The National Association of Independent Insurers has issued a bulletin noting that two redrafted bills in the Massachusetts Lower House, would change the effective date of the state’s Insurance Commissioner’s annual private passenger auto insurance rate decision and would improve the state’s auto insurance system by eliminating unnecessary costs and confusion.
“Current law requires the Commissioner to issue an auto rate decision by December 15, applying to policies issued or renewed in the ensuring calendar year,” stated NAII assistant general counsel Gerald L. Zimmerman. “January renewals account for about 40 percent of the total for insurers. The time period between December 15 and January 1 is too short for insurers to factor the new rates from the Commissioner’s decision into policy premium computations for January renewals. Instead, they’re initially forced to issue estimates, followed later by final bills, which creates extra work and expense for insurers and agents.”
The NAII said that the Bills, H.B. 1696 and H.B. 1703, “would change the annual effective date of the Commissioner’s rate decisions from January 1 to April 1. For filings by insurers to deviate from the prescribed rates, the legislation would make a hearing permissive rather than mandatory and compress the time for the filing and review of such requests. ”
The bills also include a provision that the new effective date for the Commissioner’s rate decision “will first apply to policies issued on and after April 1, 2005. It also provides that the rate decision applicable to policies issued on and after January 1, 2004 will continue to apply to policies issued through March 31, 2005.”
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