Mass. Agents, Bar Compete with Lawyers Programs

March 18, 2004

Three months after the insurer and the Massachusetts Bar Association (MBA) parted ways, Westport Insurance Corp. has signed on with the state’s agent association to sell its lawyers’ professional liability program.

Wesport, an underwriting division of GE Commercial Insurance, is making its lawyers program available to members of the Massachusetts Association of Insurance Agents (MAIA) to sell to firms with 1 to 250 lawyers through MAIA’s own Number One Insurance Agency.

Westport, rated “A” by A.M. Best, has been in the lawyers professional liability line since 1972 and been insuring law firms in Massachusetts since 1990.

But this past January, the Massachusetts Bar Association (MBA) and its in-house agency dropped Westport after 13 years as the provider for its members, opting to go with CNA instead.

In explaining the switch to CNA, MBA President Terence J. Welsh claimed the switch to CNA had to do with Westport’s changes to its underwriting, pricing and coverage terms. He also acknowledged there were more serious differences. “Specifically, Westport took exception to the MBA’s right to approve proposed rate changes and policy forms and the MBA’s ability to limit any proposed rate increases. Moreover, Westport desired to change the MBA’s right to own and control information about members, including amounts of coverage and renewal dates,” he wrote in a letter to members.

He said MBA negotiated an improved policy form with competitive rates for the program. CNA is rated “A” by A.M. Best and is one of the largest writers of lawyers professional liability in the country.

Frank Mancini, chief executive officer and president of MAIA, said his organization responded to the opportunity when Westport approached with its proposal. He said it was a chance to provide members with another option from a proven carrier in what is a “limited” market. “It might allow some agents to round out the coverages for some clients,” he added.

Welsh said that eight carriers have withdrawn from the state’s lawyers professional liability market, including some that have gone bankrupt entirely. Others have severely restricted their underwriting and in many cases have increased prices 25%.

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