Why is there no competition amongst Massachusetts car insurance?

I have to write a term paper about a state, local, or federal issue and I have decided to write about why massachusetts is the only state in the coutry that will now allow any competition amongst car insurance providers. It's an issue amongst drivers state-wide and Im wondering if someone knows anything about this obscene policy that might help me put this puzzle together. If someone has any sites or just general knowledge that may help me, I would appreciate it.

Will the last insurance company in Mass please turn out the lights when they leave? I work at a small car insurance company and when I want to cut the tension in a meeting, I suggest we sell in Massachusetts; breaks 'em up every time. Even independant sells in 49 states, everywhere but Mass.

A site I've recommended in the past would be...

http://www.knowledged.info/go.php?link=i...

Hope that helps.

Take a look at the enormous amount of money auto insurance writers contribute to MA lawmakers campaign fundraising, and the answer will be obvious.

Richard

Apparently Massachusetts is changing its approach. This article presents both sides of the argument and the background of the previous (non-competitive) approach, which might help you: http://www.boston.com/cars/news/articles...

This law has recently changed in Massachusetts. Some time in the next few months there will be competitiveness amongst the insurance companies.

There will be some competitiveness amongst the insurers that already deal in MA but big name companies like Geico, Allstate, State Farm etc. are still not going to be setting foot in MA. This state sucks!

The roots of this go back many years. The reason for little or no competition is that Mass heavily regulatesthe business and sets insurance rates. Many companies opted out as they did not feel they could be profitable. I believe some even had to pay to get out of the Mass market - that's how badly they wanted out. Another probem with the tightly regulated environment is that it can lead to regulatory favoritism: Mass has arcane rules about how much can be charged, and also determines how the more costly "high risk" drivers get assigned to different insurance companies. The rules can be structured to favor some players over the others...

One of the problems with Mass is that certain communities have astronomical accident and theft rates, and insurance premiums in those places would go through the roof if insurance were completely unregulated. (Which is one of the reasons why they started regulating rates in the first place.) The net result is that places that are low risk subsidize the ones that are high risk.

I'm not sure whether the regulatory/rate setting rules came first or after, but a major change in car insurance occurred in the early 70s when no-fault insurance was made law under the Frank Sargent adminstration. Before no fault if you were in an accident you had to go after the other party's insurance company to get your vehicle fixed or to pay for any damages and I guess it was not easy.

Maybe someone else can fill in more on this as I was pretty young back in that era and I only recall bits and pieces of it.

Some suggestions on where to research this - look up no fault insurance, and Frank Sargent. I believe the Mass Insurance Commission is the name of the agency that regulates auto insurance.