Mass. AG asks auto insurers to lower rates
Attorney General Martha Coakley is urging the state's automobile insurers to lower their 2008 rates, saying their initial filings last week included more than $200 million in extra profits and payments to agents that wouldn't have been allowed by regulators in previous years.
Coakley said the state's average premium would have fallen 11 percent if the extra profit and agent commissions were removed from the company filings.
The attorney general said the initial company rate plans filed last Monday would have driven down the state's average premium 6 percent, not the 7.7 percent announced by Insurance Commissioner Nonnie S. Burnes. Coakley said Burnes lumped group discounts in her calculation, resulting in an apples-to-oranges comparison with previous years.
Insurers have until noon Tuesday to amend their initial filings, which cover policies renewing April 1. Some companies have already said they plan to adjust their rates downward.
Coakley was traveling and unavailable for comment yesterday, but her office issued a statement in which she said she was asking questions to make sure that information is available to all parties as the state transitions from a system where state regulators set all auto insurance rates to one where companies set their own rates subject to regulatory approval. The Patrick administration calls the new system "managed competition."
"At this stage, it is too early to make a determination about whether managed competition will advantage or disadvantage consumers," Coakley said in her statement.
(By Bruce Mohl, Globe staff)
