(Source: Attorney General Martha Coakley) – BOSTON – In 2012, Attorney General Martha Coakley’s Office successfully advocated to prevent two unprecedented rate increases sought by the insurance industry and saved Massachusetts homeowners and employers more than $187 million.
In May, the AG’s Office obtained a ruling from the state Commissioner of Insurance blocking the Massachusetts Property Insurance Underwriters Association’s (FAIR Plan) home insurance rate request after arguing that the proposed rate increase for more than 150,000 Massachusetts families was excessive. In August, the Commissioner of Insurance also rejected a $175 million rate request by the workers’ compensation insurance industry after the AG’s Office opposed it claiming the proposed increase was based on inflated net loss trends and unreasonable projections.
“These proposed rate increases could not have come at a worse time for people,” AG Coakley said. “The savings we achieved by opposing unjustified rate hikes will reduce costs for consumers and employers and help create jobs throughout the Commonwealth.”
In both rate cases, the insurance industry had sought approval for large increases that would affect policyholders across the state – including double digit rate hikes for small businesses and coastal homeowners. The AG’s Office, in its role as rate payer advocate, intervened in the administrative rate-setting proceedings and litigated two rate trials using expert witnesses and documentary evidence to show that the proposed rate increases were unjustified.
The FAIR Plan, which consists of the state’s homeowners’ insurance companies, is designed to provide coverage at reasonable prices to consumers who cannot otherwise obtain insurance in the open marketplace. This includes approximately 60,000 families on Cape Cod and 100,000 families in other coastal and urban areas where insurance companies have declined to issue home insurance policies. Massachusetts law requires that FAIR Plan rates not be excessive.
Rates for workers’ compensation insurance are set at least every other year in an administrative rate hearing before the Commissioner of Insurance. Massachusetts businesses are required to purchase workers’ compensation insurance to provide coverage for expenses and lost wages for workers injured on the job.
These matters were handled by the experts and attorneys of the Attorney General’s Insurance and Financial Services Division, which represents the public interest in these rate trials, and advocates for fair rates for insurance customers.