New Regulations Draw Peerless Back To Mass.

Keene, New Hampshire-based Peerless Insurance announced today it will be the first new auto insurer to enter Massachusetts since a rules change designed to spur competition.

The insurer, part of Liberty Mutual Group in Boston, said it would file rates by mid-February for auto and home. On Monday, Massachusetts-based insurers are due to file competitive auto rates for the first time in 30 years.

Peerless' entry in the state was hailed by an insurance industry trade group, Property Casualty Insurers Association of America (PCI), which said it showed the state's new managed competition concept will help consumers.

Other outside insurers have also expressed interest in Massachusetts, but Peerless is the first to formally announce it will enter the state

Prior to the inauguration of the new managed competition regulation, insurers' rates were set by the state insurance commissioner and the only variance allowed was for groups or good driver discounts.

In addition, the new system sets up an assigned risk pool for high-risk drivers where insurers would take on such residual market business based on the amount of business they do in the state.

Under the previous system, there were complaints that some insurers were able to game the system to avoid taking on the riskier business.

Mike Christianson, president of Peerless, said the company is well positioned to enter the personal lines auto and homeowners market in the state because it has been offering commercial lines insurance in Massachusetts since 2001.

"We have a very outstanding agency plant located throughout Massachusetts with 150 outlets and we will bring reentry with that group, said Mr. Christianson.

Gary Gregg with Liberty Mutual Agency Markets said the amount of new hiring for the effort would depend on its initial success, but that there will be territory managers appointed to the existing agency base and some personal lines agency specialists will be hired.

The new regulations put in place by Insurance Commissioner Nonnie S. Burnes ban the use of credit information for both rating and underwriting during a transition period to allow time for a study on the impact it could have on consumers.

Insurers will also be barred from using gender, marital status, education, occupation, homeownership and other socioeconomic factors in rating and underwriting.

Peerless left the state 20 years ago, and according to the commissioner's office the number of insurers has declined from 35 in 1990 to 19.

Peerless is a member of Liberty Mutual Group's Agency Markets business unit.

"Consumers like choices when making purchase decisions," said Edmund F. Kelly, Liberty Mutual Group chairman, president and CEO. "Along with the recent increase of our direct sales force in Massachusetts, adding Peerless Insurance's distribution through independent agents underlines our commitment to providing a range of options to Massachusetts consumers."

Frank O'Brien, vice president and northeast regional manager for PCI, said the Peerless action means "consumers are seeing tangible benefits from the proposed reforms of the state's auto insurance system even before they take affect."

Mr. O'Brien mentioned that PCI had attended a presentation made to hundreds of insurance executives last month in Boston where Commissioner Burnes said she "already sees competition in the marketplace as the state's insurers begin to offer new products--like protection against identity theft, full replacement and towing coverage--to attract fresh business and hold on to policies they already have."