State auto insurer pulls rate cut proposal

November 20, 2008

Maryland's auto insurer of last resort withdrew a proposal to reduce its rates this week, saying volatility in the market cut its surplus by more than $25 million in September and October. The Maryland Automobile Insurance Fund, a state-controlled fund that covers drivers who have been rejected by private-sector companies, had filed to reduce its rates by an average of about $120 per policy in order to make insurance more affordable during a period of rising gasoline and food prices. The average MAIF policy is about $2,400 a year. The agency's surplus was less than $145 million at the end of October; officials said they hoped to revisit the rate-slashing proposal within six months.

Laura Smitherman