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Insurers, agents clash over rebates and electronic notices at financial services hearing
Summary
Trade groups and insurance agents gave opposing testimony on House Bill 1233 (insurer rebates for risk mitigation) and a separate proposal to allow electronic cancellation notices; insurers argued rebates can fund tested mitigation products while some agents warned about undue inducements and consumer risk.
The Joint Committee on Financial Services heard opposing views on House Bill 1233 (insurance company rebates for risk‑mitigation devices) and on companion bills that would permit certain insurer communications electronically rather than by mailed hard copy.
Nick Contralakis of the Massachusetts Association of Insurance Agents told the committee he opposed HB1233 because inducements should remain inside the policy and unlimited loss‑mitigation allowances could let larger firms outspend smaller competitors. "Insurance should be bought... based on what's in the policy, the value of the policy," he said, urging the committee to report the bill unfavorably. He also urged keeping mailed hard‑copy cancellation notices in place, warning that electronic notices could be missed in spam filters and leave consumers unaware of cancellations.
Industry trade witnesses took a different view. Christopher Stark, executive director of the Massachusetts Insurance Federation, and colleagues told the committee that HB1233 would let insurers test and deploy proven risk‑mitigation devices — for example, water‑shutoff gauges and leak sensors — more rapidly if they could be offered outside the policy. "Allowing risk mitigation to be outside the policy will allow us to actually test some of these products to understand the level of risk mitigation," Stark said. On electronic communications, industry witnesses said any electronic delivery would be opt‑in and preserve mailed notices for consumers who prefer them.
The committee did not record a formal vote on either bill during the hearing; witnesses on both sides urged the committee to weigh consumer protection, market competition and innovation.
