Lawmakers advancing bill to safeguard insurance discounts
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State legislators appear poised to take steps to prevent hundreds of thousands of individuals from losing auto and homeowners insurance discounts in the new year.
The News Service reported Dec. 15 that lawmakers were hearing calls from the insurance industry to take action to safeguard discounts applied to 322,000 vehicles and 142,000 homes in Massachusetts.
"People are going to lose their discounts" without legislative intervention, John Murphy, executive director of the Massachusetts Insurance Federation, told members of the Joint Committee on Financial Services on Dec. 1. He added, "We can't offer a discount that's not permissible by law."
At issue is a law, which has been suspended 12 times over the years, that requires 35 percent of employees eligible for a group marketing discount, or credit, to participate in that plan within two years of the plan being organized by an employer, union or other organization and approved by state insurance regulators. Among states with similar requirements, the 35 percent threshold in Massachusetts is the highest in the nation, according to Murphy, and only 5.4 percent of homeowner groups and 11 percent of auto groups would likely meet the requirement, based on state estimates.
The Financial Services Committee on Wednesday, Dec. 23 approved legislation extending the law once again, until Jan. 1, 2018. The original legislation (H 864) is sponsored by Third Assistant Minority Leader Rep. Susan Wiliams Gifford of Wareham and Bridgewater Republican Rep. Angelo D'Emilia.
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