Massachusetts Auto Insurance Regulations Spark Concern

06/04/2010

Late last week, Massachusetts Attorney General Martha Coakley proposed auto insurance regulations that would prohibit credit score-based underwriting practices.

The regulations are also aimed at increasing transparency, prohibiting unfair marketing practices and making it easier to shop for insurance. The insurance industry greeted this proposal with skepticism, according to an article by the Insurance Journal.

Most recently, the Property Casualty Insurers Association of America issued a letter to Coakley expressing their concern about how such legislation could harm consumers. The auto insurance industry in Massachusetts is currently subject to managed competition regulations.

"Under the old system consumers had little choice and thus little reason to shop around," Frank O'Brien, vice president of the PCI, said. "Now, after a year, consumers have been provided with cost savings, a wider variety of products and services and the ability to choose from a wider range of carriers."

Massachusetts lawmakers clashed with the health insurance industry earlier this year, when companies hoped to raise rates above what Governor Deval Patrick said was affordable for small businesses. Ultimately, the double-digit premium hikes were rejected and insurers were forced to charge 2009 rates.

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