Do you have questions about the upcoming auto insurance changes effective in Massachusetts on April 1, 2008? Get the facts here, and contact us for more information.
Showing posts with label MA Auto Changes. Show all posts
Showing posts with label MA Auto Changes. Show all posts
Tuesday, February 5, 2008
April 2008 MA Auto Insurance FAQ's
Wednesday, January 30, 2008
Mass. Allows Rates and Commissions of 2 Largest Auto Insurers
By Andrew G. Simpson
Insurance Journal
The two largest auto insurance writers in Massachusetts have been given the green light to use the rates they filed for 2008 in rulings that characterize the state attorney general's objections as "irrelevant" in the state's new competitive marketplace.
The rulings also preserve contingent commissions for agents.
Massachusetts Insurance Commissioner Nonnie Burnes has ruled in favor of Commerce Insurance and Safety Insurance over the protests of Massachusetts Attorney General Martha Coakley, whose lawyers had tried to persuade Burnes that items contained in the two insurers' rate filings led to rates that were excessive even though they both filed for overall decreases.
The rulings mean the two insurers may proceed to market using their filings, which called for an average rate decrease of 8.1 percent by Commerce and an average 6.9 percent cut by Safety.
Commerce is the largest auto insurer with 31.6 percent market share, while Safety ranks second with 11.2 percent.
In declining to disapprove the insurers' rate filings, Burnes also handed independent agents' a victory by upholding the inclusion of contingent commissions as part of the rate filings. Coakley's team had argued that contingent commissions should not have been part of the rates.
Until this year, auto insurers had their rates fixed and established by the insurance commissioner. But beginning in April, 2008, insurers are being allowed to compete using their own rates under a new managed competition system. Insurers file individual rates which become effective unless the commissioner disapproves them.
The attorney general has the right to trigger rate hearings on individual insurer rate filings she deems excessive, which Coakley did in the cases of Commerce and Safety, but the final decisions rest with the commissioner.
Coakley objected to provisions for profit, expenses including contingent commissions, and loss trends used by the two insurers in their rates.
But Burnes dismissed the AG's entire analysis, ruling in favor of the insurers on each provision. Burnes suggested that while the AG's approach might have worked under the previous fix-and-establish system, it was irrelevant under the new managed competition system and that the AG "fails to recognize" that the rules have changed.
Burnes said that while the attorney general wants to challenge individual provisions of rates, as was done under the previous system, a competitive system requires a broader view.
"I do not set the rates under c. 175E [the rate statute]. My authority is limited strictly to disapproving a rate or, under very limited circumstances set forth in the statute, approving it. I look at the proposed overall rates generated by the rate filing viewed as a whole in determining whether a company's proposed rates are excessive for the insurance provided," Burnes wrote.
She further explained how her approach under managed competition differs from that taken in the past in her discussion of the Commerce profit provision:.
"It is not my task to look at aggregate industrywide data for the purpose of developing an underwriting profits provision that reasonably reflects the average financial needs of a mythical 'Every Company,' but is specific to none."
Her analyses of the expense and loss trends provision used similar language.
The attorney general had attacked the inclusion of contingent commissions for agents as "creating serious potential conflicts of interest and leading to anticompetitive effects such as the steering of business away from more cost effective carriers." Coakley's lawyers had also argued that because decisions fixing and establishing rates did not allow them to be included, contingent commissions should continue to be rejected in a competitive environment.
But Burnes said that such past decisions are immaterial to the current situation and since such commissions are legal, if insurers decide they want to pay them in a competitive market, they can.
"Contingent commissions now are one basis for legitimate competition in the industry. Indeed, that is why the Division's rate filing instructions explicitly provide for the possibility of such an expense. It is neither my role, nor the role of the Attorney General, to decide what expenses a company should incur in a competitive insurance market provided no such expenses violate the law. Companies that unwisely spend money will enjoy less success in the market, and this experience alone will alter future conduct," Burnes wrote.
Note: Plans submitted by all admitted carriers have now been approved. Contact us for more information.
Insurance Journal
The two largest auto insurance writers in Massachusetts have been given the green light to use the rates they filed for 2008 in rulings that characterize the state attorney general's objections as "irrelevant" in the state's new competitive marketplace.
The rulings also preserve contingent commissions for agents.
Massachusetts Insurance Commissioner Nonnie Burnes has ruled in favor of Commerce Insurance and Safety Insurance over the protests of Massachusetts Attorney General Martha Coakley, whose lawyers had tried to persuade Burnes that items contained in the two insurers' rate filings led to rates that were excessive even though they both filed for overall decreases.
The rulings mean the two insurers may proceed to market using their filings, which called for an average rate decrease of 8.1 percent by Commerce and an average 6.9 percent cut by Safety.
Commerce is the largest auto insurer with 31.6 percent market share, while Safety ranks second with 11.2 percent.
In declining to disapprove the insurers' rate filings, Burnes also handed independent agents' a victory by upholding the inclusion of contingent commissions as part of the rate filings. Coakley's team had argued that contingent commissions should not have been part of the rates.
Until this year, auto insurers had their rates fixed and established by the insurance commissioner. But beginning in April, 2008, insurers are being allowed to compete using their own rates under a new managed competition system. Insurers file individual rates which become effective unless the commissioner disapproves them.
The attorney general has the right to trigger rate hearings on individual insurer rate filings she deems excessive, which Coakley did in the cases of Commerce and Safety, but the final decisions rest with the commissioner.
Coakley objected to provisions for profit, expenses including contingent commissions, and loss trends used by the two insurers in their rates.
But Burnes dismissed the AG's entire analysis, ruling in favor of the insurers on each provision. Burnes suggested that while the AG's approach might have worked under the previous fix-and-establish system, it was irrelevant under the new managed competition system and that the AG "fails to recognize" that the rules have changed.
Burnes said that while the attorney general wants to challenge individual provisions of rates, as was done under the previous system, a competitive system requires a broader view.
"I do not set the rates under c. 175E [the rate statute]. My authority is limited strictly to disapproving a rate or, under very limited circumstances set forth in the statute, approving it. I look at the proposed overall rates generated by the rate filing viewed as a whole in determining whether a company's proposed rates are excessive for the insurance provided," Burnes wrote.
She further explained how her approach under managed competition differs from that taken in the past in her discussion of the Commerce profit provision:.
"It is not my task to look at aggregate industrywide data for the purpose of developing an underwriting profits provision that reasonably reflects the average financial needs of a mythical 'Every Company,' but is specific to none."
Her analyses of the expense and loss trends provision used similar language.
The attorney general had attacked the inclusion of contingent commissions for agents as "creating serious potential conflicts of interest and leading to anticompetitive effects such as the steering of business away from more cost effective carriers." Coakley's lawyers had also argued that because decisions fixing and establishing rates did not allow them to be included, contingent commissions should continue to be rejected in a competitive environment.
But Burnes said that such past decisions are immaterial to the current situation and since such commissions are legal, if insurers decide they want to pay them in a competitive market, they can.
"Contingent commissions now are one basis for legitimate competition in the industry. Indeed, that is why the Division's rate filing instructions explicitly provide for the possibility of such an expense. It is neither my role, nor the role of the Attorney General, to decide what expenses a company should incur in a competitive insurance market provided no such expenses violate the law. Companies that unwisely spend money will enjoy less success in the market, and this experience alone will alter future conduct," Burnes wrote.
Note: Plans submitted by all admitted carriers have now been approved. Contact us for more information.
Tuesday, January 22, 2008
LETTER: Industry could be winner on auto insurance
Industry could be winner on auto insurance
More on SouthCoastToday.com re: Rep. Koczera's concerns from the Legislative Director of MASSPIRG
"Rep. Koczera has good reason for concern about how the new deregulated auto insurance system will impact consumers.
While not completely final, here is what we know already:
First, average rates will be higher under the new plan vs. the current plan. Despite its flaws, our existing auto insurance system produced a 21 percent decrease in rates over the last three years and would have cut rates by at least 11 percent next year, according to both our analyses of rates over the last 10 years and the attorney general's office.
Under the new system, the average rate decrease is about 7 percent based on the insurers' estimates of the effect of their filings. Gov. Patrick's commissioner of insurance denied the attorney general access to information that could have determined whether these estimates are inflated, so even the 7 percent figure is suspect. In any case, the net result on the average premium under the new system compared to our regulated one, is an average increase in rates of at least 4 percent.
Second, while the commissioner did prohibit insurers from using unfair and socioeconomic factors like credit scores and education to set premiums, she did not prevent them from using proxies for those banned factors. And just last week the commissioner prohibited the attorney general from presenting evidence showing that certain rating factors proposed by the state's largest auto insurer were unfair to consumers.
Unfortunately, it does not come as a surprise that the real winners of the deregulated auto insurance industry are the insurers — not the consumers. When was the last time you saw an industry push for changes that would benefit the consumer over the industry? "
Deirdre Cummings
Legislative Director
MASSPIRG
Boston
More on SouthCoastToday.com re: Rep. Koczera's concerns from the Legislative Director of MASSPIRG
"Rep. Koczera has good reason for concern about how the new deregulated auto insurance system will impact consumers.
