Massachusetts insurance agents scored a victory as the state’s governor signed a new law allowing them to keep their rights to clients’ expiring auto policies – a move sought by agents since the state’s insurance system was deregulated two years ago.
The change means agents maintain their status as producers of record for residual market policies, a move that prevents an insurer from taking ownership rights on policies if the insurer offers voluntary coverage.
It was one of two major changes to the state’s auto insurance system signed into law by Gov. Deval Patrick. The other: Massachusetts ended its controversial practice of allowing new auto insurers to avoid participating in the state’s residual market. That two-year rule, also known as Rule 30, was enacted in 2008 when the state deregulated its auto insurance system and replaced it with a system of “managed competition.”
The carrier law change goes into effect Jan. 1, meaning any insurer that enters the market between now and the end of the year will remain exempt. Insurers operating under that exemption currently will continue to do so.
Eleven new insurers have entered the state since 2008, including three of the industry’s largest direct writers – Geico, Allstate and Progressive.