Insurance Commissioner Nonnie S. Burnes yesterday kicked off the first rate-setting hearing under a new auto insurance system that allows insurers to set their own rates, subject to government oversight. Attorney General Martha Coakley had called for the hearing to examine rates filed by Commerce Insurance of Webster, the state's largest auto insurer.
But Burnes made it clear that the rate challenge would not turn into one of the lengthy, drawn-out hearings that were typical under the former system, when rates were set by the Division of Insurance. Such hearings would mean "consumers are never going to get decent rates," Burnes said.
Several times she interrupted assistant attorney general Peter Leight, who led questioning for Coakley. "This is an opening statement, not a closing statement," she said to Leight at one point when she thought his initial discussion of the attorney general's concerns went on too long.
Leight questioned Thomas L. Boyer II, a Commerce assistant vice president, about how the company arrived at its proposed 2008 rates, which would be 6 percent lower than its 2007 rates.
The hearing is expected to conclude today. Coakley has also initiated hearings on four other companies' proposed rates. Those sessions will be held this month. The companies are: Arbella Mutual Insurance Co., Safety Insurance Co., Premier Insurance Co. of Massachusetts, and Hanover Insurance Group.
But Burnes has severely limited Coakley's ability to obtain information from the insurers about their proposed rates, making it more difficult for her to show whether the rates are excessive or unfair. Coakley has argued that rates would have fallen faster under the highly regulated system that was in place for 30 years.
Jeffrey Krasner can be reached at krasner@globe.com.