While not completely final, here is what we know already:
First, average rates will be higher under the new plan vs. the current plan. Despite its flaws, our existing auto insurance system produced a 21 percent decrease in rates over the last three years and would have cut rates by at least 11 percent next year, according to both our analyses of rates over the last 10 years and the attorney general's office.
Under the new system, the average rate decrease is about 7 percent based on the insurers' estimates of the effect of their filings. Gov. Patrick's commissioner of insurance denied the attorney general access to information that could have determined whether these estimates are inflated, so even the 7 percent figure is suspect. In any case, the net result on the average premium under the new system compared to our regulated one, is an average increase in rates of at least 4 percent.
Second, while the commissioner did prohibit insurers from using unfair and socioeconomic factors like credit scores and education to set premiums, she did not prevent them from using proxies for those banned factors. And just last week the commissioner prohibited the attorney general from presenting evidence showing that certain rating factors proposed by the state's largest auto insurer were unfair to consumers.
Unfortunately, it does not come as a surprise that the real winners of the deregulated auto insurance industry are the insurers — not the consumers. When was the last time you saw an industry push for changes that would benefit the consumer over the industry? "
Deirdre Cummings
Legislative Director
MASSPIRG
Boston
Wednesday, January 16, 2008
LETTER: Koczera wrong on auto insurance
Courtesy of SouthCoastToday.com
January 15, 2008 8:40 PM
It is unfortunate that responsible state policymakers continue to rely upon scare tactics and misinformation to oppose the efforts of the Patrick administration to reform the antiquated and anti-consumer Massachusetts auto insurance system. Rep. Robert Koczera's recent op-ed piece ("Auto insurance reform discriminates," Jan. 11) disappointingly relies upon such arguments.
Rep. Koczera is simply wrong that good drivers with spotless records, who are assigned to a company by the Massachusetts assigned risk plan, will not receive the benefits of lower rates. It is illegal for a company to charge such an assigned good driver any more than their policy premium would be were they insured by that company voluntarily.
Rep. Koczera ignores the fact that good drivers in Acushnet, for example, have been subsidizing bad drivers in New Bedford, and vice versa, under the present system, but has not previously found this objectionable.
Driving record is, in fact, a significant factor in the decision all companies make in offering rates, but even staunch opponents of competition in the Legislature acknowledge the impracticality of an auto insurance system based upon a single factor. That said, all the objectionable socioeconomic factors listed by Rep. Koczera have, in fact, been banned for use in determining rates and in underwriting policies.
Real competition, with more companies, more products and more consumer choices, necessitates a regulatory playing field that resembles at least modestly the playing field in the other 49 states of the nation. It is no accident that other big states, like New Jersey and Texas, scrapped their state-set systems in favor of competition and saw more companies compete and better rate offerings across the board.
Consumers can anticipate the same results here in Massachusetts, so long as well-intended but wrong policymakers do not stand in the way of the meaningful reform that the Patrick administration is bringing to the commonwealth's auto insurance system.
James T. Harrington
Executive Director
Massachusetts Insurance Federation
The writer lives in Dartmouth.
January 15, 2008 8:40 PM
It is unfortunate that responsible state policymakers continue to rely upon scare tactics and misinformation to oppose the efforts of the Patrick administration to reform the antiquated and anti-consumer Massachusetts auto insurance system. Rep. Robert Koczera's recent op-ed piece ("Auto insurance reform discriminates," Jan. 11) disappointingly relies upon such arguments.
Rep. Koczera is simply wrong that good drivers with spotless records, who are assigned to a company by the Massachusetts assigned risk plan, will not receive the benefits of lower rates. It is illegal for a company to charge such an assigned good driver any more than their policy premium would be were they insured by that company voluntarily.
Rep. Koczera ignores the fact that good drivers in Acushnet, for example, have been subsidizing bad drivers in New Bedford, and vice versa, under the present system, but has not previously found this objectionable.
Driving record is, in fact, a significant factor in the decision all companies make in offering rates, but even staunch opponents of competition in the Legislature acknowledge the impracticality of an auto insurance system based upon a single factor. That said, all the objectionable socioeconomic factors listed by Rep. Koczera have, in fact, been banned for use in determining rates and in underwriting policies.
Real competition, with more companies, more products and more consumer choices, necessitates a regulatory playing field that resembles at least modestly the playing field in the other 49 states of the nation. It is no accident that other big states, like New Jersey and Texas, scrapped their state-set systems in favor of competition and saw more companies compete and better rate offerings across the board.
Consumers can anticipate the same results here in Massachusetts, so long as well-intended but wrong policymakers do not stand in the way of the meaningful reform that the Patrick administration is bringing to the commonwealth's auto insurance system.
James T. Harrington
Executive Director
Massachusetts Insurance Federation
The writer lives in Dartmouth.
Sunday, January 13, 2008
Mass. Insurance Chief, AG Differ Over How to Regulate Auto Rates
Massachusetts Insurance Commissioner Nonnie Burnes and Attorney General Martha Coakley are at odds over how best to regulate the state's new competitive auto rates.
Coakley thinks some insurers are being stingy with their rate cuts and wants to dig deeply into individual insurance company rate filings by obtaining background documents from the carriers.
Burnes say she's got everything under control and Coakley's tactics would only delay the day when consumers enjoy the fruits of a competitive system.
Burnes appears intent on keeping the rate approval process moving forward so carriers can begin marketing their new rates in time for the April 1 start date for competitive rating.
The rates for 14 of the 19 insurers writing private passenger auto have been approved after some review and revisions. But the rates for a few other insurers, including some of the larger writers, remain under scrutiny.
Hearings began this week into the rates of Commerce, the state's largest auto insurer. Hearings into the filings of Arbella Mutual Insurance Co., Safety Insurance Co., Premier Insurance Co. of Massachusetts, and Hanover Insurance Group are scheduled for later this month.
The insurance department has already approved the filings for Arbella and Safety but they are being further reviewed at Coakley's insistence.
Commerce has filed for an average decrease of 6 percent. Coakley claims the company could lower rates more than that.
The different approaches of the two public officials have been on display in recent legal moves and at a hearing on Commerce's rates this week in Boston.
At the hearing, Burnes oversaw questioning of Commerce officials by Assistant Attorney General Peter Leight. She appeared impatient with his lengthy questioning, at one point remarking that motorists are "never going to get decent rates" if the state prolongs the process.
The differences between the two also played out in legal maneuvering by Burnes, a former judge, and Coakley, a former prosecutor.
Coakley's office had wanted more ammunition to question officials of Commerce and the other insurers about their ratemaking. The attorney general had first sought to obtain background materials from Commerce by asserting the legal right of discovery. After Burnes, rejected that assertion, Coakley issued subpoenas to Commerce for certain documents. Burnes also blocked that move.
Coakley and consumer advocates say Burnes' moves could restrict her agency's ability to represent consumers in rate hearings.
"Our goal in calling for hearings on Commerce's and other insurers' rate filings was to bring transparency to the rate-setting process under the new managed competition system," Coakley said. "We are very concerned that our office's inability to acquire appropriate information is likely to render the hearings ineffective and does a disservice to consumers."
This is not Coakley's only attempt to expand her office's consumer advocacy reach. Legislation that included a provision to give the attorney general the power of discovery died in the Legislature last session, although it could be revived.
The Massachusetts Association of Insurance Agents, opposed that legislation. Frank Mancini, president and chief executive officer of the trade group, said the denial of discovery was a "victory for consumers and agents" for several reasons.
First, he said, the resulting delays brought about by discovery could have meant that the insurers with rates subject to hearings would not have been able to compete for business with their lower 2008 rates come April but would have had to use their higher 2007 rates. Given that the carriers under review represent almost 40 percent of the marketplace, that could have denied consumers the benefits of competition and put those carriers at a competitive disadvantage, he said.
Also, Mancini said, had Coakley been granted the right of discovery, he believes she would have gone hunting after agent commission data. "I have been telling our members that if that discovery had passed, every one of their commission agreements would have been on Coakley's desk," he told Insurance Journal.
Before the Commerce hearing began, the insurance department officially cleared the filings of four insurers, bringing the total now approved to 14.
"The rates on file have withstood the Division's extensive review process and mark the beginning of a new era of consumer savings and consumer choice in the state's auto insurance market," said Burnes.
The insurance department said it continues to review the proposed rates of the remaining insurers.
See comments on this article in The Insurance Journal
Coakley thinks some insurers are being stingy with their rate cuts and wants to dig deeply into individual insurance company rate filings by obtaining background documents from the carriers.
Burnes say she's got everything under control and Coakley's tactics would only delay the day when consumers enjoy the fruits of a competitive system.
Burnes appears intent on keeping the rate approval process moving forward so carriers can begin marketing their new rates in time for the April 1 start date for competitive rating.
The rates for 14 of the 19 insurers writing private passenger auto have been approved after some review and revisions. But the rates for a few other insurers, including some of the larger writers, remain under scrutiny.
