Mass. Gov. Deval Patrick said a new plan to increase competition in the regulated Massachusetts auto insurance market strikes a fine balance between the free market and government control.
“It neither affirms the status quo nor jumps headlong or without controls into the Wild West of competition,” the governor said Tuesday during a news conference. “The idea is to advantage good drivers and make sure we are not harming good drivers wherever they are.”
The transition to “managed competition” will continue to give the state strong regulatory control to protect consumers from excessive rates, but will also introduce more competition and create more choice and lower premiums, Insurance Commissioner Nonnie S. Burnes said in unveiling the plan.
Critics say the plan could end up benefiting insurers more than consumers.
Deirdre Cummings, legislative director for the consumer advocacy group MassPIRG, said the group supports competition, as long as it is based on driving records, and not other factors. She said it wasn’t clear if the plan would ban insurers from using other factors.
“We, like all consumers, want insurers to be able to compete, but to do so without using unfair rating or underwriting practices or gouging the public,” Cummings said in a statement Tuesday.
Massachusetts in the only state where state regulators, not the market, set car insurance rates.
The new competitive rates should be available for consumers with policies renewing on or after April 1, 2008, Burnes said.
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