Election becomes battleground in car insurance war
The corporate dogfight over the future of the state's auto insurance system hasn't gone away, it's just shifted to a new arena: the race for governor.
Commerce Insurance of Webster and Liberty Mutual Insurance of Boston, the two key players in the insurance fight, have placed big bets on the gubernatorial candidates they believe will do them the most good.
Liberty is backing Lieutenant Governor Kerry Healey , who has pledged to continue Governor Mitt Romney's push for a more deregulated system where companies would set their own rates.
Campaign finance records indicate Liberty employees donated $19,700 this year to Healey and her lieutenant governor running mate Reed Hillman , and another $6,500 to the Republican State Committee, which is handling direct mail efforts for Healey.
Commerce wants to keep the existing system, in which state regulators set auto insurance rates, and is supporting Democrat Deval L. Patrick , who has yet to stake out a public position on the issue, though he indicated to the Globe last week he favors working within the current system. Commerce officials this year have donated $27,100 to Patrick and his lieutenant governor running mate, Timothy P. Murray .
James Ermilio , senior vice president and legal counsel at Commerce, said he doesn't know where Patrick stands on auto insurance . But he said he was hopeful Patrick would listen to both sides before taking a position.
"We know where the Romney-Healey administration stands," Ermilio said. "They've been right up front on this topic and quite hostile to our company. They want to favor the out-of-state companies."
Liberty and Commerce lead two industry factions fighting over the future of the state's auto insurance system. The battle between the two groups reached a crescendo earlier this year when both sides launched ad campaigns that subsided only after the Legislature adjourned for the year without passing any legislation.
Commerce then turned its attention to the governor's race. Employees of Commerce, many of whom supported a string of Republican gubernatorial candidates in the 1990s before backing Romney's Democratic challenger Shannon O'Brien in 2002, are choosing the Democrat again this year.
Company employees, directors, lobbyists, and many of their spouses donated $7,200 to Murray on Sept. 2 and nearly $20,000 to Patrick five days later.
Liberty employees funneled most of their donations to Healey in March. In all, 48 company employees donated $18,700 to Healey and $1,000 to Hillman. Three employees broke ranks and donated a total of $750 to Patrick.
Edmund F. Kelly , the Liberty Mutual chief executive who was by Romney's side in June 2005 at a Brookline press conference when the governor called on the Legislature to scrap the state's "Soviet-style" auto insurance system, donated $5,000 on March 15 to the Republican State Committee. Two other Liberty employees donated a total of $1,500 to the committee.
James MacPhee , senior vice president at Liberty, said the national insurer supports Healey's efforts to open the market up to competition. "I would contrast that with Deval Patrick and say I don't think we know his position," he said.
In a brief interview last week, Patrick indicated he wouldn't support wholesale changes in the state's auto insurance system. "This isn't easy," he said. "We could do with more competition, in the framework we have now."
Patrick said he supported socializing some of the risk associated with automobile insurance, particularly subsidies that flow from suburban to urban drivers. "That fundamental policy judgment is right," he said. "The question is: How within that framework do we get more competition?"
Patrick noted that when he worked for
Other auto insurance companies have shown less interest in the governor's race. Executives at Hanover Insurance of Worcester donated $2,350 to Patrick and Murray and two of those same executives, including chief executive Frederick Eppinger , donated a total of $500 to Healey.
Three top officials at Boston-based Plymouth Rock Assurance Corp., including chief executive James F. Stone , donated a total of $1,200 to Patrick. Two executives at Premier Insurance of Worcester, including chief executive Richard E. Welch Jr. , donated a total of $450 to Patrick.
The chairman of Encompass Insurance of Boston, Andrew Carpentier , donated $500 to Healey, and a handful of employees from Safety Insurance of Boston gave $250 to Murray and $150 to independent Christy Mihos .
John F. Donohue , the chief executive of Arbella Mutual Group of Quincy, which has sided with Commerce on most auto insurance issues, donated $1,000 to Healey and Hillman early in the year and $750 to Patrick and Murray more recently. Other Arbella employees contributed $875 to the Healey-Hillman campaign and $275 to Patrick and Murray.
Bruce Mohl can be reached at mohl@globe.com; Peter J. Howe can be reached at howe@globe.com
(Correction: Because of a reporting error, a story in yesterday's Business section on gubernatorial campaign contributions by auto insurance executives incorrectly identified Andrew Carpentier of Encompass Insurance. He is the regional vice president and chief operating officer of the company's Massachusetts operations.) 