Hearings began this week into the rates of Commerce, the state's largest auto insurer. Hearings into the filings of Arbella Mutual Insurance Co., Safety Insurance Co., Premier Insurance Co. of Massachusetts, and Hanover Insurance Group are scheduled for later this month.
The insurance department has already approved the filings for Arbella and Safety but they are being further reviewed at Coakley's insistence.
Commerce has filed for an average decrease of 6 percent. Coakley claims the company could lower rates more than that.
The different approaches of the two public officials have been on display in recent legal moves and at a hearing on Commerce's rates this week in Boston.
At the hearing, Burnes oversaw questioning of Commerce officials by Assistant Attorney General Peter Leight. She appeared impatient with his lengthy questioning, at one point remarking that motorists are "never going to get decent rates" if the state prolongs the process.
The differences between the two also played out in legal maneuvering by Burnes, a former judge, and Coakley, a former prosecutor.
Coakley's office had wanted more ammunition to question officials of Commerce and the other insurers about their ratemaking. The attorney general had first sought to obtain background materials from Commerce by asserting the legal right of discovery. After Burnes, rejected that assertion, Coakley issued subpoenas to Commerce for certain documents. Burnes also blocked that move.
Coakley and consumer advocates say Burnes' moves could restrict her agency's ability to represent consumers in rate hearings.
"Our goal in calling for hearings on Commerce's and other insurers' rate filings was to bring transparency to the rate-setting process under the new managed competition system," Coakley said. "We are very concerned that our office's inability to acquire appropriate information is likely to render the hearings ineffective and does a disservice to consumers."
This is not Coakley's only attempt to expand her office's consumer advocacy reach. Legislation that included a provision to give the attorney general the power of discovery died in the Legislature last session, although it could be revived.
The Massachusetts Association of Insurance Agents, opposed that legislation. Frank Mancini, president and chief executive officer of the trade group, said the denial of discovery was a "victory for consumers and agents" for several reasons.
First, he said, the resulting delays brought about by discovery could have meant that the insurers with rates subject to hearings would not have been able to compete for business with their lower 2008 rates come April but would have had to use their higher 2007 rates. Given that the carriers under review represent almost 40 percent of the marketplace, that could have denied consumers the benefits of competition and put those carriers at a competitive disadvantage, he said.
Also, Mancini said, had Coakley been granted the right of discovery, he believes she would have gone hunting after agent commission data. "I have been telling our members that if that discovery had passed, every one of their commission agreements would have been on Coakley's desk," he told Insurance Journal.
Before the Commerce hearing began, the insurance department officially cleared the filings of four insurers, bringing the total now approved to 14.
"The rates on file have withstood the Division's extensive review process and mark the beginning of a new era of consumer savings and consumer choice in the state's auto insurance market," said Burnes.
The insurance department said it continues to review the proposed rates of the remaining insurers.
See comments on this article in The Insurance Journal
Thursday, January 10, 2008
First auto insurance rate-setting hearing opens
By Jeffrey Krasner
Globe Staff / January 10, 2008
Insurance Commissioner Nonnie S. Burnes yesterday kicked off the first rate-setting hearing under a new auto insurance system that allows insurers to set their own rates, subject to government oversight. Attorney General Martha Coakley had called for the hearing to examine rates filed by Commerce Insurance of Webster, the state's largest auto insurer.....read the full article here.
Globe Staff / January 10, 2008
Insurance Commissioner Nonnie S. Burnes yesterday kicked off the first rate-setting hearing under a new auto insurance system that allows insurers to set their own rates, subject to government oversight. Attorney General Martha Coakley had called for the hearing to examine rates filed by Commerce Insurance of Webster, the state's largest auto insurer.....read the full article here.
Thursday, December 27, 2007
Car insurance tune-up heads for ‘08 collision
Dan Devine, The Boston-Baystate Banner
If 2007 was any indication of what we can expect in the fight over car insurance rates, 2008 is sure to be a heavyweight brawl.
In one corner: former Superior Court judge Nonnie S. Burnes, appointed state insurance commissioner in February by Gov. Deval Patrick.
She inherited the task of implementing the recommendations of the Massachusetts Automobile Insurance Study Group, which called for the state to curb regulation and move toward a competitive structure and market-based rates.
In the other corner: state Attorney General Martha Coakley. Her office warned Burnes that allowing insurers to set their own market rates could mean higher price tags for drivers — especially those in urban areas.
The opening bell rang in July, when Burnes announced a decision to switch to a form of “managed competition” that would allow insurance companies to set their own rates. She made the call after conducting a lengthy review and a series of hearings featuring testimony from insurance officials, consumer advocates and representatives from Coakley’s office.
Burnes disputed the higher rates claim in a July interview with the Banner, saying that a state-hired consultant charged with estimating the impact on those neighborhoods came up with drastically different figures — in some cases, even decreases.
That disparity was just one of several major disconnects during a tumultuous year among legislators, consumer advocates and, particularly, Burnes and Coakley.
Two other key issues — how to define the criteria that insurers may use in making rate and coverage decisions, and whether insurers should be allowed to consider credit scores as one of those factors — dominated discussion as Burnes’ plan came under increased scrutiny.
On the first question, despite months of calls to reconsider her stance, Burnes remained unmoved.
A special state Senate panel in August relayed worries that Burnes’ plan didn’t include adequate protections against insurers using potentially discriminatory rate-setting and coverage criteria.
State law already banned companies from using race and gender to set rates. But the draft regulations for governing managed competition, released in August, didn’t preclude insurers from considering other socioeconomic factors, like occupation or income, that some argued could stand in for the prohibited criteria.
Burnes maintained she would only allow insurers to use socioeconomic factors if they demonstrated the criteria’s use didn’t lead to discriminatory practices. Critics countered by suggesting that Burnes should change the way factors are defined — rather than establishing a set of factors that insurers are barred from using, they said, the list should include only those factors explicitly allowed.
Burnes disagreed, saying “we want to be able to give insurers the flexibility to be innovative, entrepreneurial and creative in making opportunities for consumers.”On that point, she stuck to her guns.
“Despite the urging that I received to state the factors that insurers may consider in proposing their rates … I have determined that such a structure would be too rigid to deliver to our consumers the opportunities that we seek,” Burnes wrote in an Oct. 5 letter announcing the final regulations.
Consumer advocate Stephen D’Amato, a consultant to the Cambridge-based Center for Insurance Research, told the Boston Globe that Burnes’ decision is just “pretending to protect the public without protecting the public.
”While Burnes refused to give in on the definition issue, her position on the use of credit scores did shift.
The draft regulations filed in August forbade insurers from using the scores or report information in setting rates during the transitional period between April 1, 2008, when changes go into effect, and March 31, 2009.
In a September interview with the Banner, Burnes explained that the prohibition was designed to give the Division of Insurance a chance to study the issue.
“We have heard loudly, and often from both sides, two different points of view — one that [credit scores as a criterion] are discriminatory and one that they are not,” Burnes said. “And because I don’t know, I don’t want to get it wrong.
”Burnes held a hearing on the draft regulations in September, where Coakley and several consumer groups argued against the use of credit scores not only in setting rates, but also in deciding whom to insure, or “underwriting.”
According to a published report, Burnes told a consumer advocate during the hearing that state law required her to allow companies to use credit histories in making that decision. But when the final regulations were released, Burnes had changed her tune.
“In response to what I heard at the hearing and read in the filed testimony, I am banning the use of credit information from a consumer reporting agency in underwriting, as well as in rating,” Burnes wrote in her Oct. 5 letter.
Though consumer advocates were pleased at the credit score ban, they balked at what they called “too many loopholes” in the final regulations that could be harmful to consumers.
In the two months since the regulations were finalized, Coakley has worked to ensure that no such harm is done.
While she has said she supports the onset of competition — a claim loudly disputed by insurance company officials — Coakley has issued several “informational bulletins,” raising concerns about potential problems with insurers’ rate filings. She has also triggered public hearings calling for several insurance companies to justify their proposed 2008 rates.
Hearings for five insurers are scheduled to take place next month — including Safety Insurance, one of the eight companies whose rates Burnes has already approved. The disagreement over Safety’s filing could set the stage for a high-stakes clash between the attorney general and insurance commissioner early in 2008 — perhaps a fitting continuation of a frequently combative 2007 in the Commonwealth’s auto insurance market.
Click here to send a letter to the editor
If 2007 was any indication of what we can expect in the fight over car insurance rates, 2008 is sure to be a heavyweight brawl.
In one corner: former Superior Court judge Nonnie S. Burnes, appointed state insurance commissioner in February by Gov. Deval Patrick.
She inherited the task of implementing the recommendations of the Massachusetts Automobile Insurance Study Group, which called for the state to curb regulation and move toward a competitive structure and market-based rates.
In the other corner: state Attorney General Martha Coakley. Her office warned Burnes that allowing insurers to set their own market rates could mean higher price tags for drivers — especially those in urban areas.
