The Massachusetts Association of Insurance Agents (MAIA), a group based in Milford, has put forth a proposal for the 2012 election for a ballot referendum that would stop auto insurers from becoming able to use socioeconomic factors to underwrite their insurance.
This practice is already banned by the state, but the MAIA is seeking to continue making it illegal to use information such as a person’s education, job type, and credit score for determining an individual’s auto insurance premiums.
That said, organizations that represent auto insurers are arguing for the exact opposite, saying that this ballot measure would take the existing regulations a step further, and may actually lead most drivers in the state to have to pay more for their insurance when all is said and done.
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President of the Barre-based Healy Brothers Insurance Agency Inc., William McKenna, said that there is merit to both arguments. He stated that philosophically, he would want to leave socioeconomic factors out of the process for underwriting insurance. He explained this opinion by saying “Why should a foundry worker from Orange pay more just because he’s a foundry worker from Orange?” and that he believes that this would be discriminatory.
That said, McKenna also said that he understood the economic side of using socioeconomic criteria, as they can assist in predicting the chances of the occurrence of a claim. He said that there is value in this action, or insurance companies wouldn’t want to use it to help to determine the risk associated with a given customer.