State approves rates for 8 auto insurers

Cape Cod Times

December 20, 2007

BOSTON — The Massachusetts insurance commissioner has approved 2008 rates for eight auto insurers after finding their rate proposals fair to consumers.

The eight are the first to win clearance as the state shifts to a system in which auto insurers rather than regulators set rates.

Insurance Commissioner Nonnie Burnes has cleared rate proposals from State Farm; Fireman's Fund; Quincy Mutual; Praetorian; Safety; OneBeacon; Amica; and Farm Family.

Their new rates will take effect for new policies and renewals beginning next April.
Filings made last month by 11 other insurers remain under review.

Attorney General Martha Coakley has argued five insurers have proposed rates that are unfair to consumers.

Hearings have been scheduled before Burnes, starting with Commerce Insurance on Jan. 9.

Hearings will also be held in January for Safety Insurance Co., Premier Insurance Co., Hanover Insurance Group and Arbella Insurance Co.

Massachusetts is the only state in which auto insurance rates are set by regulators. This approach has driven many insurers from the state since the 1990s.

In an effort to drive down prices, attract more insurance companies and give consumers more coverage choices, Burnes has introduced the new rate-setting system known as managed competition.

The first round of proposed rates under this plan were submitted at the end of November and will be effective for renewals and new policies as of April 1.

Most of the filings by the 19 insurers now writing policies in Massachusetts include some of the same discounts, such as price breaks for insuring multiple cars or using public transit. Some companies, however, have come up with more innovative discounts aimed at certain target markets.

Some consumer advocates, however, say the first round of rate requests don't cut insurance premiums enough.