Mass. Insurance Commissioner Burnes Resigns to Teach at Alma Mater

Massachusetts Insurance Commissioner Nonnie Burnes is leaving her post to become a senior fellow at Northeastern University in Boston, her office has confirmed.

Burnes received her juris doctor from Northeastern's School of Law in 1978 and will "develop and teach an interdisciplinary course on regulatory reform," beginning Oct. 1, according to the school.

Division of Insurance spokesman Jason Lefferts said Burnes' last day will be Sept. 18. First Deputy Commissioner Joseph Murphy will take her place.

Burnes has been insurance commissioner since February 2007 and might best be remembered for her move to get Massachusetts away from an automobile insurance system in which rates were set by the state. April 1 marked the one-year anniversary of the roll-out of the Bay State's new "managed competition" auto rate system. For the previous 30 years, rates had been determined by the state ? a factor that drove 35 insurers away from Massachusetts since 1990 to leave just 19 left. Since the new rate system was announced, about 10 new companies have entered the market.

Among the newcomers are Liberty Mutual's Peerless Insurance, Progressive, Vermont Mutual, American International Group Inc.'s Private Client Group and Geico. According to a study commissioner by the department, consumers saved more than $270 million in insurance premiums in the first year of managed competition and average premiums per vehicle dropped 8.2%.

"Rather than bowing to presumptions and doomsaying about the feasibility of moving to competitive rating, she resolved to take a fresh look at the matter," said Paul Tetrault, Northeast state affairs manager for the National Association of Mutual Insurance Companies. "As a result of this decision, drivers across the state are now experiencing the benefits of competition, including more choices and lower rates for good drivers. It is to be hoped that her successor not only continues but expands upon this success."

In a statement Gov. Deval Patrick said Burnes, a justice of the state Superior Court from 1996 until her appointment as commissioner, "brought fresh insight and real courage to one of the central successes of this administration -- the introduction of balanced, consumer-oriented competition to our auto insurance market.

"Thanks to her steady leadership, good drivers everywhere in the Commonwealth have lower rates and more choices, and many new companies have entered the state. I commend Commissioner Burnes on a job well done and wish her success in her new endeavor," he added.

Not everyone was thrilled with Burnes' managed competition system. About a year ago, Arbella Insurance Group and the Massachusetts Association of Insurance Agents filed a complaint against Burnes, alleging the new rules she instituted to encourage competition are unfair because new insurers to the market do not have to participate in the residual market for two years (BestWire, June 2, 2008).

Burnes also tried to eradicate the state's unique 15-member Auto Insurance Appeals Board, saying it was costly, time-consuming and inefficient (BestWire, Jan. 13, 2009). The commissioner chose not to go through with the decision after a bill was introduced to overturn it.

Burnes joins a group of commissioners who have stepped down of late. Most recently Washington, D.C. commissioner Thomas E. Hampton was abruptly replaced by his deputy commissioner (BestWire, Aug. 31, 2009). Steven M. Goldman, commissioner in New Jersey, stepped down in order to join a New York City law practice (BestWire, July 1, 2009) and former New York commissioner Eric Dinallo resigned to become a professor at New York University. Since then, Dinallo has also filed paperwork to run for state Attorney General but has not announced he will run (BestWire, Aug. 24, 2009).

The top five writers of private passenger auto insurance in Massachusetts last year, according to A.M. Best Co. state/line data, were: Commerce Group, with a 31% market share; Safety Group, with 11.1%; Arbella Insurance Group, with 9.3%; Liberty Mutual Insurance Co., with 8.5%; and MetLife Auto & Home Group, with 6.5%.