Regulators Announce Third Anniversary of Mass. Auto Insurance Reform

2011-04-14 16:25:07 (GMT) (WiredPRNews.com - Auto News, Press Releases, insurance)

Boston, MA (WiredPRNews.com) Government officials are marking the third anniversary of the introduction of “managed competition,” a move that they are saying led to increased competition and lower Massachusetts auto insurance rates.

Before Massachusetts transitioned to the current structure, the car insurance industry was much more heavily regulated, with government officials setting rates rather than insurers themselves. The practices instituted by regulators at that time differed in important ways from those that insurers in other states commonly use.

Because of the inordinately tight restrictions, a number of major insurance companies stayed on the sidelines, opting not to do business at all in the state. But since the system of managed competition was introduced, the current administration says, more than a dozen insurers entered the state market, and rates on the whole have since declined.

Source: http://1.usa.gov/dVaxLW

According to the National Association of Insurance Commissioners (NAIC) and the Massachusetts Commissioner, Joseph Murphy, rates were actually on the decline prior to the regulatory switch.

NAIC data show that, year to year, average expenditures on policies in the state declined by an average of 6.7 percent between 2005 and 2008. Murphy has attributed the decline to three factors in addition to managed competition: downward rate trends at the national level, fraud-prevention initiatives and mild winters that resulted in lower-than-average claims frequencies.

To learn more about this and other coverage issues, readers can go to http://www.onlineautoinsurance.com/massachusetts/ where visitors will find informative resource pages and a quote-comparison generator that can help consumers quickly find the best rates for a policy.