Representatives of the insurance industry, state regulators and the general public met yesterday at the first of two scheduled public hearings to consider a 7.8 percent increase in Massachusetts auto rates insurers are seeking.
The industry had sought a 2.5 percent rate hike last year, but instead the State Rating Bureau (SRB) cut rates by 8.3 percent. According to local media reports Auto Insurers Bureau spokesman Dan Johnson pointed out that while most expenses, such as electric bills and the price of gasoline had increased, insurers are seeing a decreases in their profit margins as rates are set too low.
State Asst. Attorney General Peter Light disputed this claim, and pointed out that over the last 10 years insurers have had an average of 4 percent greater premium income than they have paid out. SRB spokeswoman Norma Brettell reportedly indicated that insurers’ loss ratio for the year 2000 was 65.2 percent, an indication that their operations continued to be profitable, and an argument against rate increases.