NAII Letter to Mass. Editor Again Stresses Need for Auto Insurance Reform

December 24, 2003

Gerald L. Zimmerman, Senior Counsel for the National Association of Independent Insurers, followed up yesterday’s letter to a Wall Street Journal editor (See IJ Website Dec.23), with a letter to Steve Smith, Editorial page Editor of The Republican, praising his recent article on the necessity for auto insurance reform in Massachusetts.

“Your recent editorial on Massachusetts’ auto insurance market (‘Hitting the brakes on auto insurance,’ Dec. 19) is a colorful and accurate depiction of a long-standing problem that is ripe for the fixing right now,” wrote Zimmerman.

“One of the biggest problems in Massachusetts is the archaic Commonwealth Automobile Reinsurers (CAR) system, which distributes high-risk policyholders unevenly among participating companies,” he continued. “CAR and the accompanying state-set rate process have produced an uncompetitive market with only 19 auto insurers doing business in the state and an unhealthy concentration of almost 90 percent of the auto insurance market among 10 companies.”

Zimmerman also noted that Governor Romney and the attorney general are both pushing for reform, and that insurers and agents are “promoting the creation of the Massachusetts Automobile Insurance Plan (MAIP), a system which would ensure a more even distribution of high risk drivers among insurers and encourage companies to write more policies in all parts of the state.” This would “bring the Massachusetts residual market plan in line with the rest of the country.”

He also cited the recent turnaround in New Jersey (See IJ Website Dec. 22) as proof that “the same thing could begin to happen in Massachusetts if the insurance industry, lawmakers and regulators all agreed to cooperate for the good of the consumer.”

Topics Auto Massachusetts Market

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