the Department of Insurance.
“Auto insurance is an expense for anyone who drives,” said co-chair Rep. Harry Warren. “If North Carolinians are paying more than they should because of the system we have, it is our responsibility to understand why and to examine alternatives.”
“Price distortions distort behavior,” said co-chair Rep. Jake Johnson. “If a voluntary auto insurance market would create competitive premiums and promote safe driving, we owe it to our citizens to investigate such financial implications.”