Insurance commissioner considers competitive rates

Insurance Commissioner Nonnie S. Burnes signaled that she is seriously considering introducing some form of competitive rate-setting to the Massachusetts auto insurance system.

At a hearing today on whether the state is ready for auto insurance competition, Burnes didn't indicate what she plans to do. But her questions of witnesses focused on whether she had the legal authority to introduce competition and what impact that would have.

"She is seriously, seriously considering moving to a competitive system," said Deirdre Cummings, consumer education director at the Massachusetts Public Interest Research Group, who opposes such a move at this time.

The last time a commissioner authorized competitive rate-setting was in 1977. Rates skyrocketed for some young and urban drivers, prompting the Legislature to scrap the program. Massachusetts is currently the only state in the nation where regulators set all auto insurance rates.

The State Rating Bureau, a unit representing consumers within Burnes's Division of Insurance, testified that rates would not skyrocket if competition was introduced.

"Competition is sufficient to be an effective regulator of rates in the commonwealth," said Glenn Watkins, senior economist for Technical Associates Inc., a Virginia-based firm hired by the bureau to evaluate the state's auto insurance market.
(By Bruce Mohl, Globe staff)