PCI Urges Court to Uphold Mass. High Risk Pool Reforms for Auto Insurance

April 19, 2005

The Property Casualty Insurers Association of America (PCI) joined with a group of insurers and insurance trade associations in filing a friend of the court brief on April 15 urging the Massachusetts Superior Court to uphold Insurance Commissioner Julianne Bowler’s rules reforming the auto insurance high risk pool.

After months of hearings and deliberations in 2004, Commissioner Bowler on Dec. 31, 2004 issued final rules changing the Massachusetts auto insurance high risk pool from one in which high risk agents are assigned to insurance companies to one in which individual high risk drivers are assigned to insurers. The transition to this type of high risk driver pooling arrangement, which is common in most states, was to take place over a three-year period.

In February 2005, a Superior Court judge issued an order staying the effectiveness of the new rules in a suit filed by Commerce Insurance Company and others.

“These rule changes are essential to making the high risk pool operate in a fair and equitable manner and in compliance with Massachusetts law,” said Frank O’Brien, regional vice president of PCI. “Both Attorney General Reilly and Commissioner Bowler have demonstrated conclusively that the operations of the high risk pool do not comply with the law and have been responsible for driving numerous companies out of the state, out of business or into insolvency. The Massachusetts auto insurance market is on the verge of a meltdown, and Commissioner Bowler’s rules are a necessary first step in restoring stability to the market and in attracting new companies with needed additional capital to the insurance business here.”

PCI joined with the Massachusetts Insurance Federation, the Massachusetts Association of Insurance Agents, the American Insurance Association, the Independent Property-Casualty Insurers of Massachusetts, Safety Insurance Company, United Services Automobile Association, Metropolitan Property & Casualty Insurance Company, The Hanover Insurance Company, Liberty Mutual Insurance Company, Encompass Insurance Company, Amica Mutual Insurance Company, Norfolk & Dedham Mutual Fire Insurance Company, National Grange Mutual Insurance Company, and Quincy Mutual Fire Insurance Company in filing the friend of the court brief.

Together, the insurance companies participating in the brief write approximately 55 percent of the private passenger auto insurance business in Massachusetts.

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