AG seeks insurance review

Orders 3 firms to defend auto rates
By Herald staff and wire reports
December 11, 2007

Attorney General Martha Coakley has ordered three major auto insurers to defend their proposed rates at public hearings.

Coakley says proposals from the three would collectively overcharge Massachusetts drivers by more than $100 million.

At issue are annual rates that would take effect next spring for customers of Commerce Insurance, Premier Insurance and Safety Insurance.

Together, the companies insure about 45 percent of the state’s drivers.

All three filed for a rate decrease of 6 percent. Coakley believes the rate proposals aren’t justified, and would bring the companies excessive profits.

Coakley has the power to call rate-review hearings as the state introduces greater competition to its heavily regulated auto insurance market.

Massachusetts is shifting to a system where the market, rather than state regulators, sets rates.
Insurance Commissioner Nonnie Burnes has described the new “managed competition” system as a “success,” based on rate proposals that include different discounts for drivers.

The state is hoping that a less regulated system will attract other insurance companies into the Massachusetts market.

But Coakley has been skeptical.

“Particularly during this transition to a more competitive market, these insurers’ complex filings demand close scrutiny,” she said in a statement yesterday.