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Report: Reining in Wall Street
The Massachusetts Automobile Insurance Study Group
The Study Group makes the following recommendations:
1. The Commissioner of Insurance should examine alternatives to move towards competitive rating using flex-bands while maintaining affordability for all drivers, minimizing disruption to the market and maintaining consumer protections. This may include, but is not limited to, allowing price flexibility for all coverages or continuing with a “fixed and established” system for compulsory coverages while allowing price flexibility in optional coverages.
2. Existing rate subsidies for urban and inexperienced drivers should be maintained.
3. Rating factors should be limited to the current rating factors: years of driving experience, number and severity of at-fault accidents, traffic violations and territory.
4. The Commissioner should delay implementing any assigned risk plan until able to meaningfully evaluate the results of the 2006 redistribution of exclusive representative producers (agents) and subsequent revisions to the Commonwealth Automobile Reinsurers rules.
5. The Commissioner should implement a streamlined approval process to allow insurers to set rates and seek approval for endorsements providing enhanced coverages or premium reductions to the standard auto policy.
6. The Safe Driver Insurance Plan (SDIP) should be examined for opportunities to more accurately reward safe and responsible driving.
7. Cost containment initiatives should be implemented to reduce accidents and the number and cost of claims.
8. Steps should be taken to provide consumers with more information to assist them in purchasing insurance that is suitable for them at the best price with the best service. A description of the information that the Study Group considered and the reasons for its recommendations follows.
The Study Group acknowledges the high level of cooperation and support that the Division of Insurance provided throughout its proceedings. The members of the Study Group included insurance executives, an academic specializing in insurance, a consumer representative, and members of the business and professional communities. The members intensively addressed contentious and complex issues in just over six weeks. The constructive and respectful tone that was maintained throughout, as well as the considerable contribution of volunteer time are noteworthy.
At least a majority of the members support each of the recommendations. To the extent any members disagreed, they were invited to submit a statement.
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