BOSTON - The attorney general and the state Division of Insurance on Wednesday proposed steep cuts in Massachusetts auto insurance premiums that could save some drivers between $85 and $180 annually on their bills, depending on the proposal.
 
Attorney General Tom Reilly proposed an 18.2 percent rate cut that would reduce the average driver’s policy by about $180 per year.
 
The State Rating Bureau, the statistical arm of the state Division of Insurance, recommended an 8.3 percent decrease, which would reduce the cost of the average rate per vehicle by about $85.
 
Both proposals were submitted to state Commissioner of Insurance Julianne Bowler, who will issue a decision on 2007 rates by mid-December. The new rates take effect April 1.
 
The state’s auto insurance industry submitted a proposed 3.7 percent cut in August, citing declining injury claims resulting in part from a crackdown on fraud. The industry proposal also recommended that the discount for insuring more than one car with the same carrier be increased from 5 percent to 10 percent.
 
It was the second straight year the Automobile Insurers Bureau of Massachusetts has recommended a cut rather than an increase. The organization last year recommended a much smaller 0.1 percent reduction. Bowler ultimately approved an 8.7 percent cut.
 
Reilly cited the same fraud crackdown as the basis for his proposal.
 
"Insurers are collecting windfall profits at the consumer’s expense," Reilly said. "The insurers have profited from our efforts to reduce fraud and lower losses. Now is the time for them to pass these savings on to consumers."
 
The SRB filing also includes a proposal that the Commissioner approve a 10 percent discount for people who continuously maintain private passenger automobile coverage without any breaks in coverage for a 12-month period.
 
Massachusetts in the only state where auto insurance rates are set by state regulators. The process begins with the industry’s recommendation, followed by the attorney general, who represents the interests of drivers. Auto insurance is mandatory.

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By Associated Press

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