The opening bell rang in July, when Burnes announced a decision to switch to a form of “managed competition” that would allow insurance companies to set their own rates. She made the call after conducting a lengthy review and a series of hearings featuring testimony from insurance officials, consumer advocates and representatives from Coakley’s office.
Burnes disputed the higher rates claim in a July interview with the Banner, saying that a state-hired consultant charged with estimating the impact on those neighborhoods came up with drastically different figures — in some cases, even decreases.
That disparity was just one of several major disconnects during a tumultuous year among legislators, consumer advocates and, particularly, Burnes and Coakley.
Two other key issues — how to define the criteria that insurers may use in making rate and coverage decisions, and whether insurers should be allowed to consider credit scores as one of those factors — dominated discussion as Burnes’ plan came under increased scrutiny.
On the first question, despite months of calls to reconsider her stance, Burnes remained unmoved.
A special state Senate panel in August relayed worries that Burnes’ plan didn’t include adequate protections against insurers using potentially discriminatory rate-setting and coverage criteria.
State law already banned companies from using race and gender to set rates. But the draft regulations for governing managed competition, released in August, didn’t preclude insurers from considering other socioeconomic factors, like occupation or income, that some argued could stand in for the prohibited criteria.
Burnes maintained she would only allow insurers to use socioeconomic factors if they demonstrated the criteria’s use didn’t lead to discriminatory practices. Critics countered by suggesting that Burnes should change the way factors are defined — rather than establishing a set of factors that insurers are barred from using, they said, the list should include only those factors explicitly allowed.
Burnes disagreed, saying “we want to be able to give insurers the flexibility to be innovative, entrepreneurial and creative in making opportunities for consumers.”On that point, she stuck to her guns.
“Despite the urging that I received to state the factors that insurers may consider in proposing their rates … I have determined that such a structure would be too rigid to deliver to our consumers the opportunities that we seek,” Burnes wrote in an Oct. 5 letter announcing the final regulations.
Consumer advocate Stephen D’Amato, a consultant to the Cambridge-based Center for Insurance Research, told the Boston Globe that Burnes’ decision is just “pretending to protect the public without protecting the public.
”While Burnes refused to give in on the definition issue, her position on the use of credit scores did shift.
The draft regulations filed in August forbade insurers from using the scores or report information in setting rates during the transitional period between April 1, 2008, when changes go into effect, and March 31, 2009.
In a September interview with the Banner, Burnes explained that the prohibition was designed to give the Division of Insurance a chance to study the issue.
“We have heard loudly, and often from both sides, two different points of view — one that [credit scores as a criterion] are discriminatory and one that they are not,” Burnes said. “And because I don’t know, I don’t want to get it wrong.
”Burnes held a hearing on the draft regulations in September, where Coakley and several consumer groups argued against the use of credit scores not only in setting rates, but also in deciding whom to insure, or “underwriting.”
According to a published report, Burnes told a consumer advocate during the hearing that state law required her to allow companies to use credit histories in making that decision. But when the final regulations were released, Burnes had changed her tune.
“In response to what I heard at the hearing and read in the filed testimony, I am banning the use of credit information from a consumer reporting agency in underwriting, as well as in rating,” Burnes wrote in her Oct. 5 letter.
Though consumer advocates were pleased at the credit score ban, they balked at what they called “too many loopholes” in the final regulations that could be harmful to consumers.
In the two months since the regulations were finalized, Coakley has worked to ensure that no such harm is done.
While she has said she supports the onset of competition — a claim loudly disputed by insurance company officials — Coakley has issued several “informational bulletins,” raising concerns about potential problems with insurers’ rate filings. She has also triggered public hearings calling for several insurance companies to justify their proposed 2008 rates.
Hearings for five insurers are scheduled to take place next month — including Safety Insurance, one of the eight companies whose rates Burnes has already approved. The disagreement over Safety’s filing could set the stage for a high-stakes clash between the attorney general and insurance commissioner early in 2008 — perhaps a fitting continuation of a frequently combative 2007 in the Commonwealth’s auto insurance market.
Click here to send a letter to the editor
Wednesday, December 26, 2007
AG putting up roadblocks
By Boston Herald Editorial Staff
The winner of a growing turf war between Insurance Commissioner Nonnie Burnes and Attorney General Martha Coakley may turn out to be Massachusetts drivers. After all, the skirmish appears to center on which one can deliver the lowest auto insurance rates.
But drivers will only benefit over the long term if Coakley drops what appears to be a push for a return to the old, heavily-regulated way of doing things.
In recent weeks, Coakley has raised the ire of the state’s auto insurers by issuing multiple warnings about next year’s rate filings, then ordering public hearings on the filings of five companies.
Coakley argues that the state’s five largest carriers are “overcharging” customers - overestimating their losses, and taking advantage of loosened regulations to pad their profits.
Under the old system, Coakley keeps insisting, drivers might have been entitled to a deeper cut in rates than those insurance companies are now proposing. (A 7 or 8 percent average rate reduction - much more for some drivers - apparently doesn’t cut it.)
But that’s just the point - that was the old system. Under a competitive auto insurance system, drivers will for the first time have the option of bailing on a company that fails to offer the best deal.
For her part, Burnes (a former judge and architect of “managed competition”) has made it clear that she’s comfortable with at least eight of the companies’ rate filings, certifying them last week. Eleven more are pending. Burnes will, however, hold hearings on the five carriers that Coakley has flagged. One of them, Commerce Insurance, Burnes has raised her own concerns about.
The attorney general is rightfully concerned that drivers under the new system be educated on their options, and learn how to choose a carrier that offers them the best deal. It is appropriate for her to examine the filings and ensure that no company is sidestepping the sensible and fair regulations that Burnes has established.
But given the misguided call by some lawmakers to scrap competition before it even starts - and the heavy hand that Coakley now appears to be wielding - we can’t help but be concerned. Coakley says she isn’t anti-competition. Now is her opportunity to prove it.
The winner of a growing turf war between Insurance Commissioner Nonnie Burnes and Attorney General Martha Coakley may turn out to be Massachusetts drivers. After all, the skirmish appears to center on which one can deliver the lowest auto insurance rates.
But drivers will only benefit over the long term if Coakley drops what appears to be a push for a return to the old, heavily-regulated way of doing things.
In recent weeks, Coakley has raised the ire of the state’s auto insurers by issuing multiple warnings about next year’s rate filings, then ordering public hearings on the filings of five companies.
Coakley argues that the state’s five largest carriers are “overcharging” customers - overestimating their losses, and taking advantage of loosened regulations to pad their profits.
Under the old system, Coakley keeps insisting, drivers might have been entitled to a deeper cut in rates than those insurance companies are now proposing. (A 7 or 8 percent average rate reduction - much more for some drivers - apparently doesn’t cut it.)
But that’s just the point - that was the old system. Under a competitive auto insurance system, drivers will for the first time have the option of bailing on a company that fails to offer the best deal.
For her part, Burnes (a former judge and architect of “managed competition”) has made it clear that she’s comfortable with at least eight of the companies’ rate filings, certifying them last week. Eleven more are pending. Burnes will, however, hold hearings on the five carriers that Coakley has flagged. One of them, Commerce Insurance, Burnes has raised her own concerns about.
The attorney general is rightfully concerned that drivers under the new system be educated on their options, and learn how to choose a carrier that offers them the best deal. It is appropriate for her to examine the filings and ensure that no company is sidestepping the sensible and fair regulations that Burnes has established.
But given the misguided call by some lawmakers to scrap competition before it even starts - and the heavy hand that Coakley now appears to be wielding - we can’t help but be concerned. Coakley says she isn’t anti-competition. Now is her opportunity to prove it.
Thursday, December 20, 2007
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.
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.
Tuesday, December 18, 2007
AG, auto insurers clash over rates
Coakley calls for hearings on Hanover, Arbella
By Bob Kievra TELEGRAM & GAZETTE STAFF
rkievra@telegram.com
In a sign that the road to managed competition has grown bumpy for the state’s auto insurers, an industry trade group lashed out at Attorney General Martha Coakley yesterday, the same day her office said the Hanover Insurance Group Inc. of Worcester and Arbella Mutual Insurance Co. of Quincy would overcharge customers by more than $25 million in proposed 2008 rates.
Ms. Coakley called for state regulatory hearings on the two companies a week after she made a similar request for three of the state’s largest automobile insurers, including the Premier Insurance Co. of Worcester, which does business as Travelers of Massachusetts, Webster-based Commerce Group Inc. and Safety Insurance Co. of Boston. Ms. Coakley said the three, which collectively control 49.4 percent of the market, are seeking to overcharge customers by more than $100 million.
Massachusetts auto insurers are in a period of transition after state regulators scrapped the former system of establishing a single rate for all companies to charge. Instead, the state is permitting companies to establish their own rates, subject to certain conditions and regulatory approval by Insurance Commissioner Nonnie S. Burnes.
In the past week, Ms. Coakley has challenged the rate filings by five insurers, which sets in motion a hearing before Ms. Burnes. The first scheduled hearing is Jan. 9 for Commerce Insurance. A preliminary hearing on the Commerce filing will be held tomorrow.
