Insurer's sales tactics questioned

Less than a week after Progressive Insurance started selling auto policies online in Massachusetts, independent agents are criticizing its sales tactics and the attorney general is looking at the company's website.

The Division of Insurance, which approved Progressive's rates, said information on the website is potentially misleading, even though the company is "in full compliance" with state regulations.

But insurance agents, who do not yet sell policies for Progressive, called the site misleading and said it asks for personal information that's prohibited under state regulations.

Progressive of Mayfield Village, Ohio, said it plans to make changes to make sure it conforms with Massachusetts' rules. But it disagreed with most of the agents' complaints.

In a statement, John Barbagallo, Progressive's head of agency operations, characterized the disagreement as a matter between the insurer and the agents, not a consumer issue.

"We are committed to providing products and services to independent agents to help them compete effectively in the market and to help them grow," Barbagallo said.

Progressive, the nation's third-largest auto insurer, is the first new company to enter Massachusetts since the Division of Insurance overhauled the auto-coverage market. Rates, previously set by regulators, are now set by insurance companies. Companies also have more freedom to create products and services.

Progressive started selling Massachusetts policies May 1 through its website, progressive.com. It plans to also sell policies through agents next year. About 80 percent of individual auto policies in Massachusetts are sold through agents.

Kimberly Haberlin, a spokeswoman for Insurance Commissioner Nonnie S. Burnes, said Progressive's rates were approved after an exhaustive review. The Division of Insurance is satisfied Progressive is not using prohibited information in setting rates.

But, she noted, "When we began to review the website last Thursday, we immediately noticed that language specific to credit scores, gender, and marital status had the potential to create the impression that they were not in compliance."

The division will also examine other issues raised by the insurance agents' group, Haberlin said.

Cathy Wilton-Bransch, a Progressive product manager, said she was unaware the Division of Insurance had any concerns about Progressive's website.

In a statement, Attorney General Martha Coakley said she is examining the issues raised by the agents' trade group.

"We are in the process of reviewing Progressive's website, and we share many of the concerns raised by the Massachusetts Association of Insurance agents, including but not limited to offering only a six-month policy on their website, as well as their own stated use of credit scores for setting rates," Coakley said in a statement. "As we proceed through the deregulation of automobile insurance rates, we will continue to be concerned about apparent and actual violations of the Consumer Protection Act, which forbids unfair or deceptive business practices."

Francis A. Mancini, chief executive of the Massachusetts Association of Insurance Agents, said his trade group is acting to protect consumers.

"This isn't the first time we've taken on an agency company if we don't think they're doing the right thing," he said. "This is insurance agents looking out for the consumer."

In particular, he said, the prompts and menus on the website could leave a consumer with insufficient coverage, when opting for more coverage might increase a premium by just a few dollars. He also questioned why the site asked for personal information - such as Social Security number, sex, and marital status - and why it states the company will obtain an applicant's credit report. The new rules prohibit companies from using such socioeconomic factors in setting premiums.

"If they're not going to use those factors in setting rates, why are they asking for them?" said Mancini.

Wilton-Bransch said the company uses a standard online form nationwide. It is changing some parts of the website, including a disclosure that says the company uses credit reports. Though Progressive obtains credit reports from Massachusetts applicants, they are used only to confirm an applicant's identity, she said.

The agents' group also criticized Progressive's offer of either six- or 12-month policies, when only 12-month policies have been offered to consumers in Massachusetts for years. Though the site prominently discloses the fact some quotes are for six-month policies, Mancini said, it may confuse consumers used to buying only annual policies.

"I don't know how many more places on the website we could say, 'It's a six-month quote,' and so far the comments from consumers are clear they understand they bought a six-month policy," said Wilton-Bransch.

She declined to specify how many Massachusetts motorists have signed up with Progressive.

Jeffrey Krasner can be reached at krasner@globe.com.