"Given the size and scope of the auto insurance market and its broad impact on society, its regulation is often politicized?and extensive automobile rate regulation is most often motivated by the political desire to minimize insurance rates," he said.

Mr. Ahart said an April 2001 report on personal lines rate regulation was prepared by the American Enterprise Institute and the Brookings Institution Joint Center for Regulatory Studies. The study, he said, found state regulation of auto insurance does not decrease prices for consumers, but instead reduces coverage availability and increases price volatility.

The study said rate regulation often results in rate suppression where the total amount of premiums collected is less than would be collected in an efficient and competitive market, IIABA said. The association asserted that in New Jersey and Massachusetts, auto insurers have left the markets because approved rates are inadequate.

Mr. Ahart said that insurers are left with no option but to leave the markets when they can not get adequate pricing. This has inadvertently hurt consumers, he said. He cited South Carolina and Illinois as two states where positive reforms have led to a turnaround and could be used as models for other states.

The IIABA leader also addressed the use of credit scoring. He said the controversy arose where some companies used credit data rigidly and exclusively in their underwriting and pricing of insurance policies. This has created suspicion among consumers.

While the association does oppose efforts to see a total ban on their use, Mr. Ahart said the industry should moderate its use of credit scoring so it ensures it is used in a "reasonable and consumer-friendly way."