Massachusetts Attorney General Martha Coakley is proposing new regulations that she says will rein in sales and underwriting practices for auto insurers and agents in the state.
The regulations come in response to a report issued by her office last year on the state of Massachusetts auto insurance market, which was largely deregulated in 2008.
“We have seen some positive changes since the auto insurance marketplace was de-regulated two years ago,” Coakley said in a statement. “However, there are still many improvements that should be made within this system to better protect consumers.” Coakley says the moves will boost transparency efforts, help consumers to better shop for policies and halt deceptive advertising by insurance companies in the state
Coakley’s office will hold two public hearings next month on the regulations, which include specific items that ban the use of credit scores to determine premiums and codify rules for statements that insurers make when they advertise their prices.
The proposal is being met with skepticism from the industry.
Paul Tetrault, Northeast state affairs manager for the National Association of Mutual Insurance companies called the regulations “unnecessary and ill-advised, to say the least.
“The underlying premises of the regulations, and the report issued by Attorney General Coakley’s office, are that consumers are not faring well under managed competition and that consumers are not protected adequately under existing regulations. Nothing could be further from the truth: the increased competition has resulted in most consumers saving money and having meaningful choices in the marketplace for the first time in decades,” Tetrault added.
Added Frank O’Brien, vice president for the Property Casualty Insurers Association of America (PCI): “We are very concerned and disappointed that Attorney General Coakley has filed a set of proposed regulations with the Secretary of State’s Office that could deprive consumers of the discounts and benefits they are enjoying under the new managed competition system.
Frank Mancini, president and CEO of the Massachusetts Association of Insurance Agents, said that one of the new regulations in particular – a requirement that agents quote an insured with every single carrier they represent – might cause a lot of headaches for agents in the state.
“That is just impractical given all the various rates, discounts, credits and everything else all the companies have,” he said. “One would need literally hours just to complete an application. The people who wrote these requlations clearly aren’t on the front lines of an agency giving people quotes.”