In questioning the Hanover and Arbella filings, Ms. Coakley said that each filing included a variety of shortcomings, including inflated expenses and loss projections and a built-in profit provisions far greater than those permitted by previous insurance commissioners.
In an interview, Ms. Coakley said it remains unclear whether managed competition will result in lower rates for consumers or just bigger profits for insurance companies.
Had the old system remained in place, rates for 2008 would have likely been reduced by approximately 11 percent, she said. “This is not a slight on the Massachusetts insurers,” she said. “But keep in mind that we make people buy insurance in Massachusetts. Our job is to make sure that in this year of transition, the companies play fair.”
Ms. Coakley said the insurance commissioner will have the ultimate authority over the rates but said her job is to question the process, seek out information and promote transparency that assists the person buying insurance
Hanover and Arbella officials defended their rate filings.
Vincent V. Nieroda, president of Hanover’s personal lines group for Massachusetts, said the property and casualty insurer, with 3.6 percent of the market, was not surprised that a rate hearing was requested. Hanover’s proposal calls for an 8.2 percent reduction in automobile rates next year.
“The attorney general has targeted the major players in the market for hearings on this matter,” he said.
Arbella, the state’s third-largest insurer, with 9.3 percent of the market, is seeking rates that would reduce premiums by 7.7 percent.
The company, which insures 375,000 automobiles, said in a statement the attorney general “has inexplicably singled out companies who filed for the largest rate decreases, an action that appears to be anything but pro-consumer.”
Those comments were echoed by a statement earlier in the day from James. T. Harrington, executive director of the Massachusetts Insurance Federation, a trade group representing many of the state’s property and casualty insurers.
Mr. Harrington said the attorney general is using all of her resources to prevent managed competition from occurring, which gives pause to any national insurers who are contemplating entering the Massachusetts market.
“Regrettably, she has decided to focus on scaring consumers away from choice by making baseless and inflammatory claims relative to potential impacts,” Mr. Harrington said.
James A. Ermilio, executive vice president and general counsel at Commerce Group Inc., said the state’s largest auto insurer intends to mount a strong defense of its proposed premiums.
“I don’t want to get into the merits but the fact is we’re going to defend our rate filings vigorously,” he said. “We believe very strongly in what we have put forward.”
Susan K. Scott, senior vice president and general counsel at Travelers of Massachusetts, said the company’s rate filing is fair and reasonable and met all of the state’s requirements.
“We want our rate to be competitive,” she said. “We’re trying to grow our market share in Massachusetts and we hope we can have a just and fair and speedy hearing so that we can turn our attention to that.”
A spokeswoman for Ms. Burnes said the Division of Insurance will consider Ms. Coakley’s request for hearings and will schedule them as may be appropriate.
The Division of Insurance is also conducting its own review of the rate filings.
By Bob Kievra TELEGRAM & GAZETTE STAFF
rkievra@telegram.com
In a sign that the road to managed competition has grown bumpy for the state’s auto insurers, an industry trade group lashed out at Attorney General Martha Coakley yesterday, the same day her office said the Hanover Insurance Group Inc. of Worcester and Arbella Mutual Insurance Co. of Quincy would overcharge customers by more than $25 million in proposed 2008 rates.
Ms. Coakley called for state regulatory hearings on the two companies a week after she made a similar request for three of the state’s largest automobile insurers, including the Premier Insurance Co. of Worcester, which does business as Travelers of Massachusetts, Webster-based Commerce Group Inc. and Safety Insurance Co. of Boston. Ms. Coakley said the three, which collectively control 49.4 percent of the market, are seeking to overcharge customers by more than $100 million.
Massachusetts auto insurers are in a period of transition after state regulators scrapped the former system of establishing a single rate for all companies to charge. Instead, the state is permitting companies to establish their own rates, subject to certain conditions and regulatory approval by Insurance Commissioner Nonnie S. Burnes.
In the past week, Ms. Coakley has challenged the rate filings by five insurers, which sets in motion a hearing before Ms. Burnes. The first scheduled hearing is Jan. 9 for Commerce Insurance. A preliminary hearing on the Commerce filing will be held tomorrow.
In questioning the Hanover and Arbella filings, Ms. Coakley said that each filing included a variety of shortcomings, including inflated expenses and loss projections and a built-in profit provisions far greater than those permitted by previous insurance commissioners.
In an interview, Ms. Coakley said it remains unclear whether managed competition will result in lower rates for consumers or just bigger profits for insurance companies.
Had the old system remained in place, rates for 2008 would have likely been reduced by approximately 11 percent, she said. “This is not a slight on the Massachusetts insurers,” she said. “But keep in mind that we make people buy insurance in Massachusetts. Our job is to make sure that in this year of transition, the companies play fair.”
Ms. Coakley said the insurance commissioner will have the ultimate authority over the rates but said her job is to question the process, seek out information and promote transparency that assists the person buying insurance
Hanover and Arbella officials defended their rate filings.
Vincent V. Nieroda, president of Hanover’s personal lines group for Massachusetts, said the property and casualty insurer, with 3.6 percent of the market, was not surprised that a rate hearing was requested. Hanover’s proposal calls for an 8.2 percent reduction in automobile rates next year.
“The attorney general has targeted the major players in the market for hearings on this matter,” he said.
Arbella, the state’s third-largest insurer, with 9.3 percent of the market, is seeking rates that would reduce premiums by 7.7 percent.
The company, which insures 375,000 automobiles, said in a statement the attorney general “has inexplicably singled out companies who filed for the largest rate decreases, an action that appears to be anything but pro-consumer.”
Those comments were echoed by a statement earlier in the day from James. T. Harrington, executive director of the Massachusetts Insurance Federation, a trade group representing many of the state’s property and casualty insurers.
Mr. Harrington said the attorney general is using all of her resources to prevent managed competition from occurring, which gives pause to any national insurers who are contemplating entering the Massachusetts market.
“Regrettably, she has decided to focus on scaring consumers away from choice by making baseless and inflammatory claims relative to potential impacts,” Mr. Harrington said.
James A. Ermilio, executive vice president and general counsel at Commerce Group Inc., said the state’s largest auto insurer intends to mount a strong defense of its proposed premiums.
“I don’t want to get into the merits but the fact is we’re going to defend our rate filings vigorously,” he said. “We believe very strongly in what we have put forward.”
Susan K. Scott, senior vice president and general counsel at Travelers of Massachusetts, said the company’s rate filing is fair and reasonable and met all of the state’s requirements.
“We want our rate to be competitive,” she said. “We’re trying to grow our market share in Massachusetts and we hope we can have a just and fair and speedy hearing so that we can turn our attention to that.”
A spokeswoman for Ms. Burnes said the Division of Insurance will consider Ms. Coakley’s request for hearings and will schedule them as may be appropriate.
The Division of Insurance is also conducting its own review of the rate filings.
Friday, December 14, 2007
Insurer defends '08 auto rate plan
Commerce to argue filing fully complies with state guidelines
By Bruce Mohl
Globe Staff / December 14, 2007
Sounding a combative tone, the state's largest automobile insurer says it intends to vigorously defend its 2008 rate plan at a hearing before state regulators on Jan. 9.
Both the state Division of Insurance and Attorney General Martha Coakley have raised concerns about the rate filing of Commerce Insurance of Webster, but a top official at the firm said yesterday the company believes its filing is in full compliance with the regulations and guidelines issued for managed competition by Insurance Commissioner Nonnie S. Burnes.
"We are going to stand by our filing and vigorously defend it," said James Ermilio, senior vice president and legal counsel at Commerce, which insures approximately one-third of the state's cars.
While other automobile insurers have indicated they would change their filings in the wake of concerns raised last week by the Division of Insurance, Commerce's pledge to defend its rate plan indicates the transition to managed competition is unlikely to go smoothly.
After 30 years of letting state regulators create one set of auto insurance rates for all the carriers, the Patrick administration this year decided to move to managed competition, in which each company creates its own rates but they must be individually approved by state regulators.
Coakley earlier this week requested hearings before Burnes on the rate filings of Commerce, Premier Insurance of Worcester, and Safety Insurance of Boston, saying they were attempting to overcharge customers by over $100 million. She also said rates would be lower if state regulators continued to set them. Coakley has until next week to decide whether to request additional hearings on other companies' rate filings.
A spokeswoman for the Division of Insurance said the hearing requested by the attorney general on the Commerce rate filing would be held on Jan. 9, with a prehearing to set ground rules scheduled for Wednesday. The spokeswoman, Kimberly Haberlin, said the hearing would focus on whether elements of Commerce's rates were excessive and whether the company was using any discriminatory rating factors. Haberlin said concerns raised by the Division of Insurance about Commerce's filing would be addressed at the same hearing.
