Massachusetts motor insurance using South Carolina as a model for the revision
Massachusetts insurance regulatory authorities are closely studying auto insurance reforms in the Palmetto State adopted in 1999 as a model for greater competition in the state of self-assurance.
South Carolina’s insurance commissioner, Ernst CSISZAR, met with officials Division of Insurance last week in Boston, and a task force appointed by you, Mitt Romney, to seek ways for reform Public Service of insurance self-satisfied with the system’s first launch.
Massachusetts experimented with the deregulation of prices of its insurance company once before, in 1977, with disastrous results. Prices doubled and tripled to some drivers in the city centre and the regulation has been hasty.
Consumer advocates are now warning that the system of tinkering can have another Turkey - and the driver to pay Massachusetts, some of the highest insurance premiums could be consistent with a wild horse.
South Carolina’s path to reform several accounts, compared to the smooth Massachusetts’ first experience. But consumers supported the observation of the state also question whether the new system has been improved, the image of the insurance of the state, most pilots.
Massachusetts began its reform efforts in the same place, South Carolina launched its own - residuale”Versicherungsmarkt.
Driver in the rest of value are those who, because of bad driving records or other characteristics that are sympathetic to their insurers, could not buy auto insurance, unless a company was required to they sell them. In Massachusetts, drivers of the policy, with high-risk pool called in a Commonwealth Automobile Reinsurers.
Drivers, whose policies of the pool Deal with the company of their choice and do the same time, the company has a pool. The main difference lies in the fact that companies in their loss of their actions with other companies to participate in the pool.
The drivers, in part because they separately from the rest of the population, tend to offset losses on the income of their premiums - in Massachusetts, the deficit in the market was approximately $ 350 million in 2003. Because their premiums are relatively low for the losses they generate - Supporters of reform say unreasonably low - other drivers at the end of the difference.
South Carolina uses to operate the same market. But where Massachusetts has 7 percent of the insured driver associated with the residual value, South Carolina had 42 percent to its highest point during the year 1992. The deficit in the market has reached $ 200 million in 1995. In the mid 1980, insurance companies began in detail in the bills of their clients were up to cover the deficit. The pool at high risk was a political issue.
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