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September 27, 2010

Brokers-State In Negotiations To Further Privatize RMV Services

Photo/Pamela Barberio NO MORE LINES: State Registry of Motor Vehicle offices like this one in Worcester may soon see competition from local insurance brokers.
Photo/Courtesy Frank Mancini, president of the Massachusetts Association of Insurance Agents.

No one likes going to the Registry of Motor Vehicles and waiting in line for hours just to get a driver's license or car registration renewal.

So Frank Mancini, president of the Massachusetts Association of Insurance Agents (MAIA) in Milford, which represents about 1,500 independent insurance brokers across the state, has a solution: Give the business to the brokers.

And thanks to a state law passed earlier this year, local insurance agencies will be able to offer many of the same services as a registry of motor vehicles satellite office.

“What we’re hoping to do is handle some of the registry transactions that would keep the most people out of the registry lines,” Mancini said. “If this is a service we can offer that will alleviate some pressure at the state, it’s a win-win.”


For the state, which has closed eight RMV branches in the last year, the new plan could reduce traffic at RMV offices. Last year, there were more than 1 million new registration transactions processed in Massachusetts and about 2.5 million registration renewals, according to the agency.

For the local brokers, it’s an opportunity to find a competitive advantage over out-of-state or online-only insurance carriers like Geico.

Discussions are ongoing between the state and the MAIA to implement a system that would allow hundreds of agents around the state to process existing and new RMV transactions from their offices electronically.

Some insurance agents already offer registry services in their offices, including basic transactions such as registry renewals and plate cancellations. Other brokers offer a runner service, in which one of the agency’s employees goes to the registry to process transactions for the customers.

But the new law allows the state to enter into discussions with brokers and other “auto-related third-party entities” that provide general services to the public to expand RMV offerings outside the state locations.

Tech Specs

The biggest hurdle is creating a technology infrastructure that is efficient and secure. Ann Dufresne, a spokesperson for the RMV, said state officials are exploring options such as using an already-existing virtual provider network that some brokers use, or creating an entirely new network infrastructure to support the move.

Expanded RMV services at broker offices could be in place by early next year, Mancini said. Dufresne said it’s still too early to say when the services will be expanded. She said after the technology portion is resolved, the state would have to go through a bid process to allow brokers to offer the service.

Local brokers in the area say the timing couldn’t be better.

John Woods, president and CEO of Thomas Woods Insurance Agency in Worcester, said ever since managed competition in the auto-insurance industry was rolled out in Massachusetts in 2008, life has been different for independent brokers.

Managed competition, which removed some state restrictions on auto insurance rates and packages, has been a double-edged sword.

On the one hand, brokers are able to offer more competitive insurance packages, Woods said. But on the other hand, the deregulation also opened the door to large national insurance companies, increasing competition around the state for the independent brokers.

Being able to offer RMV services directly from broker offices, however, would give the independent agents a leg up on out-of-state national brands.

“We have more competition than we’ve ever had, so we need to come up with new ways to provide services to our clients,” said Woods, who is also president of the Worcester County Independent Insurance Agents Association.

On The Go

Arthur Fair III, of Fair & Yeager Insurance in Natick, employs an RMV runner at his office. The employee collects various registry transactions that customers need each day, runs them to the local registry offices, waits for them to be completed, then comes back to the office where customers can pick up the completed material.

“It’s the best way we have to offer the services,” he said.

Establishing a direct connection with the registry would be much more efficient, he said, and an investment he would be willing to make.

Some brokers use an electronic vehicle registration (EVR) system that the state has set up, Dufresne said. But of the more than 1,500 members that are part of the MAIA, there are only 165 agents registered through the EVR system.

The EVR is a custom software program sold through a state-contracted provider that allows the agents to perform functions including renewing and cancelling license plates. To be eligible for the EVR program, a broker must perform at least 50 transactions a month. Mancini said that threshold is too high for small insurance brokers. The system MAIA and the RMV are negotiating to create would be an online-only function, which Mancini hopes will allow access to even small brokers.

But it won’t just be insurance brokers offering such services when a plan is fully rolled out.

AAA, the national automobile club that provides roadside assistance to members, inked a deal last year with the Massachusetts RMV to provide certain RMV services in its three Massachusetts offices in Worcester, Framingham and Plymouth.

After a pilot agreement in 2009 began the partnership, AAA applied for and won a state contract to provide expanded services. Dufresne said AAA was the only entity in the state that applied for the contract to provide the service.

Since July 1 of this year, AAA offices have performed license renewal and registration services, which Lloyd Albert, spokesperson for AAA, said has been working out very well.

Dufresne said once IT professionals have determined the best way to connect RMV services to brokers, the state will have to solicit bids through a normal procurement process to award the new services to insurance agents. She said it’s too early to say if the MAIA would be able to apply for a contract on behalf of all insurance agents or if each independent broker would have to apply for a contract on their own.

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