On October 5, 2007, Nonnie S. Burnes, Commissioner of Insurance for the Massachusetts Division of Insurance, filed Regulation 211 CMR 79 (Private Passenger Motor Vehicle Insurance Rates) with the Attorney General’s Office. The new regulation is intended to encourage competition and innovation in the automobile insurance market, while maintaining consumer protections. A hallmark of the new regulation is the ban on the use of socioeconomic factors by insurers to set rates. Insurers are now required to give the most weight to driving records and experience.
Since the law has been in effect, 18 of the States’ 19 auto insurers submitted amended rate filings for policies effective April 2008. The average premium among the auto insurers fell by 7.8%, proof, notes Commissioner Burns, that managed competition is working for Massachusetts consumers. However, Massachusetts Attorney General, Martha Coakley, argued that the reduction would be far greater if all the companies removed more than $200 million in extra profits and payments to agents and she urged the auto insurers to lower their 2008 rates even further.
In conjunction with the law going into effect, the Division of Insurance plans to launch a new consumer website, and conduct statewide outreach to publicize the opportunities available to consumers.
InsureReinsure.com will continue to monitor this and other developments.