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