AG Coakley Requests Hearing Regarding Auto Insurance Company's Excessive Rate Filings
BOSTON - Attorney General Martha Coakley's Office has submitted requests to the Division of Insurance (DOI) to hold a hearing on the proposed automobile insurance rate increase for Occidental Fire and Casualty Insurance Company of North Carolina (Occidental). Occidental recently submitted two rate filings, one to raise rates by 10.3%, the other to tack on a $25 "policy fee" to every policy sold. In her requests, the Attorney General stated that the rate requests were unsupported, unjustified and unfair for consumers. The Attorney General's Office filed the first request for a hearing last week and the second request late yesterday.
"We are concerned that Occidental has chosen to raise its rates to such a significant degree. These new prices may harm consumers, especially those consumers who feel they have no other options in this market," said Attorney General Coakley. "This rate increase also highlights the need for insurance companies to fully justify rate increases in their filings."
Occidental entered the Massachusetts insurance market on April 1, 2009, and their initial filing targeted areas such as the inner cities, where other insurers are cancelling insurance contracts. At that time, the Attorney General's Office successfully challenged the rates before the Division of Insurance and Occidental agreed to reduce its premium.
Occidental also entered into an agreement with the Attorney General in March 2009 that forbade Occidental from engaging in certain practices that the company listed in its rules filing. These included charging installment fees in excess of Massachusetts usury standards, charging a 25% surcharge on high risk drivers, and charging installment fees to those policyholders who had already paid their balance in full. Occidental currently has an estimated 15,000 policyholders in Massachusetts.
This matter is being handled by Assistant Attorneys General Monica Brookman and Peter Leight and Mathematician Bert Feinberg and Paralegal Martin Sattell of Attorney General Coakley's Insurance and Financial Services Division.