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Report: Massachusetts Auto Insurers Subsidized And Calling The Shots

A recent investigation has found that Massachusetts not only spends millions to subsidize private auto insurers, but also suspends drivers’ licenses at their request.

According to WHAV News, employees of the taxpayer-funded Massachusetts Registry of Motor Vehicles (RMV) “process paperwork and otherwise subsidize private insurance companies (office space, telephones, computers, etc.) in the administration of ‘Driver Retraining Programs’ even when there is no state interest—criminal or civil—at stake.”

Under Massachusetts law, companies may designate policies as “Safe Driver Insurance Plans,” which allow for  premium increases for drivers who have accumulated three of more unsafe driver points in five years.

Points can be accumulated for infractions such as “an expired inspection sticker, traffic tickets, or minor fender benders for which there is no state penalty,” and can only be erased by attending a Driver Retraining Program.

However, even though the state covers the operational costs of those programs, tuition fees are pocketed by members of the National Safety Council, which WHAV describes as “a private, nonprofit organization largely backed by wealthy corporations.”

In one case, “a district court magistrate found ‘no probable cause’ in an automobile accident case,” but the Massachusetts RMV “still required a driver-retraining course or would suspend the individual’s driver’s license.”

“We take our orders from the insurance company, not the courts,” a state worker told WHAV. (RELATED: Auto Bill Draft Would Require Black Boxes, Allow NHTSA to Issue Quick Recalls)

In 2009, Massachusetts Attorney General Martha Coakley assessed auto insurers in the state, and found that both consumer prices and corporate profits were rising relative to other states, as well as that, “Company prices and rating behavior have become less transparent … [and] consumer protections have weakened.”

Despite that report, WHAV says, “The corporate welfare practice, seemingly prohibited under both the Federal and state constitutions, has otherwise gone unchallenged.” (RELATED: Romney Once Gave Cars to Welfare Recipients, Called for State Waivers)

Some, however, see the point system as a useful tool for law enforcement. A Patriot-Ledger editorial cited the case of Haley Cremer, who was killed on Father’s Day after being struck by a vehicle driven by a man with a suspended license due to “10 surchargeable accidents, four of which were in the last 5 years,” as well as nine speeding citations.

Haley’s father, Marc, then asked the state to pass a law requiring the Department of Motor Vehicles to notify local police when a resident has a suspended or revoked driver’s license.

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