BOSTON - Massachusetts' chief insurance regulator is coming under fire for making rule changes to the state's new competitive auto insurance market following telephone conference calls with insurance company officials.
Local lawmakers, consumer advocates and the state attorney general's office contend even small changes to the rules for the auto insurance market, which affects some 4 million Massachusetts drivers, should have been made during public hearings.
Insurance Commissioner Nonnie Burnes approved rules for the state's "managed competition" system for setting rates this fall.
After approving those regulations for competitive rate setting, Burnes' office on Sept. 27 started hosting twice-a-week telephone conference calls lasting about an hour and a half.
In an interview, Burnes said the calls were meant to ensure a smooth transition to competitive rate setting after 30 years of state-set auto insurance rates.
"We wanted to make sure everyone had an opportunity to tell us at the same time something they didn't understand," Burnes said. "We had public meetings here. You could come to the division or call in."
Meeting critics question how open the process was, though.
"It doesn't sound like it's an open process and that concerns me," said Sen. Frederick Berry, D-Peabody.
"I think there has not been enough public testimony," said Rep. Barry R. Finegold, D-Andover. "I realize the insurance commissioner needs to speak with different groups. I think it should be done more in the open than what has transpired."
He said any changes to the original regulations should have been put off until there could be public hearings.
Along with insurance companies, some consumer groups and members of the attorney general's office were asked to participate and did. Notes of the meetings are posted on the Web site of an industry group, Automobile Insurers Bureau of Massachusetts.
But there was no public notice of the meetings. And, according to the Oct. 18 meeting notes, participants did not have to be identified.
After getting feedback, the insurance commissioner would issue a bulletin sometimes clarifying or changing different parts of the new regulations.
Burnes said her intent was to be inclusive.
"I don't know how many more people could be involved," Burnes said. "Sometimes there were 60, 70 in the room."
Local lawmakers, consumer advocates and the state attorney general's office contend even small changes to the rules for the auto insurance market, which affects some 4 million Massachusetts drivers, should have been made during public hearings.
Insurance Commissioner Nonnie Burnes approved rules for the state's "managed competition" system for setting rates this fall.
After approving those regulations for competitive rate setting, Burnes' office on Sept. 27 started hosting twice-a-week telephone conference calls lasting about an hour and a half.
In an interview, Burnes said the calls were meant to ensure a smooth transition to competitive rate setting after 30 years of state-set auto insurance rates.
"We wanted to make sure everyone had an opportunity to tell us at the same time something they didn't understand," Burnes said. "We had public meetings here. You could come to the division or call in."
Meeting critics question how open the process was, though.
"It doesn't sound like it's an open process and that concerns me," said Sen. Frederick Berry, D-Peabody.
"I think there has not been enough public testimony," said Rep. Barry R. Finegold, D-Andover. "I realize the insurance commissioner needs to speak with different groups. I think it should be done more in the open than what has transpired."
He said any changes to the original regulations should have been put off until there could be public hearings.
Along with insurance companies, some consumer groups and members of the attorney general's office were asked to participate and did. Notes of the meetings are posted on the Web site of an industry group, Automobile Insurers Bureau of Massachusetts.
But there was no public notice of the meetings. And, according to the Oct. 18 meeting notes, participants did not have to be identified.
After getting feedback, the insurance commissioner would issue a bulletin sometimes clarifying or changing different parts of the new regulations.
Burnes said her intent was to be inclusive.
"I don't know how many more people could be involved," Burnes said. "Sometimes there were 60, 70 in the room."
Moreover, Burnes also said the bulletins issued were not new regulations but simple clarifications.
But critics say the process was still deeply flawed. Several meeting participants said some of the actions taken in the bulletins deserved a formal public hearing. In particular, they pointed to a Nov. 8 bulletin implementing a consumer-friendly change to underwriting rules.
Stephen D'Amato, a consultant with the Center for Insurance Research, supports that change. But D'Amato, who in the 1990s worked for the Division of Insurance, said there's a key difference between changing the rules after gathering information on a conference call and doing it after a public hearing - the public doesn't get to weigh in before it happens.
"What's missing is the hearing and people having a chance to see the (proposed) rules before they go into effect and to provide comments relating to specific rules," D'Amato said.
A member of the attorney general's team who was in on the calls would not talk on the record about his concerns. But spokeswoman Melissa Sherman said the attorney general's office has similar concerns.
"We believe that the decisions of the (Division of Insurance) ... should be the subject of the regulatory decision making process, including a public hearing to gather information," Sherman said.
Insurance companies on Monday submitted their proposed rates for 2008 based on the rules the Division of Insurance approved. The companies proposed cutting what drivers pay for insurance by 7.7 percent on average in 2008. Last year, the state approved an 11.7 percent cut.
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