Mayor Kurt L. Schmoke has decided that Baltimore should fund an actuarial and marketing study that could lay the groundwork for a non-profit automobile insurance company intended to offer lower premiums to good city drivers.
The mayor previously had said he would not commit city money to the effort. He reversed himself this week after meeting with members of the City-Wide Insurance Coalition, who provided new details about the purpose of the study.
Coalition members said they would use its results not just to assess the possibility of starting a non-profit company to write insurance for city drivers -- an idea Mr. Schmoke regards as not feasible -- but also to explore another option as well.
Under the second scenario, the coalition would create an agency that would act as a "third-party administrator" for automobile insurance policies.
The idea is for community groups to serve almost as insurance brokers by gathering names of potential policyholders citywide. The policies then would be grouped by the "third-party administrator" and bid out in a block to existing insurance companies.
The agency also could do some administrative work normally handled by insurance companies, possibly lowering costs even further.
Mr. Schmoke finds this second concept more realistic than setting up a non-profit company. He said yesterday he hopes it would lead to lower premiums.
"This is a very different concept than was discussed initially," he said. "I'm now willing to assist the study."
The insurance coalition, whose membership includes 158 community groups, estimates that the actuarial study -- which would examine potential risks posed by city drivers -- would cost as much as $150,000. Mr. Schmoke said the city would cover "the lion's share" of the cost.
The mayor's decision heartened supporters of the insurance coalition.
City Councilman Melvin L. Stukes, D-6th, who supports the coalition, says the study could buttress city efforts to get the state legislature to outlaw territorial rating, in which automobile insurance rates are based largely on where a driver lives rather than on the driving record.
Ultimately, Mr. Stukes says, the study could lay the groundwork for the eventual formation of a non-profit company that would actually insure city drivers.