BOSTON - A coalition of consumer groups wrote to Gov. Deval Patrick
and his insurance commissioner, urging them to make sure the state’s
move toward a more competitive auto insurance market doesn’t lead to
the use of socioeconomic factors to deny consumers coverage or raise
their rates.
The consumer groups are concerned that market
changes being overseen by Insurance Commissioner Nonnie Burnes could
lead to insurers using factors such as education levels, credit scores
and home ownership to determine auto insurance premiums and coverage
eligibility.
The concerns are not new: Consumer advocates have
argued for several years that the state could open the door to the use
of socioeconomic factors if a competitive rate-setting system is
introduced.
This time, the letters sent Wednesday represented a
response to Burnes’ controversial decision last month to shift the
state’s highly regulated system to a more competitive model and her
changes to the way high-risk drivers are insured.
Deirdre
Cummings, a consumer advocate at the Massachusetts Public Interest
Research Group, said she’s worried that insurers will use socioeconomic
factors in their calculations, potentially taking away the ability to
choose an insurer from some good drivers.
Cummings said she’s
pleased that Burnes has expressed skepticism about using such factors
in setting auto rates, but Cummings said she would like to see a
stronger statement promising that such factors won’t be used in the
rate-setting process.
Cummings said the consumer groups, which
include MassPIRG and nine other organizations, are also worried that
the state’s new plan for a residual market - a system to provide
coverage for motorists who insurers don’t want to cover - could lead to
insurers denying coverage to many good drivers. If they wind up in the
high-risk pool under the new plan, the drivers would be assigned an
insurer instead of picking their own.
‘‘Even people with good driving records can be rejected,’’ Cummings said. ‘‘I think that will be a shock for consumers.’’
Kimberly Haberlin, a spokeswoman for the state Division of
Insurance, responded by saying that Burnes has pledged to keep
consumers’ interests in mind as she oversees changes in the auto
insurance market.
‘‘The commissioner has made it very clear that
she will have absolutely zero tolerance for unfair, excessive and
discriminatory rates,’’ Haberlin said in a prepared statement. ‘‘The
move to managed competition will in fact strengthen her ability to
lower premiums and give Massachusetts drivers more choice.’’
Jim
Harrington, executive director of the Massachusetts Insurance
Federation, said the members of his industry trade group are not
opposed to Burnes’ reluctance to use socioeconomic factors in
rate-setting.
‘‘We want to keep the current debate focused on
transitioning carefully to competition and not have the focus shift to
a debate on what’s appropriate underwriting criteria and what’s not,’’
Harrington said.
Jon Chesto may be reached at jchesto@ledger.com .
Copyright 2007 The Patriot Ledger
Transmitted Thursday, August 02, 2007
