Massachusetts Attorney General Martha Coakley is pressing auto insurers in the state to lower their 2008 rates, arguing that their initial filings last week included more than $200 million in extra profits and payments to agents that wouldn’t have been allowed under regulations that were relaxed this year.
Massachusetts is on the transition from a system under which state regulators set auto insurance rates to one where companies set their own rates subject to regulatory approval. The attorney general studies each individual proposal submitted to the state for approval by insurers.
Coakley said the state’s average premium would have fallen 11 percent if the proposed extra profit and agent commissions were eliminated from the filings.
She also poked holes in the initial company rate plans filed last Monday. They proposals would have driven down the state’s average premium 6 percent — not the 7.7 percent announced by Insurance Commissioner Nonnie S. Burnes, Coakley said.
The state’s chief law enforcement officer said Burnes lumped group discounts in her calculation, resulting in an apples-to-oranges comparison with previous years.
Yesterday was the deadline for insurers to amend their filings. Several insurers took advantage of it to further lower some of ther rates.
State officials have said “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.
Critics, however, say the plan could end up benefiting insurers more than consumers.
“At this stage, it is too early to make a determination about whether managed competition will advantage or disadvantage consumers,” Coakley said in a statement.
Was this article valuable?
Here are more articles you may enjoy.