Focusing on auto insurance system

By Massachusetts Coalition for Affordable Auto Insurance for All

Thursday, October 6, 2005



A top executive for the state's largest auto insurance company called Governor Romney's plan to dismantle the Massachusetts auto insurance system unnecessary and outlined ways to improve the current system.



"Today, I want to focus on three issues that have been raised in this discussion recently: the crisis in the homeowners insurance industry, the auto insurance residual market system, and fraud in auto insurance," said James Ermilio, senior vice president and general counsel of The Commerce Insurance Company, in testimony before a legislative auto insurance hearing in Lawrence.



Recently, the Governor's supporters are raising these three issues, or rather trying to push these three panic buttons, in order to get Legislators' attention to overhaul auto insurance."



Ermilio focused on two areas that hold special interest for Lawrence residents, the Governor's proposed Assigned Risk Plan and insurance fraud fighting efforts in the city of Lawrence.



An ARP is a Trojan Horse for the competitive rating scheme that will allow companies to charge MA drivers the rates that they charge in other states," said Ermilio.



He also congratulated the residents of Lawrence and used them as an example for the rest of the state as a community that tackled auto insurance fraud head-on.



"The tremendous progress made in the fraud-fighting effort right here in the Town of Lawrence, thanks to a well-coordinated effort with local authorities, helped eliminate tens of millions of dollars in fraudulent costs from the system," said Ermilio.



"With Legislative leadership, those types of coordinated efforts in focused areas across the state will save drivers real money in their annual premiums."



Ermilio encouraged residents of Lawrence to seek the truth about auto insurance. "Ask the Governor if out-of-state companies want to enter Massachusetts to reduce our premiums, why don't they do it today? Ask the Governor, 'If you want to reduce rates for good drivers at the expense of bad drivers, why don't you order the Commissioner to do so?'"