In April 2008, the state government put a managed competition system in place through the Division of Insurance. After some time, the system still continues to receive mixed reviews.

Before the system, state government set the rates for auto insurance effectively regulating insurance providers’ ability to raise rates to gain more revenue. When the plan was first introduced, advocates believed the new system would bring in new carriers and those that opposed said the system would discriminate against select drivers.

The system is now in its second year but there have only been minor changes in the nature of the auto insurance market.

Three major auto insurance providers Allstate, Geico, and Progressive, have entered the market. 6 more small local providers have also joined since the market change. The difference between the larger and smaller providers is that the smaller ones have employed the services of local insurance agents.

It is a concern that with large providers not seeking help from local agents, agents will suffer. Frank Mancini, president and CEO of the Massachusetts Association of Insurance Agents, says that even with some consumers switching to the bigger providers, agents have yet to suffer substantial losses. Independent agents handle up to 78 percent of auto insurance policies in the state. The national figures are much lower, 30 to 35 percent.

The statistics from the first year of operation under the new system show that the average auto insurance cost dropped. With the new system being a hot topic for debate, critics and advocates will surely being watching the market closely.