Mass. Auto Rates To Drop 7.8% On Average

"Not only are we seeing companies adjust their rates downward even more, we are also seeing them improve their array of policy offerings to stay ahead of their competitors," said Commissioner Burnes.

She announced there will be a new Web site and outreach effort to publicize the rate changes.

Her division advised that any calculations of an average premium decrease is preliminary, predicting that next year insurance shoppers will choose lower-priced carriers, and the shifting that occurs will drive down the statewide average rate even further.

Ms. Burnes promised that her division will continue its "thorough review process to ensure that companies are abiding by the new rules and adhering to the system's extensive consumer protections."

"I take my role as a consumer advocate very seriously," she added. "We will be closely scrutinizing the amended filings to make certain that consumers across our state are being treated fairly."

According to the division, the commissioner's rate review period can extend to 45 days and the agency will be examining each company filing to determine whether insurers are, as required, using driving record and experience for primary rating factors.

The division said it will also check to see that insurers are refraining from drawing on banned socioeconomic factors, including credit information, education and home ownership, for rating and underwriting purposes, and that the final rates are actuarially sound.

The second round of rate filings for policies with effective dates on or after May 1, 2008, can occur anytime after Feb. 15, 2008.

"Drivers who have policies with April effective dates can expect to receive their renewal notices in the mail–and, if they are good drivers, news of lower rates–by mid-February," said Ms. Burnes.

She announced that the insurance division will launch a Web site during this period to help "jumpstart comparison shopping among the state's auto insurers."

Besides the new consumer Web site, the commissioner and division said there will be a regional outreach among consumers, agents, legislators and other interested parties in an effort to offer information and guidance about managed competition's new rules, inherent benefits and available resources.

Several statewide consumer forums will be held in the coming weeks and months, timed to coincide with the staggered issuance of renewal notices and policy effective dates.

"We want to get word out to consumers in every corner of the state about the exciting opportunity they now have to take advantage of competitive rates and innovative policies," said Ms. Burnes.

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

The new regulation also changes the manner in which the state apportions high-risk drivers to insurers who are obliged to offer coverage. Some carriers had complained that the old arrangement was inequitable, allowing some companies to game the system and avoid their proportional share of the residual market.

For the past two weeks, insurers have been issuing a slew of press releases trumpeting the fact that they were offering auto rate reductions. For good drivers, policy rates will go down impressively. One company said it would offer a 30 percent cut for its best customers.