The proposed rates of 15 auto insurers have been reviewed and approved by the Massachusetts Division of Insurance since the implementation at the beginning of this year of a “managed competition” system for setting auto insurance rates. The proposed rates of 4 auto insurers remain under review, a process that reportedly includes evaluation of each insurer’s filings by an independent and experienced actuarial firm to ensure that the filings adhere to the guidelines set forth by the managed competition regulations. The Division’s approval of the proposed rates means that, as of April 1, 2008, at least these 15 auto insurers will be allowed to offer consumers the rates, discounts and coverage options included in their separate filings.
Attorney General Martha Coakley has unsuccessfully opposed proposals filed by several of Massachusetts’ largest auto insurers. The Attorney General has argued that these insurers’ rates were excessive and has questioned the inclusion of contingent commissions in the rate filings. To date, however, Insurance Commissioner Nonnie Burnes has rejected the Attorney General’s objections, noting that the standards for determining the reasonableness of rate filings are different in a competitive market place and that market competition will necessarily control insurers’ target profit provisions.
To view a recent press release by the Massachusetts Insurance Commissioner concerning the managed competition system, please click here.