Seen in the Boston Globe:
A panel appointed by Gov. Deval Patrick to study ways of reforming Massachusetts’ auto insurance system has recommended curbing state regulation and moving toward competitive, market-based rates.[.]
The group also advised Patrick to delay implementing key changes to the state system pushed by former Gov. Mitt Romney. The former governor wanted to add several demographic factors, such as marital status and credit scores, to the formula for calculating individual rates.
It also urged Patrick to delay a decision on whether to keep or scrap Romney’s new rules for assigning high-risk drivers to automobile insurers until the issue can be studied more.
It might surprise readers who have seen some of my concerns about anti-scoring phobia to learn that I’m not necessarily opposed to the idea that delaying the shift of Massachusetts auto pricing to something akin to what’s done in the other 49 states.
If/when Massachusetts auto insurance pricing, and the market in general, is reformed, it is likely to be a disruptive process. I can easily understand and accept the idea that a massive shift in schemes would likely cause a political backlash that would derail the move to rationalness.
Therefore, a slow phase-in of the rating/underwriting variables accepted as standard in much of the rest of the country would likely be the best option in moving towards a competitive marketplace.
However, I do wonder if perhaps the legislative and regulatory powers that be ought to consider allowing insurers additional freedom in pricing and underwriting auto insurance, in return for providing new capacity to accept homeowners risks on the Cape and along the coasts.