Attorney General Martha Coakley has jumped into a fray between Insurance Commissioner Nonnie Burnes and lawmakers and insurance agents, bringing her into opposition against Burnes – this time, in the hopes of preserving an appeals board unique to the Bay State.
Early this year, Burnes announced the elimination of a state-run appeals board that allows insurance customers to appeal their insurers’ decisions regarding policy cancellations or who is at fault in an accident. According to the Massachusetts Association of Insurance Agents, about half the consumer appeals that reach the board are overturned.
The MAIA have been fighting Burnes’ decision, including lobbying on Beacon Hill for the board’s reinstatement. Last week, Coakley announced she supports that legislation as a “critical tool to protect ratepayers in a deregulated automobile insurance market.”
Coakley sent a letter to Burnes requesting the board’s hearing function be reinstated while the Legislature considered that bill, but also expressed concern that the insurance division would get rid of an independent, third-party review of insurer decisions. The attorney general had written a similar letter in October, opposing the elimination of the board.
All About Autos
The elimination of the board is tied to the sweeping change last year with regard to auto insurance. Burnes changed the state’s heavily regulated insurance system in exchange for “managed competition,” which allows for greater diversity of insurance rates and with it, greater competition among insurers.
As part of the new system, Burnes said because the commonwealth’s auto insurance is deregulated, the board’s consumer protection role was no longer applicable. With greater range of choices in the insurance market, consumers unhappy with their insurers’ decisions can switch providers.
In the event of a contested claim, customers would be able to appeal the decisions with the insurers themselves, but the MAIA said such a system completely fails to protect consumers, as insurers are unlikely to change their minds.
Frank Mancini, head of the MAIA, said response to the legislation has gotten a positive response from lawmakers. The bills, sponsored by state Sen. Stephen Buoniconti and Rep. Paul Donato, have garnered more than 100 legislators’ co-sponsorship.
