Massachusetts 2025-2026 Regular Session

Massachusetts House Bill H1263 Compare Versions

Only one version of the bill is available at this time.

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2	2	HOUSE DOCKET, NO. 2348 FILED ON: 1/16/2025
3	3	HOUSE . . . . . . . . . . . . . . . No. 1263
4	4	The Commonwealth of Massachusetts
5	5	_________________
6	6	PRESENTED BY:
7	7	Rita A. Mendes
8	8	_________________
9	9	To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
10	10	Court assembled:
11	11	The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:
12	12	An Act relative to reducing racial and socioeconomic inequities in auto insurance premium
13	13	pricing.
14	14	_______________
15	15	PETITION OF:
16	16	NAME:DISTRICT/ADDRESS :DATE ADDED:Rita A. Mendes11th Plymouth1/16/2025 1 of 4
17	17	HOUSE DOCKET, NO. 2348 FILED ON: 1/16/2025
18	18	HOUSE . . . . . . . . . . . . . . . No. 1263
19	19	By Representative Mendes of Brockton, a petition (accompanied by bill, House, No. 1263) of
20	20	Rita A. Mendes relative to reducing racial and socioeconomic inequities in auto insurance
21	21	premium pricing. Financial Services.
22	22	The Commonwealth of Massachusetts
23	23	_______________
24	24	In the One Hundred and Ninety-Fourth General Court
25	25	(2025-2026)
26	26	_______________
27	27	An Act relative to reducing racial and socioeconomic inequities in auto insurance premium
28	28	pricing.
29	29	Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority
30	30	of the same, as follows:
31	31	1 SECTION 1. Chapter 175E of the General Laws, as appearing in the 2022 Official
32	32	2Edition, is hereby amended by inserting, after section 4, the following section:-
33	33	3 Section 4A.
34	34	4 a) The following terms as used in this section shall have the following meanings:
35	35	5 “Classification,” the process of grouping risks with similar risk characteristics so that
36	36	6differences in costs may be recognized.
37	37	7 “Classification plan,” any plan, definition or rule for the classification of risks including,
38	38	8without limitation, classification by territory, driver or vehicle characteristics or use, and
39	39	9experience rating or merit rating plans. 2 of 4
40	40	10 “Commissioner,” the Commissioner of Insurance, appointed pursuant to Section 6 of
41	41	11Chapter 26 of the General Laws, or his or her designee.
42	42	12 “Expenses,” that portion of a rate attributable to acquisition, field supervision, collection
43	43	13expenses, general expenses, taxes, licenses, commissions, residual market loads and fees.
44	44	14 “Filer,” the Insurer, Insurance Company Group or Rating Organization that files the rate
45	45	15at issue.
46	46	16 “Insurance Company Group,” two or more Insurers under the same ownership or control,
47	47	17as defined in Section 206 of Chapter 175 of the General Laws.
48	48	18 “Insurer,” any corporation, association, partnership, group or individual authorized to
49	49	19write private passenger motor vehicle insurance in Massachusetts.
50	50	20 “Merit rating,” a rating procedure utilizing past motor vehicle accident and traffic
51	51	21violation experience of the operators insured under the policy to forecast future losses by
52	52	22measuring their loss experience against the loss experience of operators in the same classification
53	53	23to produce a prospective premium credit, debit or unity modification.
54	54	24 “Premium,” the final cost of a policy, or coverage within a policy, to an individual
55	55	25policyholder based on the particular drivers and motor vehicles insured under the policy.
56	56	26 “Rate,” the cost of insurance per exposure unit, whether expressed as a single number or
57	57	27as a prospective loss cost with a factor to incorporate an individual Insurer's expenses, profit, and
58	58	28variation in loss experience, prior to any application of individual risk variations based on loss or
59	59	29expense considerations, and does not include minimum premium. 3 of 4
60	60	30 “Rate filing,” a filing of rates, rating factors or relativities, classification plans, or rating
61	61	31manuals, together with supporting information, prepared by an Insurer, Insurance Company
62	62	32Group, or Rating organization and filed in accordance with Section 7 of this chapter.
63	63	33 “Rating factor,” a number that is greater than zero that is applied to a rate to reflect the
64	64	34specific characteristics of the risk, including but not limited to, rating territory, driver or vehicle
65	65	35characteristics, merit rating plan, coverage level, and deductible option.
66	66	36 “Rating organization,” a rating organization duly licensed under section 8 of Chapter
67	67	37175A of the General Laws.
68	68	38 “Supporting information,” (a) the experience and judgment of the filer and the experience
69	69	39or data of other Insurers or others relied upon by the filer; (b) the interpretation of any other data
70	70	40relied upon by the filer; (c) descriptions of methods used in making the rates; and (d) any other
71	71	41information relied on by the filer in support of its rate filing, as the Commissioner may require to
72	72	42be filed.
73	73	43 b) For private passenger motor vehicle insurance rates, a filer may group risks by
74	74	44territorial classification based on the commissioner’s designation of territories pursuant to
75	75	45Section 4 of this chapter.
76	76	46 c) Each rating plan for private passenger motor vehicle insurance that includes territorial
77	77	47classifications shall assign a weight of no more than seventy-five per cent to individual territorial
78	78	48loss cost indication and no less than twenty-five per cent to the state-wide average loss cost
79	79	49indication. A filer must actuarially justify individual territorial loss cost indication and statewide
80	80	50average loss cost indication with supporting information included in the filer’s rate filing. 4 of 4
81	81	51 d) A private passenger motor vehicle insurance rate shall be held to be unfairly
82	82	52discriminatory if it is based on a rating plan that does not conform with subsections c and e of
83	83	53this section. The commissioner shall disapprove, after a hearing, or suspend any rate filing, or
84	84	54portion thereof, that contains a rating plan that does not conform with subsections c and e of this
85	85	55section.
86	86	56 e) The filer shall not make any changes or revisions to, or otherwise implement in any
87	87	57manner, a classification plan and/or rating factor that in any way limits, mitigates or eliminates
88	88	58the impact of subsection c of this section.
89	89	59 f) The filer shall include a complete and detailed explanation of how it is complying with
90	90	60subsections c and e of this section.
91	91	61 g) Every insurer licensed to write private passenger automobile insurance shall make a
92	92	62rate filing to comply with this section within 60 days of its passage.
93	93	63 h) The intent and purpose of this section is to reasonably limit the difference in rates and
94	94	64premiums between territories, thereby diminishing the disparate impact on policyholders.
95	95	65 i) The commissioner shall have the authority to promulgate additional rules and
96	96	66regulations to implement the provisions of this section that further its intent and purpose.