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Statement on Recent Auto Insurance Study by the Consumer Federation of America

Mila Kofman, Superintendent of Insurance


Maine’s auto market is one of the best in the United States according to a study recently conducted by the Consumer Federation of America (CFA) -- an independent research and consumer advocacy organization. The national study examined the past two decades of auto insurance regulation in the 50 states and District of Columbia, analyzing how successful the different regulatory approaches have been in holding down prices and encouraging competition.

Maine ranked well in all categories. Importantly, our State was the only one in New England with the distinction of being among the ten states with the lowest average costs for consumers. Ranked in descending order from highest to lowest cost, Maine came in at 42nd in 2005. Massachusetts was 4th highest, Rhode Island 7th, Connecticut 9th, New Hampshire 22nd and Vermont 32nd. Maine improved its standing from 32nd in 1989.

The competitive scaling analysis used in the CFA study determined Maine to have a competitive market, with a Herfindahl-Hirshman Index (HHI) of 603. Any score under 1000 is considered competitive. A state with a score between 1000 and 1800 is considered to have a moderately concentrated market. A score over 1800 is highly concentrated. The higher the index, the closer the market is to being a monopoly.

The study promoted “prior approval” regulation as the most beneficial for consumers. In states utilizing a regulatory process of this kind, regulators are required to review rates before the insurance companies can implement rates. Maine’s approach of “file and use,” however, has proved to be effective at protecting consumers and ensuring that companies can take their products to market quickly.

Maine, along with 22 other states, regulates auto insurance on a “file and use” basis. Filings must be made 30 days prior to their effective date. If the Bureau of Insurance takes no action on the filing within 30 days, the law allows an insurer to deem the filing approved and to begin using it. Here in Maine, our staff approves or disapproves most filings after a complete review within 30 days of their receipt. By allocating resources to review filings, the Bureau protects Maine’s consumers similarly to states utilizing the prior approval process.

With one of the best markets for consumers – low prices and lots of options among insurers – companies operating in Maine are also profitable, demonstrating that the regulatory environment works well for consumers and the regulated community alike.

For more information about auto insurance in Maine, please contact the Bureau or download our “Consumer’s Guide to Personal Auto Insurance” at Bureau staff members are always available to provide information, answer questions and review issues of concern regarding all types of insurance. Don’t hesitate to contact us if assistance is needed.

The Bureau of Insurance is part of the Department of Professional and Financial Regulation which encourages sound ethical business practices through impartial and efficient regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine. Consumers can reach the Bureau through its web site at; by calling 800-300-5000 in state; or by writing to Bureau of Insurance, 34 State House Station, Augusta ME 04333.



Last Updated: January 10, 2014