THE WATER COOLER ; New Road Rules for Insurers

By JAY FITZGERALD

Auto insurers would be permanently banned from using personal details about motorists - such as their marital status, education, profession and homeownership - when setting premium rates under a new "managed competition" system outlined yesterday by state Insurance Commissioner Nonnie S. Burnes.

Burnes, who surprised many last month by announcing her support for a major overhaul of the state's current system for setting auto insurance rates, also is proposing a one-year ban on insurers using motorists' credit ratings when setting prices for insurance premiums.

In a statement, Burnes said the one-year ban would give state officials more time to study whether credit ratings can eventually be used by insurers, though some lawmakers are bitterly opposed to any use of these ratings when setting premiums.

Burnes filed her draft proposals for a new "managed competition" system yesterday. A hearing on the proposals will be held next month.

Unless her proposals are blocked by lawmakers or via court action, the new rate system would be phased in over a year, starting next April.

Currently, Massachusetts is the only state in the country that sets rates for auto insurance.

Burnes said the goal of her overhaul is to establish insurance competition, reduce costs for motorists and make sure rates are primarily based on motorists' driving records.

A spokesman for the Property Casualty Insurers Association of America said he couldn't comment on Burnes' specific proposals yesterday, though many in the insurance industry support major changes to the current system.

Originally published by By JAY FITZGERALD.

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