BOSTON -- The feud over overhauling Massachusetts’ auto insurance system that has played out in dueling TV and radio ads for months may move to the State House as soon as this week.
 
On one side is Fairness for Good Drivers, a group including local and national insurance companies such as Liberty Mutual Insurance of Boston and MetLife, that want less regulation and more competition in Massachusetts’ auto insurance market.
 
They are behind the commercials declaring "good drivers pay more for auto insurance so bad drivers can pay less." The ads (which are no longer airing) featured Massachusetts drivers declaring the current system -- which is highly regulated and limits variety in pricing between customers -- is "not fair."
 
On the other side of the auto insurance feud is the Massachusetts Coalition for Affordable Auto Insurance for All, which includes Commerce Insurance Co. of Webster, Arbella Mutual Insurance of Quincy and some independent insurance agents.
 
The Coalition until recently ran TV and radio commercials with New Jersey drivers warning that auto reforms in their state, similar to changes proposed at the State House, jacked up their rates. The Garden State drivers said their insurance coverage was affected by factors including whether the driver carried a credit card balance or parked on the street.
 
Fairness wants Massachusetts’ current rate-setting system changed; the Coalition does not.
 
Gov. Mitt Romney last year proposed doing away with the state’s unique auto insurance setup, where state regulators set the rates insurers charge. The idea is to draw more big national insurance companies that now refuse to do business here and thus lower prices through competition.
 
Yet the Coalition argues Romney’s bill could translate to higher costs for drivers besides so-called bad drivers, and lead people to drop their insurance coverage and thus increase premiums for other drivers.
 
The Legislature’s joint Financial Services Committee is under a deadline to act on Romney’s bill by June 15.
 
Committee House Chairman state Rep. Ronald Mariano, D-Quincy, last week said he is working on a modified version of Romney’s bill, and hopes to release it before the end of May.
 
Yet it is not clear what kind of reception Mariano’s bill will receive.
 
Committee Senate Chairman state Sen. Andrea Nuciforo, R-Pittsfield, has voiced concerns about competitive rate setting.
 
Mariano is not looking to do exactly what the governor proposed or what Fairness wants, though they’re all, generally, looking to open up the auto insurance market in Massachusetts and change the current system for apportioning high-risk drivers.
 
There has been little talk at the State House about auto insurance reform, thanks in part to an 8.7 percent insurance rate decrease ordered late last year that some say has taken the steam out of the debate. But anyone with a TV or radio likely has seen the ad wars.
 
"Fairness" spokesman James Harrington, the executive director of the Massachusetts Insurance Federation in Boston, charges the Coalition ads are misleading, in part because more details are not given about the New Jersey motorists’ driving histories. Harrington pointed out New Jersey’s insurance commissioner has described auto reforms there as successful.
 
Coalition spokesman Doug Bailey said the ads his group ran about problems in New Jersey were meant to show that some people in that state struggled under the reforms because insurers use "rating variables" like having a blue collar job and a credit card balance. The ads were not intended to imply all New Jersey drivers struggled, he said.
 
The Coalition maintains the way to lower auto insurance premiums in state is to lower Massachusetts’ accident rate, which is the highest in the nation, Bailey said. Therefore his group has advocated for road improvements and legislative reforms to crack down on drunken driving, increase seat belt usage and require more training of teen drivers.
 
It is not clear if Mariano’s bill will call for allowing insurance companies in Massachusetts to use "rating variables" allowed in New Jersey -- such as education level, credit score and occupation. Now insurers are limited to basic variables in Massachusetts: types of vehicles, where vehicles are garaged, driving records and how long drivers have had licenses.
 
If auto insurance reform is debated before the legislative session ends July 31, adding "rating variables" likely will be a hot topic of debate. State Sen. Scott Brown, R-Wrentham, who sits on the Financial Services Committee, said he is looking forward to see what rating variables are included in the forthcoming bill.
 
"This is not uncommon," Brown said about having variables in the rate-setting formula beyond the basic ones Massachusetts now has.
 
Brown said he is "in favor of any plan whatsoever that changes the present plan that we have."
 
"The system we have now, we’re losing carriers and providers and we are subsidizing people that have chronically bad driving records," he said.
 
State Rep. Paul Loscocco, R-Holliston, said he has not weighed in on one side or the other of the auto reform battle. Still, he said his "eyebrows go up" after hearing that reforms could allow insurers to weigh factors such as education level in setting rates.
 
"If that’s being looked at as part of it, I want to see in the final draft to what extent and what the downside is," Loscocco said.
 
State Sen. Karen Spilka, D-Ashland, said despite the advertising frenzy she has heard little about auto insurance in recent months.
 
"The phones are not ringing from constituents," Spilka said.

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By Emelie Rutherford/ Daily News Staff
 
(Emelie Rutherford can be reached at 617-722-2495 or erutherford@cnc.com.)

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