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Romney Wants to Send "Soviet-Style" Massachusetts Auto Insurance

Massachusetts Governor Mitt Romney (R) is out with an auto insurance proposal that would allow auto insurers to set rates up to a cap of...
June 7, 2005

Massachusetts Governor Mitt Romney (R) is out with an auto insurance proposal that would allow auto insurers to set rates up to a cap of 15 percent on liability coverage. Insurers would be required to provide up to a five percent discount to good drivers with clean records. Insurers would still be required to file rates for scrutiny by the state insurance department, but the department would no longer have an annual rate proceeding in order to set uniform rates for all companies. In addition, voluntary insurance agents would no longer have their commission levels set by the state; rather they would negotiate those with their insurers. Commissions on business placed in the involuntary market would be ten percent.

Romney said he wants to end the current system under which the state sets rates for all insurance companies, a system he called "Soviet-style" because it dictates the prices and products and "benefits only a handful of companies that are doing very, very well." "Some well-connected companies will fight with everything they have to keep the status quo, the Soviet-style system," Romney said. "There are some enormous special interests so be prepared for some creative reasons on why things shouldn't change."

Mass. Gov. Proposes Plan to End 'Soviet-Style' System (Insurance Journal 6/1/05)

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