Robert E.Keeton, professor of Law, testified yesterday before the Joint Committee on Insurance of the Massachusetts Senate and House of Representatives on his proposed plan to revolutionize the concept of automobile insurance.

Formulated by Keeton and University of Illinois Law School professor Jeffrey O'Connell, the "Basic Protection Plan" would have insurance companies reimburse their own policy-holders for losses in a traffic accident without regard to negligence or blame.

Under the present law, two drivers involved in an auto accident must press claims for damages against each other's insurance companies, rather than their own. To collect any money, each party must prove in court the other's negligence and his own lack of negligence.

Hostile Companies

Keeton testified yesterday that his plan would eliminate the need for lengthy litigations over how the accident happened and would expedite funds to the victims by dealing with their own, less hostile insurance companies. In the past two days, the Committee has held hearings on 38 bills now pending in the House and Senate proposing reforms in the state's insurance law.

Keeping most accident cases out of litigation, Keeton said, would eliminate the tremendous court costs that now often result in a victim's receiving less than half of a court's original award.

Another feature of the Keeton-O'Connell plan requires insurance companies to pay only the balance of a victim's economic losses such as time off the job and doctor bills not already paid for by such outside sources as Workmen's Compensation and Blue Cross.

Poor Students

A person with coverage from outside sources, O'Connell testified, would thus be rewarded with reduced premiums, as his economic losses would not have to be paid totally by the insurance company. Similarly, a student earning no wages has small potential economic loss and would pay lower premiums.

Premiums varying on these criteria are impossible under the existing law because insurance companies know nothing about the people who may sue them for accident benefits in the future