Editorial ; Rate Drop is Nice, Reform Even Nicer

April brought rare good news in the mail for Massachusetts motorists, many of whom saw their auto insurance rates drop big- time when their renewal forms arrived.

So the pressure to reform the system should be off, right?

Nope - not by a long shot.

Yes, the rate reductions are a welcome change for drivers who've grown accustomed to annual increases (to say nothing of the shrinking pool of insurance carriers from which they must choose).

Insurers say a crackdown on fraud and a corresponding drop in claims paved the way for the rate cut, which will bring the statewide average annual premium to $899 - the lowest in five years. Good news, of course.

But while rates may have come down, that pool of insurers that is still willing to write auto policies here is as small as it was last year and the year before - and HALF THE SIZE it was 15 years ago.

Today at the State House the Joint Committee on Financial Services will take testimony on 15 auto insurance-related bills, including several that would reform the system Gov. Mitt Romney affectionately (and accurately) dubbed "Soviet-style." We're the only state in the union that tells carriers what they can charge, and they've voted with their feet.

If past is prologue, lawmakers who feel the squeeze from the big insurers - the ones that benefit by the existing system - will be frozen by inaction. At best, the Legislature may adopt the recommendations of a task force appointed by Gov. Deval Patrick, which has recommended "some form" of competitive rating but doesn't go nearly far enough.

The rate drop this year may mean drivers have a little extra in their pockets to fill the tank. But they still don't have any choice.

(c) 2007 Boston Herald. Provided by ProQuest Information and Learning. All rights Reserved.