Massachusetts Attorney General Martha Coakley’s Office has released a report that criticizes deregulation of the auto insurance market in the state.
The report,"Automobile Insurance: The Road Ahead," comes two years after Massachusetts replaced a highly regulated market with a system of “managed competition” that enabled insurers to set their own rates and reject applicants. The report charges that deregulation has not benefited consumers and had resulted in less transparency in the rate-setting process.
“When the Division of Insurance introduced the new deregulated auto insurance system nearly two years ago, they contended that this system would result in better rates for consumers,” Coakley said in a statement. “While the long-term results of this new system remain to be seen, our office is concerned that consumers may not, in fact, be getting the best rates and the protections they deserve.”
Among the changes the report recommends are creation of an insurance website to provide consumers with side-by-side insurance quotes from all insurers and the elimination of penalties for leaving an insurance company early. The report also backs limits on the types of information insurers can gather to rate a policy, including a ban on the use of credit scores.
“We hope that this report will serve as a roadmap to make the necessary changes to improve our auto insurance rate-setting system,” Coakley said.
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