Byline: Bob Kievra

The following correction was published Nov. 17, 2007:

Ohio-based Progressive Group of Insurance Cos. does not write private passenger auto insurance in Massachusetts but has offered commercial auto insurance here since January. A description of the company's

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After a 20-year absence, an insurer is returning to Massachusetts after state regulators scrapped the former system of how automobile policies are bought and sold.

Boston-based Liberty Mutual Group said yesterday its Keene, N.H.,-based Peerless Insurance unit will resume selling private passenger automobile insurance policies in Massachusetts next spring.

Peerless, with $1.01 billion in direct written premiums, left the Massachusetts market in 1988, unhappy with the way losses were allocated for the state's high-risk drivers. It re-entered the Massachusetts commercial automobile market in 2001 and currently has $70 million in direct written premiums.

Peerless, unlike Liberty Mutual, sells its products through independent agents and brokers in the six New England states and in New York and New Jersey.

Peerless is the first insurer to announce plans to return to the private passenger auto sector since Insurance Commissioner Nonnie S. Burnes authored regulations to open the market to competitive rates and differing products. For the previous 30 years, state regulators had limited what products could be sold and set a single price insurers could charge the state's 4 million drivers.

The state currently has 19 companies selling auto insurance and regulators hope filings due Monday will show that managed competition will result in lower rates.

"All signs point to the fact that the consumer benefits inherent to the new system are real and working," Ms. Burnes said in a statement.

Peerless, which said it would also offer homeowners insurance, will file rates after Feb. 15 and should begin selling policies after April 1.

Ohio-based Progressive Group of Insurance Cos., which does not operate in Massachusetts, (SEE CORRECTION) said yesterday it had nothing new to say about whether it would enter the Massachusetts market.

"We're just continuing to study it,'' said spokeswoman Cristy Cote.

Michael Christiansen, president of Peerless, said the company hopes to write $10 million in premiums in the first year using the company's existing roster of 150 independent agents in Massachusetts.