Massachusetts Independent Insurance agents have been opposing the use of credit scores, education level, as well as occupation for quite a while now. These are factored in while underwriting auto insurance policies and the agents have put a petition seeking to ban such pricing, on the State’s ballot.
The MAIA or the Massachusetts Association of Insurance Agents has stated that it has filed the required 10 signatures with the Attorney General’s Office. This will begin the process of putting forward the petition on the 2012 ballot to prevent insurance companies from using socioeconomic factors such as occupation, credit scores, or levels of education while underwriting or rating of policies.
The opposition by the group against the pricing practices pits the agents against the very companies for whom they sell the policies.
However, a trade group for auto insurance companies in the state has said that the agents were not happy with the competitive market in the state and if the ban was passed then it would end most of the premium discounts, which drivers presently enjoy.
The MAIA’s petition reflects the legislation that the group filed during the session – the Senate Bill No. 461, which prohibits the use of socioeconomic factors.
Frank Mancini, President of MAIA, has stated that they were intent on passing this bill through a legislative process, but also felt that it was important to keep the rest of the avenues open.
The auto insurance premiums, the MAIA argue, should be based on an individual’s driving record as well as driving experience, to the maximum extent possible. At present, Massachusetts only has administrative regulations in place, in order to prevent the usage of these socioeconomic factors.
Mancini & group believe that without formal legislation, the state insurance commissioner had the discretionary powers to amend the rules at any point in time after conducting a formal public hearing.
Joseph Murphy, who is the current insurance commissioner, however, has already indicated that he does not intend amending the regulatory prohibitions that are in place, but Massachusetts agents do not want to leave these issues to the discretion of the regulatory bodies.
Mancini also stated that using these factors to set up auto insurance rates was really unfair, unreliable, and discriminatory as well. If there are two people who live in the same neighborhood and have identical driving records, they should not be charged differently just because one of them lost their jobs or happened to fall behind on paying their medical bills on time.