Lobbyists are in the way of auto insurance reform
By WILLIAM JOHNSON
"Lobbyist outlay hits record high."
That was the headline in my local paper "The Republican" Jan. 22, 2007. The reporter, Steve Leblanc, cited the amount of money businesses spent on lobbyists in the Commonwealth. Massachusetts is ranked third in the country; California and New York, which are much larger, are the only states ahead of Massachusetts in spending on lobbyists.
In the Bay State, a total of $64.3 million was spent on lobbyists in 2006. The top spender in 2006, Commerce Insurance Co., spent a total of $464,049. In contrast, the Statewide Towing Association (STA), an organization that I head as president, spent $15,000. Just one insurance company spends over thirty times the amount the STA does. The article did not mention how much any other insurance company spent in 2006; it only spoke of Commerce, as they were the top spender.
Former Gov. Mitt Romney tried to reform the auto insurance industry in Massachusetts and failed. Makes you wonder if the amount of money spent on lobbyists had anything to do with the reforms not getting past.
About two years ago, the Division of Insurance (DOI) wanted to change the way high-risk drivers were assigned to different insurance companies. From what I understand, if an insurance company wrote 10 percent of the drivers in Massachusetts, they would get 10 percent of the high-risk drivers.
Commerce Insurance, which has 30 percent of the Massachusetts auto insurance market, did not agree with the changes and filed suit. This past December the DOI won the final court case, allowing it to make the changes.
Now, we have a new governor. Remember the Inaugural Balls held throughout the Commonwealth? Well, corporations were allowed to contribute to the gala events. Commerce Insurance maxed out at a $50,000 donation to the parties. So did Arbella Insurance.
Gov. Patrick appointed an acting Insurance Commissioner this past January to replace the one that was not backing down to Commerce Insurance. One of the very first things the acting insurance commissioner did was suspend the changes made by the past insurance commissioner – the same changes Commerce Insurance disagreed with.
Now, I am not saying the donation had anything to do with policy changes, or that the amount of money spent on lobbyists has anything to do with legislation. You can decide that for yourself.
William Johnson is president of the Statewide Towing Association.
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