MASS. PRESSURE FOR COST STUDY:

Massachusetts’s auto insurance agents are being told that their participation in a new cost study could determine what they will see for future commissions on their auto business. The Massachusetts Association of Insurance Agents (MAIA) is stressing the need for its members’ participation as its actuary, Tillinghast, contacts randomly selected agents this month. The study will pinpoint how much it costs an average agency to service a private passenger auto policy for one year. That number will become the foundation of MAIA’s case to win fair 2005 private passenger commissions in rate hearings this fall. “It’s imperative that agents who are asked to participate do so. Otherwise, everyone’s commission is in jeopardy. You can’t just pass it to someone else and say, “the next guy can do it,'” said MAIA Chairman Bob Vaudreuil. Relatively few agents participated in the previous study, and the Attorney General and State Rating Bureau claimed it wasn’t a credible sample. Insurance Commissioner Julie Bowler agreed and gave it little weight in her decision setting 2003 commissions.