While a request by Massachusetts’ top insurers to raise homeowners’ insurance rates was approved, the chairman of the state senate committee with oversight of the Division of Insurance is looking to have the approval reconsidered and opening hearings to determine if the increases are reasonable.
Massachusetts Insurance commissioner Daniel Judson recently received a letter from State Senator Michael J. Barrett—who serves as the Senate’s Post Audit and Oversight Committee chairman—that cited an analysis conducted by Attorney General Maura Healy. Healy had concluded that the approved rate increases were excessive, and that rates should be decreasing instead.
Two insurers, Safety Insurance Co. and Mapfre USA Corp, were set to raise their homeowners’ insurance rates by 9%, on average.
Healy’s analysis determined that Mapfre should have reduced its home insurance rates instead.
She based this conclusion on the company’s profits and losses over the past few years.
On the other hand, Healy found that Safety was partly justified in requesting an increase, but noted that the company needed to raise its rates by no more than 3%.
In the letter, Barrett urged the Division of Insurance to carefully scrutinize the increase plans and undergo public hearings before completely approving the rate hikes. Although consumers have been making similar requests, the state department rarely hosts such public hearings.
“We need a formal, serious public consideration of the new rates,” Barrett said.
Chris Goetcheus, a spokesperson for the Division of Insurance, stated that the current homeowners’ insurance rate process used by the agency is fine as it is. Goetcheus said that the agency reviews rate filings “with the best interest of both the consumers and the marketplace in mind to ensure that rates are not excessive, unfairly discriminatory, or inadequate.”
