Nonnie Burnes

Established insurers and agents were already angry that Progressive Car Insurance – seen as the pampered new child of Massachusetts’ market – would spend its first few years in the state without having to join the program that covers the state’s riskiest, most expensive drivers.

But now that angst has jumped up a notch. Progressive and the Division of Insurance have apparently said the newcomer also doesn’t have to contribute money to the pool that covers the deficit from that program.

That matter is still in contention: The governing board of Commonwealth Auto Reinsurers, the group that organizes the state’s residual market, has sent a letter to Insurance Commissioner Nonnie Burnes, stating that Progressive does have to pay up.

According to CAR, the commissioner and Progressive have said the commissioner’s rulings last spring – the rules exempting Progressive from taking on risky drivers in the first place – also state Progressive won’t have to take part in profits and losses incurred by the CAR program.

CAR begs to differ, saying the commissioner didn’t specifically exclude Progressive from paying into the pool. This new development has heaped more fuel on the discontent stewing among Massachusetts’ property insurers.

“The initial rule caused great consternation in insurers in this marketplace, and that consternation continues and is being aggravated,” said Jim Harrington, executive director of the Massachusetts Insurance Federation, which represents Massachusetts insurers.

Progressive is also a member of the federation, but Harrington said his other constituents have voiced their frustration over the situation.

Massachusetts has long had a pool for risky drivers that each insurance company pays into based on their market share. A company that has 10 percent of the overall market, for example, pays 10 percent of the pool’s costs.

Francis Mancini of the Massachusetts Association of Insurance Agents, said that payout isn’t exactly chump change, either: The costs of that pool force insurers to add, in some cases, more than a hundred dollars to every policy they sell. It makes insurers that much less competitive compared to Progressive, which gets a so-called “free ride.”

The state is currently transitioning out of the pooling system, but the pool still handles the bulk of high-risk drivers, said Ralph Iannaco, president of CAR.

The conflict came to light when CAR contacted Progressive to gather information to determine what each company owes for the pool, Iannaco said. Progressive’s staff contact informed CAR the insurer didn’t have to pay.

“We were not aware of that,” he said.

Burnes’ statement to the press about the current questions didn’t directly address the issue of the pool, but reiterated that the state now assigns risky drivers to insurers based on their market share from two years ago – Progressive had zero market share two years ago, and therefore won’t have to participate yet.

Mancini and CAR’s governing board insist that if the commissioner wants to exempt Progressive from paying in, she needs to explicitly say so.

And Mancini speculates that Burnes doesn’t want to make such a move because it would spark more public debate about the matter.

“That would bring more light to this whole thing,” he said. “It would require the commissioner to explain why she wants to give the new entrants what we think is another unfair advantage.”

The commissioner has the authority to change the CAR rules, Mancini said, but it would require her to officially make the changes and draw forth public debate about the matter.

“That would bring more light to this whole thing,” he said. “It would require the commissioner to explain why she wants to give the new entrants what we think is another unfair advantage.”