Insurance Reform News

MASSPIRG praised Attorney General Martha Coakley’s action announced today to stop companies from systematically overcharging consumers.

With unanimous votes in both the House and the Senate, the legislature passed the bill to preserve the auto insurance appeals board. The appeals board allows drivers to appeal “at-fault” determinations by their insurer company which can often result in significant increases in auto insurance premiums.

Under the new “managed competition” auto insurance rating system in Massachusetts, many good drivers will receive rate increases and many bad drivers will receive large rate decreases, based on factors having nothing to do with their driving records, according to a new report entitled ‘How You Drive’ Takes A Backseat to ‘Who You Are’: (Mis)Managed Competition in the New Massachusetts Automobile Insurance Market, released by two consumer groups – the Center for Insurance Research and MASSPIRG.

Boston. According to a bulletin issued by the Office of the Attorney General, the auto insurance rates filed by the auto insurers last week are on average worse than reported. The bulletin (attached here), released after a review of the insurers’ filings, found that the average rate decline was only 6% -- not 7.7% as calculated by the Division Insurance.

Contrary to recent news headlines and to statements by the Commissioner of Insurance, the newly deregulated auto insurance industry in Massachusetts will result in excessive premiums for consumers.

The final auto insurance regulations, issued by Insurance Commissioner Nonnie Burnes on October 5, 2007, include significant loopholes that will undermine competition and harm consumers, concluded MASSPIRG and the Center for Insurance Research. The two consumer groups have long been involved in advocating for consumer protection in the auto insurance rate setting process.

Yesterday, Insurance Commissioner Nonnie Burnes proposed to ban some but not all discriminatory or unfair rating and underwriting factors under a new set of auto insurance regulations, and failed to adopt other vital consumer protections in the regulations.

Ten consumer groups urged Insurance Commissioner Nonnie Burnes and Governor Deval Patrick to continue a longstanding ban on unfair and discriminatory auto insurance practices in Massachusetts.

BOSTON—Consumer advocates urged the Joint Committee on Financial Services to support An Act to Reduce Auto Insurance Costs and Premiums in the Commonwealth SB 646, filed by Senator Tucker (Andover), which would lower auto insurance premiums for all drivers.

MASSPIRG and the Center for Insurance Research, two leading insurance groups, strongly oppose the decision announced today by the Division of Insurance to adopt an “assigned risk plan.” The assigned risk plan will allow insurers to reject drivers – even those with perfect driving records – based on non-driving factors such as credit scores, income, education, and home ownership.

BOSTON—Chairman Mariano's auto insurance bill, released today from a legislative committee and is essentially the same proposal filed by the Governor is a giveaway to the auto insurance industry at the expense of Massachusetts drivers," said Deirdre Cummings, MASSPIRG's consumer program director.

Two of the states leading consumer advocacy organizations, the Center for Insurance Research and MASSPIRG, are calling on Julianne Bowler, the Commissioner of Insurance, to invoke her authority and require the insurance companies to pull the plug on a new add campaign full of false and misleading statements.

Consumer groups and lawmakers plan to urge the Legislature's Joint Committee on Insurance to support a bill prohibiting insurers from using credit scores in underwriting or to set premiums for homeowners, renters and even, in the future, auto insurance at a public hearing at the State House on Tuesday, March 9, 2004.