Mass. gets a new auto insurer: N.H.-based Peerless to begin selling in state after 20-year absence

Jon Chesto

The first auto insurer to join the Massachusetts auto insurance market under the state insurance commissioner’s new managed competition system isn’t a complete stranger around here.

Keene, N.H.-based Peerless Insurance said it notified the state Division of Insurance on Wednesday that it plans to sell auto insurance to consumers in Massachusetts next year for the first time in 20 years.

It remains unclear, however, whether Peerless’ rates will differ significantly from those that Boston-based Liberty Mutual Group, Peerless’ parent company, will offer under its Liberty Mutual brand name.

State Insurance Commissioner Nonnie Burnes is moving away from a previous system in which the commissioner established a uniform set of rates for all insurers. Under the new system, each insurer would prepare a set of rates and submit them to Burnes for her approval.

Burnes’ agency has said that all insurers within an ‘‘insurance company group’’ must offer the same set of rates.

An agency spokeswoman declined to comment when asked whether Liberty Mutual would be allowed to offer different rates for its Liberty Mutual brand and its Peerless brand.

The agency spokeswoman said this is the first time that a new auto insurer has joined the Massachusetts market since 1977.

Glenn Greenberg, a spokesman for both Peerless and Liberty Mutual, said Peerless plans to file a separate set of rates in February, with the goal of offering auto and home insurance to consumers in the state by next July.

Greenberg said Liberty Mutual will make the case that Peerless and Liberty Mutual should be treated as separate companies in the rate-setting process. He said the two insurers compete with each other in all the other Northeast markets where they do business.

‘‘(Peerless) happens to be part of the Liberty Mutual Group, but it operates independently in the marketplace and it competes independently in the marketplace,’’ Greenberg said. ‘‘Peerless products are different from Liberty Mutual products in every state in which they operate.’’

Even if Burnes does not allow Peerless and Liberty Mutual to offer competing rate structures, there still will be an important distinction between the two. Liberty Mutual sells its Liberty Mutual-brand insurance directly to consumers, while Peerless is sold through an agency network.

Greenberg said agents in about 150 locations in Massachusetts currently sell Peerless insurance to business clients for commercial insurance lines such as workers’ compensation policies and commercial property insurance. Peerless wrote about $70 million in commercial insurance premiums in the state last year.

Peerless sells commercial insurance in the six New England states as well as New York and New Jersey. Peerless sells personal insurance in all those states except Massachusetts, but that will change next year when Peerless joins the roughly 20 other companies that offer auto insurance in the state.

‘‘This is a good thing for Massachusetts consumers,’’ Greenberg said. ‘‘It’s a testament to the changing marketplace here in Massachusetts.’’

Liberty Mutual, the fourth largest auto insurer in the state based on market share, has been among the companies that vigorously pushed state officials to reduce the regulatory restrictions on insurers here.

Burnes issued a statement praising the return of Peerless, calling it ‘‘further evidence that managed competition will be beneficial for consumers.’’

Most major insurers doing business in the state will file their proposed rates under Burnes’ new system by the end of the day on Monday.

The changes will loosen the strict regulations that Burnes and many in the insurance industry say had been chasing away many major insurers. Some consumer advocates and lawmakers are concerned, however, that many motorists with good driving records will be shortchanged under a less-regulated system.

Deirdre Cummings, a consumer program director with the Massachusetts Public Interest Research Group, said until more information is available about next year’s rate proposals, it’s too soon to know whether the move toward competition under Burnes’ plan will pay off for most consumers.

‘‘We have lost a significant amount of consumer protections in this tradeoff for a competitive market,’’ Cummings said. ‘‘We’re concerned that isn’t going to be a fair trade. ... We’ve predicted, in the long run, that this is going to harm consumers.’’

Jon Chesto may be reached at jchesto@ledger.com.