The average auto insurance premium in Massachusetts fell 12.7 percent between 2007 and 2009, far outpacing the national decline of 1.4 pecent, according to a report issued by the National Association of Insurance Commissioners.

Patrick administration officials said the $131 decrease in the Massachusetts average premium (from $1,057 to $923) was the largest in the nation and due largely to the decision to deregulate the state’s auto insurance business, a move that attracted more carriers to the state and gave them the flexibility to set their own rates. So-called managed competition was launched in April 2008, about halfway through the three-year period.

“Managed competition helped Massachusetts drivers see premiums drop at a higher rate than the rest of the country, a benefit we expected to be part of this reform,” Joseph Murphy, the state’s insurance commissioner, said in a statement.

Attorney General Martha Coakley, who has been critical of several aspects of managed competition, could not be reached for comment. In late 2009, however, she issued a report suggesting managed competition was a dud. The report said premiums were dropping far less than they would have had the state continued to set rates itself and also said that one-fifth of Massachusetts drivers, mostly minority and low-income residents, were paying higher premiums. She vowed to issue regulations to address the deficiencies in managed competition, but in May last year she decided to abandon the idea.