Four major concerns have been raised about the Commerce filing. The Division of Insurance last Friday said Commerce, Liberty Mutual Insurance of Boston, Electric Insurance of Beverly, and Arbella Mutual Insurance of Quincy had violated division guidelines by basing discounts on how much bodily injury coverage a customer had purchased. The division also said Commerce had incorrectly incorporated a discount it offers to members of the American Automobile Association into its rates rather than offering it separately as a group discount.
Coakley has raised broader concerns. She accused Commerce, Premier, and Safety of padding their profits and on Wednesday accused Commerce and Liberty of developing their rates in a way that could lead to unexpected higher rates for urban drivers.
Although the rate filings of other companies have been criticized by state regulators, Ermilio said Commerce feels as if it has been singled out. Ermilio said Commerce took a very conservative approach in crafting its rate plan while many of its competitors were far more aggressive in interpreting division guidelines. He said his chief concern was that all companies be treated equally.
He said managed competition so far seemed unlike the systems in place in other states. "We're treading in new waters," he said.
The rate plans filed by companies last month are for policies renewing after April 1. Ermilio said Commerce would like to start sending out policies to agents and customers by mid-February, which means any disputes about rates would have to be settled fairly quickly.
Bruce Mohl can be reached at mohl@globe.com.
By Bruce Mohl
Globe Staff / December 14, 2007
Sounding a combative tone, the state's largest automobile insurer says it intends to vigorously defend its 2008 rate plan at a hearing before state regulators on Jan. 9.
Both the state Division of Insurance and Attorney General Martha Coakley have raised concerns about the rate filing of Commerce Insurance of Webster, but a top official at the firm said yesterday the company believes its filing is in full compliance with the regulations and guidelines issued for managed competition by Insurance Commissioner Nonnie S. Burnes.
"We are going to stand by our filing and vigorously defend it," said James Ermilio, senior vice president and legal counsel at Commerce, which insures approximately one-third of the state's cars.
While other automobile insurers have indicated they would change their filings in the wake of concerns raised last week by the Division of Insurance, Commerce's pledge to defend its rate plan indicates the transition to managed competition is unlikely to go smoothly.
After 30 years of letting state regulators create one set of auto insurance rates for all the carriers, the Patrick administration this year decided to move to managed competition, in which each company creates its own rates but they must be individually approved by state regulators.
Coakley earlier this week requested hearings before Burnes on the rate filings of Commerce, Premier Insurance of Worcester, and Safety Insurance of Boston, saying they were attempting to overcharge customers by over $100 million. She also said rates would be lower if state regulators continued to set them. Coakley has until next week to decide whether to request additional hearings on other companies' rate filings.
A spokeswoman for the Division of Insurance said the hearing requested by the attorney general on the Commerce rate filing would be held on Jan. 9, with a prehearing to set ground rules scheduled for Wednesday. The spokeswoman, Kimberly Haberlin, said the hearing would focus on whether elements of Commerce's rates were excessive and whether the company was using any discriminatory rating factors. Haberlin said concerns raised by the Division of Insurance about Commerce's filing would be addressed at the same hearing.
Four major concerns have been raised about the Commerce filing. The Division of Insurance last Friday said Commerce, Liberty Mutual Insurance of Boston, Electric Insurance of Beverly, and Arbella Mutual Insurance of Quincy had violated division guidelines by basing discounts on how much bodily injury coverage a customer had purchased. The division also said Commerce had incorrectly incorporated a discount it offers to members of the American Automobile Association into its rates rather than offering it separately as a group discount.
Coakley has raised broader concerns. She accused Commerce, Premier, and Safety of padding their profits and on Wednesday accused Commerce and Liberty of developing their rates in a way that could lead to unexpected higher rates for urban drivers.
Although the rate filings of other companies have been criticized by state regulators, Ermilio said Commerce feels as if it has been singled out. Ermilio said Commerce took a very conservative approach in crafting its rate plan while many of its competitors were far more aggressive in interpreting division guidelines. He said his chief concern was that all companies be treated equally.
He said managed competition so far seemed unlike the systems in place in other states. "We're treading in new waters," he said.
The rate plans filed by companies last month are for policies renewing after April 1. Ermilio said Commerce would like to start sending out policies to agents and customers by mid-February, which means any disputes about rates would have to be settled fairly quickly.
Bruce Mohl can be reached at mohl@globe.com.
Thursday, December 13, 2007
Urban drivers facing rate hikes, AG warns
Insurance would cost less overall with old system, she says
By Bruce Mohl
Globe Staff / December 13, 2007
Attorney General Martha Coakley raised new concerns yesterday about the rates the state's automobile insurers plan for 2008, saying that she fears many drivers, particularly in urban areas, will face unexpected increases.
On average, auto insurance should cost less next year. Based on documents the companies filed, Coakley said, the average decline will be about 6 percent for auto policies renewed after April 1.
In her fourth informational bulletin on auto insurance, Coakley described the planned rates as disappointing. She said rates overall would have fallen by double-digit percentages had state regulators continued to set them.
The attorney general also said that some of the bigger insurers actually raised their "manual rates," which the bulletin described as the ones used by agents to determine how much a policyholder will pay. She said Commerce Insurance of Webster and Liberty Mutual Insurance of Boston raised their manual rates 10 percent and then offered customers discounts off of those higher base rates.
Liberty has said that its discounts - for good students, long-term customers, people with high bodily injury coverage, and drivers who also have homeowner policies with Liberty - will reduce premiums for some drivers by as much as 35 percent.
Coakley's bulletin said some compa ny discounts will not be available in urban areas, although it didn't explain why. The bulletin said the average rate for someone in an urban area may end up being higher than the average rate in other parts of the state. The bulletin did not explain why.
"We are concerned that many consumers will experience unexpected rate increases in the next year," Coakley's bulletin said.
After 30 years with a system under which state regulators set all auto insurance rates, the Patrick administration is moving ahead with a system called managed competition that lets companies set their own rates, subject to regulatory approval.
The standards have not been established yet, although Insurance Commissioner Nonnie S. Burnes has issued a number of informational bulletins offering guidance to the companies.
Coakley, who represents consumers in the rate-setting process, has asked Burnes to hold hearings on the rate filings of Commerce, Premier Insurance of Worcester, and Safety Insurance of Boston.
Coakley has until next week to request hearings on other companies.
The attorney general's bulletins are a way for Coakley to communicate her concerns to all the companies at once. Yesterday's bulletin seemed to indicate she was having trouble verifying that drivers will receive the discounts the companies are promising.
Coakley declined to comment, as did Burnes. Officials at Commerce and Liberty also declined to comment.
Stephen D'Amato, a consultant to the Center for Insurance Research in Cambridge and a critic of managed competition, said Coakley is raising serious concerns.
"The way for drivers to get rate reductions under this new system is to qualify for these company discounts, and it's not so important to have a good driving record," he said. "In my opinion, most of the discounts are proxies for prohibited rating factors."
Burnes has prohibited companies from using such factors as a driver's occupation, educational level, income, and, at least initially, credit history, in setting rates because of the potential for discrimination.
Two insurance industry officials, who asked not to be identified for fear of alienating regulators, said they were surprised by Coakley's bulletin, because it criticizes a rate-setting approach the Division of Insurance had been telling companies to use.
The officials also said they've acknowledged all along that some drivers will see their rates go up under managed competition. When they filed their rate plans last month, most companies said premiums would fall for 70 to 80 percent of customers and rise for 20 to 30 percent.
Liberty, for example, said rates will fall for 82 percent of its customers and rise for 18 percent.
During the first year of managed competition, companies cannot raise the premiums of individual customers by more than 10 percent.
The restriction is designed to protect drivers perceived as higher risks from rate shock. But officials say the 10 percent cap means that other drivers, perceived by the companies as better risks, will pay slightly more than they would have if the cap had not been in place.
Bruce Mohl can be reached at mohl@globe.com.
By Bruce Mohl
Globe Staff / December 13, 2007
Attorney General Martha Coakley raised new concerns yesterday about the rates the state's automobile insurers plan for 2008, saying that she fears many drivers, particularly in urban areas, will face unexpected increases.
On average, auto insurance should cost less next year. Based on documents the companies filed, Coakley said, the average decline will be about 6 percent for auto policies renewed after April 1.
In her fourth informational bulletin on auto insurance, Coakley described the planned rates as disappointing. She said rates overall would have fallen by double-digit percentages had state regulators continued to set them.
The attorney general also said that some of the bigger insurers actually raised their "manual rates," which the bulletin described as the ones used by agents to determine how much a policyholder will pay. She said Commerce Insurance of Webster and Liberty Mutual Insurance of Boston raised their manual rates 10 percent and then offered customers discounts off of those higher base rates.
Liberty has said that its discounts - for good students, long-term customers, people with high bodily injury coverage, and drivers who also have homeowner policies with Liberty - will reduce premiums for some drivers by as much as 35 percent.
Coakley's bulletin said some compa ny discounts will not be available in urban areas, although it didn't explain why. The bulletin said the average rate for someone in an urban area may end up being higher than the average rate in other parts of the state. The bulletin did not explain why.
"We are concerned that many consumers will experience unexpected rate increases in the next year," Coakley's bulletin said.
