Commissioner Seeks Changes to Mass. ARP Plan

August 27, 2004

Massachusetts Insurance Commissioner Julianne Bowler has ordered Commonwealth Auto Reinsurers (CAR) to make some changes to its proposed assigned auto insurance plan before she will approve it.

While commending the proposed Massachusetts Assigned Insurance Plan (MAIP) as a “solid framework for residual market reform and transition,” Bowler nevertheless asked for key amendments to address concerns raised during the hearing process.

Bowler has asked CAR to:

• Clarify the rules so that drivers with good driving records are not impacted by the changes in the residual market.
• Adopt the so-called “Clean in Three” proposal, under which experienced drivers with no-fault accidents or moving violations in the most recent three years cannot be placed in the assigned risk plan.
• Introduce incentives that will encourage insurers to create new agencies in urban areas.

She also asked for tougher anti-fraud incentives and steps to reduce consumer confusion during any transition from CAR to the MAIP.

Bowler asked CAR to submit amendments by Sept. 24 and scheduled a hearing on the changes for Oct. 4.

Insurance Journal will report on reaction to Bowler’s decision as soon as it is available.

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