News Currents

Mass. finalizes rules for managed competition in auto

One week before she approved a final plan, Massachusetts Insurance Commissioner Nonnie Burnes told Insurance Journal that the public and industry should not expect big changes from the original proposal to implement managed competition in auto insurance.

She was right, with one exception. The final regulation clamps down totally on credit scoring, whereas the original had left its use in underwriting a possibility and banned it in pricing for one year only.

Burnes sided with consumer groups, Attorney General Martha Coakley and a few domestic insurers in banning the use of credit scores in both pricing and underwriting indefinitely in her final regulation which will guide insurers filing private passenger rates for use beginning next April. Burnes has said she wants to study credit scoring in more depth.

Many insurers would have preferred that the state allow credit scoring but are just happy that the state is at least moving from its heavily-regulated system where the state sets all rates to one with more freedom to price and underwrite.