Auto insurance overhaul threatens inner city agents

(NECN: Peter Howe, Boston) - Massachusetts is now 16 months into a sweeping overhaul of automobile insurance called "managed competition," aiming to use more market competition -- and less state regulation -- to set and ultimately lower car insurance rates.

But as it produces winners and losers, it's also producing some political controversies for Massachusetts Governor Deval L. Patrick. Those include an increasingly intense outcry from a group of several dozen inner city, mostly minority, insurance agents who say their companies -- and 230 jobs across the state -- are threatened to be driven out of business by the changes.

Against very long odds, beginning in the late 1970s Roussel Theodat built, and his daughter Marie-Armel helped and then took over, a successful little business, Theodat Insurance Agency in Boston's often-struggling Codman Square section in Dorchester.

Now Marie's in a fight for the company's life, and her three employees' jobs.

"Every day it's a challenge. Like a lot of the agents like to say, we're hemorrhaging right now, and every day it's just one day closer to closing our doors.'' She says her challenge isn't just the economy, it's Patrick's auto insurance policies. Patrick's insurance commissioner, Nonnie S. Burnes, has begun phasing out an old system meant to prevent inner-city drivers from being unfairly denied car insurance. The change means getting rid of a type of agent called "exclusive representative providers,''

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