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STATE HOUSE NEWS SERVICE (Massachusetts)
Apr 01, 2005

by Michael P. Norton

LA-BASED ADVOCATE WITH LOCAL TIES PITCHES REPEAL OF NO-FAULT AUTO INSURANCE

STATE HOUSE, BOSTON, MARCH 29, 2005 -- A California-based consumer advocate who says Massachusetts drivers could have saved $200 million if the state had repealed its no-fault auto insurance system five years ago told reporters Tuesday morning that he does not intend to launch a Bay State ballot drive.

"I'm just here today to deliver this report," Harvey Rosenfield, the author of a 1988 auto insurance reform ballot law in California, said during a press conference at the Omni Parker House hotel this morning.

The report, released by the non-profit, non-partisan Foundation for Taxpayer and Consumer Rights, concludes that repealing the no-fault system, which offers limited coverage to those who cause accidents and their innocent victims while aiming to minimize lawsuits, would immediately lead to fewer insurance claims and lower rates.

Noting premiums in Massachusetts are the third highest in the nation, Rosenfield said the no-fault system encourages reckless driving and the filing of more insurance claims. "It's basically twice as many people being paid under no-fault," he said, arguing insurers use claims volume statistics to justify rate increases.

Based on premium data filed by insurance companies with the National Association of Insurance Commissioners, the report found that premiums are 19 percent higher in no-fault states than in states with so-called personal responsibility systems. Rosenfield, who grew up in Randolph, said no-fault systems offer an extra, unnecessary layer of health insurance, encourage poor driving, and discourage competition among insurers for customers.

Sen. Andrea Nuciforo (D-Pittsfield) listened to Rosenfield's analysis, and then said it's "hard to tell," whether the no-fault system should be scrapped. There are strong arguments on both sides, said Nuciforo, who co-chairs the Legislature's Joint Committee on Financial Services, which
reviews bills dealing with insurance.

"The notion of no-fault is to keep people from suing," said Nuciforo, who added that lawmakers are intent on closely examining proposals to introduce competition into the state's highly regulated auto insurance market and to improve the so-called residual market, or the system governing coverage of drivers deemed high risk.

"We're going to look at it very carefully," Nuciforo said, referring to proposals repealing the no-fault system.

Asked who would cover the property damage and medical bills of drivers who cause accidents under a personal responsibility system, Rosenfield said: "If you're at fault, unless you bought comprehensive coverage for your own car, you would have to pay out of pocket. In terms of your own medical injuries... that would be out of your own pocket, unless you had health insurance."

Rosenfield said Massachusetts should consider changes that promote competition, strong regulation, broader insurance industry disclosure requirements, and the elimination of industry anti-trust exemptions. California also has an elected insurance commissioner, a situation that Rosenfield said can be an advantage or a disadvantage.

Massachusetts in 1971 became the first state to adopt a no-fault system. Rosenfield said six states, including Connecticut, Georgia and Pennsylvania, have repealed no-fault systems and 10 states have such systems currently.
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