The Massachusetts Automobile Insurance Study Group
2007-03-15
Executive Summary
The Study Group makes the following recommendations:
1. The Commissioner of Insurance should examine alternatives to move towards competitive rating using flex-bands
while maintaining affordability for all drivers, minimizing disruption
to the market and maintaining consumer protections. This may include,
but is not limited to, allowing price flexibility for all coverages or
continuing with a “fixed and established” system for compulsory
coverages while allowing price flexibility in optional coverages.
2. Existing rate subsidies for urban and inexperienced drivers should be maintained.
3.
Rating factors should be limited to the current rating factors: years
of driving experience, number and severity of at-fault accidents,
traffic violations and territory.
4.
The Commissioner should delay implementing any assigned risk plan until
able to meaningfully evaluate the results of the 2006 redistribution of
exclusive representative producers (agents) and subsequent revisions to
the Commonwealth Automobile Reinsurers rules.
5. The Commissioner should implement a streamlined approval process to
allow insurers to set rates and seek approval for endorsements
providing enhanced coverages or premium reductions to the standard auto
policy.
6.
The Safe Driver Insurance Plan (SDIP) should be examined for
opportunities to more accurately reward safe and responsible driving.
7. Cost containment initiatives should be implemented to reduce accidents and the number and cost of claims.
8.
Steps should be taken to provide consumers with more information to
assist them in purchasing insurance that is suitable for them at the
best price with the best service. A description of the information that
the Study Group considered and the reasons for its recommendations
follows.
The
Study Group acknowledges the high level of cooperation and support that
the Division of Insurance provided throughout its proceedings. The
members of the Study Group included insurance executives, an academic
specializing in insurance, a consumer representative, and members of
the business and professional communities. The members intensively
addressed contentious and complex issues in just over six weeks. The
constructive and respectful tone that was maintained throughout, as
well as the considerable contribution of volunteer time are noteworthy.
At least a majority of the members support each of the recommendations.
To the extent any members disagreed, they were invited to submit a
statement.
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