After 30 years with a system under which state regulators set all auto insurance rates, the Patrick administration is moving ahead with a system called managed competition that lets companies set their own rates, subject to regulatory approval.
The standards have not been established yet, although Insurance Commissioner Nonnie S. Burnes has issued a number of informational bulletins offering guidance to the companies.
Coakley, who represents consumers in the rate-setting process, has asked Burnes to hold hearings on the rate filings of Commerce, Premier Insurance of Worcester, and Safety Insurance of Boston.
Coakley has until next week to request hearings on other companies.
The attorney general's bulletins are a way for Coakley to communicate her concerns to all the companies at once. Yesterday's bulletin seemed to indicate she was having trouble verifying that drivers will receive the discounts the companies are promising.
Coakley declined to comment, as did Burnes. Officials at Commerce and Liberty also declined to comment.
Stephen D'Amato, a consultant to the Center for Insurance Research in Cambridge and a critic of managed competition, said Coakley is raising serious concerns.
"The way for drivers to get rate reductions under this new system is to qualify for these company discounts, and it's not so important to have a good driving record," he said. "In my opinion, most of the discounts are proxies for prohibited rating factors."
Burnes has prohibited companies from using such factors as a driver's occupation, educational level, income, and, at least initially, credit history, in setting rates because of the potential for discrimination.
Two insurance industry officials, who asked not to be identified for fear of alienating regulators, said they were surprised by Coakley's bulletin, because it criticizes a rate-setting approach the Division of Insurance had been telling companies to use.
The officials also said they've acknowledged all along that some drivers will see their rates go up under managed competition. When they filed their rate plans last month, most companies said premiums would fall for 70 to 80 percent of customers and rise for 20 to 30 percent.
Liberty, for example, said rates will fall for 82 percent of its customers and rise for 18 percent.
During the first year of managed competition, companies cannot raise the premiums of individual customers by more than 10 percent.
The restriction is designed to protect drivers perceived as higher risks from rate shock. But officials say the 10 percent cap means that other drivers, perceived by the companies as better risks, will pay slightly more than they would have if the cap had not been in place.
Bruce Mohl can be reached at mohl@globe.com.
Tuesday, December 11, 2007
Several Mass. Auto Insurers under Pressure to Amend Rates for 2008
At least two insurers whose 2008 Massachusetts auto insurance rates have been questioned by officials have agreed to revise them and other insurers are under pressure to do the same.
Massachusetts Insurance Commissioner Nonnie Burnes last Friday raised concerns with filings by four insurers: Commerce Insurance Co., Liberty Mutual, Electric Insurance Co. and Arbella Mutual. She said the filings erred in partly basing premiums on how much bodily injury coverage a customer buys.
Burnes told the carriers that giving premium breaks to insureds because they have higher bodily injury limits violates the state's guidelines for its new managed competition system set to go into effect next April.
According to a department spokesperson, Liberty Mutual and Arbella Mutual have already indicated their willingness to fix their filings.
Commerce and Electric have not yet responded to the insurance department.
Commerce is also being told to revise the way it handled its group discounts in its filing.
Meanwhile, Attorney General Martha Coakley said she also wants to probe the rate filings of Commerce along with those of Premier Insurance Co. and Safety Insurance Co. to see if their rates should be lower than filed.
Coakley charged that collectively these insurers' that write about 45% of the market seek to "overcharge" Massachusetts drivers by more than $100 million.
According to the insurance department, the average statewide rate decrease for all 19 insurers is 7.8 percent, with Commerce at 8.1% and Premier and Safety both at 6.3%.
Coakley said her office would seek hearings into the rate filings of these three companies and suggested that the filings of two other insurers warranted further administrative review by Burnes.
Coakley said that the rate filings of Fireman's Fund and State Farm, which together comprise only 1% of the Massachusetts market, contain "some troubling aspects" but that her office decided not to call for hearings on these insurers' filings. She maintained that the filings calculated excess profits and used "unorthodox methods" to project losses and the expenses that are "excessively higher than average companies in the market."
She urged Burnes look more closely at the "suspect provisions" of these small market share insurers.
"Increased competition has the potential to bring down rates and serve consumers' interests," said Coakley. "However, under the managed competition reform, rates are still subject to regulation and approval, and the law prohibits excessive rates. Particularly during this transition to a more competitive market, these insurers' complex filings demand close scrutiny."
The attorney general's office has until December 17 to make final recommendations regarding the remaining insurer filings.
Following Coakley's comments on Monday, Burnes issued a statement suggesting that her department will work with Coakley's office to review all the rates.
"The efforts of both the Commissioner and the Attorney General demonstrate that the strong consumer safeguards built into managed competition are working. We look forward to reviewing her concerns and continuing to work together to make the promise of lower rates for good drivers, more choices and better products a reality for consumers across Massachusetts," Burnes stated.
Source: Insurance Journal
Massachusetts Insurance Commissioner Nonnie Burnes last Friday raised concerns with filings by four insurers: Commerce Insurance Co., Liberty Mutual, Electric Insurance Co. and Arbella Mutual. She said the filings erred in partly basing premiums on how much bodily injury coverage a customer buys.
Burnes told the carriers that giving premium breaks to insureds because they have higher bodily injury limits violates the state's guidelines for its new managed competition system set to go into effect next April.
According to a department spokesperson, Liberty Mutual and Arbella Mutual have already indicated their willingness to fix their filings.
Commerce and Electric have not yet responded to the insurance department.
Commerce is also being told to revise the way it handled its group discounts in its filing.
Meanwhile, Attorney General Martha Coakley said she also wants to probe the rate filings of Commerce along with those of Premier Insurance Co. and Safety Insurance Co. to see if their rates should be lower than filed.
Coakley charged that collectively these insurers' that write about 45% of the market seek to "overcharge" Massachusetts drivers by more than $100 million.
According to the insurance department, the average statewide rate decrease for all 19 insurers is 7.8 percent, with Commerce at 8.1% and Premier and Safety both at 6.3%.
Coakley said her office would seek hearings into the rate filings of these three companies and suggested that the filings of two other insurers warranted further administrative review by Burnes.
Coakley said that the rate filings of Fireman's Fund and State Farm, which together comprise only 1% of the Massachusetts market, contain "some troubling aspects" but that her office decided not to call for hearings on these insurers' filings. She maintained that the filings calculated excess profits and used "unorthodox methods" to project losses and the expenses that are "excessively higher than average companies in the market."
She urged Burnes look more closely at the "suspect provisions" of these small market share insurers.
"Increased competition has the potential to bring down rates and serve consumers' interests," said Coakley. "However, under the managed competition reform, rates are still subject to regulation and approval, and the law prohibits excessive rates. Particularly during this transition to a more competitive market, these insurers' complex filings demand close scrutiny."
The attorney general's office has until December 17 to make final recommendations regarding the remaining insurer filings.
Following Coakley's comments on Monday, Burnes issued a statement suggesting that her department will work with Coakley's office to review all the rates.
"The efforts of both the Commissioner and the Attorney General demonstrate that the strong consumer safeguards built into managed competition are working. We look forward to reviewing her concerns and continuing to work together to make the promise of lower rates for good drivers, more choices and better products a reality for consumers across Massachusetts," Burnes stated.
Source: Insurance Journal
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.
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.
Monday, December 10, 2007
Hanover to Lower Motorcycle Insurance Rates in Mass. Next Spring
December 10, 2007
The Hanover Insurance Group, Inc. reported that it is lowering insurance premiums in Massachusetts for new and renewal motorcycle policies by 8.5 percent.
The new rates will be effective on April 1, 2008. They are the first to be placed on file by the Division of Insurance under the state's managed competition system.
Source: The Hanover & Insurance Journal
The Hanover Insurance Group, Inc. reported that it is lowering insurance premiums in Massachusetts for new and renewal motorcycle policies by 8.5 percent.
The new rates will be effective on April 1, 2008. They are the first to be placed on file by the Division of Insurance under the state's managed competition system.
Source: The Hanover & Insurance Journal
Sunday, December 9, 2007
Political elbows aimed at auto insurance reform
December 9, 2007
THE BOSTON Globe and the attorney general are playing politics with auto insurance reform rather than reporting facts about managed competition ("So much for insurance savings," Editorial, Dec. 2).
There is no credible evidence to support the claim that rates would have decreased by 11 percent if the commissioner had continued to set the rates.
The Globe should have informed readers that the attorney general's recommended rate reductions that were part of the old state-set rate determination process were always considerably higher than the final rate approved by the insurance commissioner. In fact, in 2006 when the previous attorney general was seeking higher office, the recommended rate decrease was twice what was finally approved.
The Globe also should have noted that despite the frequently large differences under the old system between the attorney general's rate recommendations and the final rates as determined by the commissioner, the attorney general almost never challenged those final rates in court, and when he did, he invariably lost.
The rate recommendations of the attorney general are political posturing. Come April, deserving drivers, good drivers - young, old, urban, and suburban - will experience rate decreases that will dwarf all of our political expectations.
