Rate increases fuel calls for explanations

Division of Insurance agrees to hold series of public meetings to gather input and explain reasons for rate increases in Massachusetts

Insurance News

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In Massachusetts, the ratemaking process has become very contentious of late. All signs point to things becoming even more heated over the next couple of months.
 
It all started with a storm, or two, as these things often do. Tornadoes followed by record snowfall led to insurance losses which led to rate increases which led to unhappy homeowners which led to politicians trying to make everyone happy.
 
When all is said and done, though, it is all but certain not everyone will be happy.
 
Paula Aschettino, chairperson of Citizens for Homeowners Insurance Reform is not happy. She said the Massachusetts Division of Insurance has been inconsistent in its process for reviewing and approving rate increases and has tended to favor insurers. “Rate increases have been excessive,” she said.
 
She has asked the Division to open rate hearings to the public, and the Division has responded by agreeing to host a series of “listening meetings” to hear people’s concerns. Aschettino scoffed and said that such meetings will not address the core issues.
 
The state’s attorney general is reviewing rate increases to determine if the increases are warranted, and the state Senate has scheduled its own hearing, Sept. 22, to find out if increases, of about 9 percent this past year, were justified.
 
“The rate increases are justified,” said John Murphy, executive director of the Massachusetts Insurance Federation. “There is nothing wrong with the ratemaking process in Massachusetts. It works very well.” He said that while there are some groups that have been “agitating for years” about rate increases, most consumers in the state are satisfied with their homeowners’ insurance rates.
 
“We have a very competitive landscape with about 150 companies writing homeowners policies and no one company dominating,” he said.
 
Pete Fullerton, spokesperson for the Division, said it is very unusual for the Senate to get involved in something like this. “We look forward to explaining the work we do during the rate filing review process,” he said.
 
He said the public meetings are still in the planning process, and that dates and locations have not been announced. “The Division will consider all the information received in these public sessions, and determine necessary next steps at that time,” he said.
 
In the meantime, bills have been introduced in the state house that might force homeowners’ rates lower or require insurers to provide more information to the department when requesting rate increases. Another piece of legislation could require insurers to use hurricane models that are specific to the areas where coverage is being written.
 

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