ROBERT P. SPELLANE Representative 13th Worcester DistrictBoston
The writer is vice chairman of the Joint Committee on Financial Services.
THE BOSTON Globe and the attorney general are playing politics with auto insurance reform rather than reporting facts about managed competition ("So much for insurance savings," Editorial, Dec. 2).
There is no credible evidence to support the claim that rates would have decreased by 11 percent if the commissioner had continued to set the rates.
The Globe should have informed readers that the attorney general's recommended rate reductions that were part of the old state-set rate determination process were always considerably higher than the final rate approved by the insurance commissioner. In fact, in 2006 when the previous attorney general was seeking higher office, the recommended rate decrease was twice what was finally approved.
The Globe also should have noted that despite the frequently large differences under the old system between the attorney general's rate recommendations and the final rates as determined by the commissioner, the attorney general almost never challenged those final rates in court, and when he did, he invariably lost.
The rate recommendations of the attorney general are political posturing. Come April, deserving drivers, good drivers - young, old, urban, and suburban - will experience rate decreases that will dwarf all of our political expectations.
ROBERT P. SPELLANE Representative 13th Worcester DistrictBoston
The writer is vice chairman of the Joint Committee on Financial Services.
Wednesday, December 5, 2007
Mass. Insurance Agents Support Managed Competition But Oppose Credit Scoring
Insurance agents in Massachusetts support the state's move to managed competition in private passenger auto insurance but oppose insurers' use of credit scoring in rating or underwriting.
In an online Insurance Journal poll completed by 76 Massachusetts agents, 56% said they support the move from fix-and-establish auto rates to a managed competition format, while 38.7% said they oppose it and 5.3% are undecided or have no opinion.
"It's about time that we are given the same opportunities to secure business that they have in other states," noted one pro-managed competition agent.
The current regulations for managed competition ban the use of credit scores by insurers. A majority of agents agree with this prohibition in rating (77.3%) as well as in underwriting (65.8%).
"Think competition is OK. Think credit scoring or socio-economic factors are unfair to good drivers," wrote one agent who captured the majority's viewpoint.
Not all agree that the change is necessary.
"Auto rates were doing just fine under the present system. Premiums have been coming down. As they say, 'if it isn't broke, don't fix it,'" commented one agent opposed to the switch.
For a complete report on agents' views of the change to managed competition, see the Dec. 3 issue of Insurance Journal East magazine.
In an online Insurance Journal poll completed by 76 Massachusetts agents, 56% said they support the move from fix-and-establish auto rates to a managed competition format, while 38.7% said they oppose it and 5.3% are undecided or have no opinion.
"It's about time that we are given the same opportunities to secure business that they have in other states," noted one pro-managed competition agent.
The current regulations for managed competition ban the use of credit scores by insurers. A majority of agents agree with this prohibition in rating (77.3%) as well as in underwriting (65.8%).
"Think competition is OK. Think credit scoring or socio-economic factors are unfair to good drivers," wrote one agent who captured the majority's viewpoint.
Not all agree that the change is necessary.
"Auto rates were doing just fine under the present system. Premiums have been coming down. As they say, 'if it isn't broke, don't fix it,'" commented one agent opposed to the switch.
For a complete report on agents' views of the change to managed competition, see the Dec. 3 issue of Insurance Journal East magazine.
Tuesday, December 4, 2007
Insurers wait to see new rules' effect
Regulatory climate still uncertain, says an industry official
By Bruce Mohl, Globe Staff
November 29, 2007
By Bruce Mohl, Globe Staff
November 29, 2007
Saturday, December 1, 2007
Encompass Adjusts Mass. Auto Rates for 2008
November 30, 2007
Encompass Insurance has further lowered its 2008 Massachusetts auto insurance rates for preferred risks by 5 percent, resulting in an overall statewide average decrease of 4.5 percent compared to the 3.4 percent in its original filing.
The insurer has also introduced several new coverage options and discounts that will be available effective April of 2008 when the state allows competitive rating. The new options include an accident forgiveness program and a good payer discount for those who pay their premiums on time.
Andrew Carpentier, regional marketing vice president, said Encompass Insurance will also conduct an analysis of market trends and make additional filings during the transition period from now until April if necessary.
Encompass sells through independent agents and is part of the Allstate Group.
Source: Encompass
Encompass Insurance has further lowered its 2008 Massachusetts auto insurance rates for preferred risks by 5 percent, resulting in an overall statewide average decrease of 4.5 percent compared to the 3.4 percent in its original filing.
The insurer has also introduced several new coverage options and discounts that will be available effective April of 2008 when the state allows competitive rating. The new options include an accident forgiveness program and a good payer discount for those who pay their premiums on time.
Andrew Carpentier, regional marketing vice president, said Encompass Insurance will also conduct an analysis of market trends and make additional filings during the transition period from now until April if necessary.
Encompass sells through independent agents and is part of the Allstate Group.
Source: Encompass
Thursday, November 29, 2007
18 of 19 Insurers Amend Mass. Rates; State Plans Outreach
November 29, 2007
Eighteen of the state's 19 Massachusetts auto insurers amended rate filings for policies with April 2008 effective dates at the state's Division of Insurance.
The latest filings lowered rates from the origianl filings made on Nov. 19.
The average reduction across 19 companies for policies effective in April 2008 is now -7.8 percent, according to state officials. It was 7.7 percent after the initial filings on Nov. 19.
"Not only are we seeing companies adjust their rates downward even more, we are also seeing them improve their array of policy offerings to stay ahead of their competitors," said Insurance Commissioner Nonnie S. Burnes. "The promise of better rates for good drivers and better products for everyone is coming to fruition in the Massachusetts auto insurance market and consumers will start to experience these benefits firsthand when they begin to shop around this winter."
Burnes said her department will be closely scrutinizing the amended filings to make certain that consumers across the state are being treated fairly. The rate review period can extend to 45 days. She sai the division will be examining each company filing to determine whether insurers are, as required, using driving record and experience for primary rating factors, refraining from drawing on banned socioeconomic factors, including education, homeownership and credit information, for rating and underwriting purposes and that the final rates are actuarially sound.
The next round of rate filings for policies with effective dates on or after May 1, 2008 can occur anytime after February 15, 2008.
"Drivers who have policies with April effective dates can expect to receive their renewal notices in the mail – and, if they are good drivers, news of lower rates – by mid-February," said Burnes.
The department is also planning to launch a website during to help jumpstart comparison shopping among the state's auto insurers. "We want consumers to be able to go to a central, trusted location so that they can make informed choices about the prices and policies that work best for them," Burnes said.
In addition to the new consumer website, Burnes said she and her staff will be conducting regional outreach among consumers, agents, legislators and other interested parties "in an effort to offer information and guidance about managed competition's new rules, inherent benefits and available resources" in the coming weeks and months, timed to coincide with the staggered issuance of renewal notices and policy effective dates.
"We want to get word out to consumers in every corner of the state about the exciting opportunity they now have to take advantage of competitive rates and innovative policies," said Burnes.
Source: Mass. DOI
Eighteen of the state's 19 Massachusetts auto insurers amended rate filings for policies with April 2008 effective dates at the state's Division of Insurance.
The latest filings lowered rates from the origianl filings made on Nov. 19.
The average reduction across 19 companies for policies effective in April 2008 is now -7.8 percent, according to state officials. It was 7.7 percent after the initial filings on Nov. 19.
"Not only are we seeing companies adjust their rates downward even more, we are also seeing them improve their array of policy offerings to stay ahead of their competitors," said Insurance Commissioner Nonnie S. Burnes. "The promise of better rates for good drivers and better products for everyone is coming to fruition in the Massachusetts auto insurance market and consumers will start to experience these benefits firsthand when they begin to shop around this winter."
Burnes said her department will be closely scrutinizing the amended filings to make certain that consumers across the state are being treated fairly. The rate review period can extend to 45 days. She sai the division will be examining each company filing to determine whether insurers are, as required, using driving record and experience for primary rating factors, refraining from drawing on banned socioeconomic factors, including education, homeownership and credit information, for rating and underwriting purposes and that the final rates are actuarially sound.
The next round of rate filings for policies with effective dates on or after May 1, 2008 can occur anytime after February 15, 2008.
"Drivers who have policies with April effective dates can expect to receive their renewal notices in the mail – and, if they are good drivers, news of lower rates – by mid-February," said Burnes.
The department is also planning to launch a website during to help jumpstart comparison shopping among the state's auto insurers. "We want consumers to be able to go to a central, trusted location so that they can make informed choices about the prices and policies that work best for them," Burnes said.
In addition to the new consumer website, Burnes said she and her staff will be conducting regional outreach among consumers, agents, legislators and other interested parties "in an effort to offer information and guidance about managed competition's new rules, inherent benefits and available resources" in the coming weeks and months, timed to coincide with the staggered issuance of renewal notices and policy effective dates.
"We want to get word out to consumers in every corner of the state about the exciting opportunity they now have to take advantage of competitive rates and innovative policies," said Burnes.
Source: Mass. DOI
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