Met P&C Will Reimburse Drivers Over Alleged Auto Insurance Overcharges
Insurance Company Allegedly Failed to Pay Refunds; AG’s Office Investigating Other Insurance Companies to Determine Whether They Have Engaged in Similar Practices
BOSTON – Metropolitan Property & Casualty Insurance Company (Met P&C) has settled allegations that it failed to refund surcharge premiums to automobile insurance policyholders after those surcharges were eliminated by the Commonwealth’s Board of Appeal, or otherwise removed from consumers’ driving records, Attorney General Martha Coakley announced today. The agreement will mandate an audit to determine the amount of restitution owed to consumers and will block these alleged overcharges from happening in the future.
“This is another example of an auto insurance rating problem that our office discovered as a result of a consumer complaint,” AG Coakley said. “While we are troubled that these overcharges occurred, we are pleased that we were able to stop this unlawful practice and protect consumers.”
The Commonwealth’s Board of Appeal is an independent board that reviews the fairness of at-fault accident determinations made by insurance companies for surcharge purposes. Once a surcharge is vacated by the Board of Appeal, insurance companies are required by law to refund the surcharge premium to the policyholder.
The AG’s Office began its investigation of Met P&C’s surcharge practices after receiving a complaint from a Massachusetts consumer whose surcharge had been vacated by the Board of Appeal in 2010. The investigation revealed that Met P&C had reportedly failed to refund the consumer more than $700 in surcharge premiums. Met P&C cooperated with the Attorney General’s investigation.
Under the terms of the assurance of discontinuance filed in Suffolk Superior Court last week, Met P&C will engage in a supervised audit of the relevant insurance policies to determine refund amounts, provide restitution to consumers plus 6% interest, and pay the Commonwealth $50,000 plus additional amounts depending on the results of the audit. Not all policyholders who had their surcharges vacated by the Board of Appeal are expected to be affected.
The AG’s Office is now investigating other insurance companies that write auto insurance in Massachusetts to determine whether they have engaged in similar practices. Consumers who believe that they paid surcharge premium to a carrier that was not refunded after their surcharge was vacated by the Board of Appeal should call the Attorney General’s Insurance & Financial Services Division at 1-888-830-6277.
The Attorney General’s Office is investigating this matter with the assistance of the Merit Rating Board. This case is being handled by Investigations Supervisor Arwen Thoman, Mathematician Burt Feinberg, Legal Analyst Emily Garvey, and Assistant Attorney General Glenn Kaplan, Chief of Attorney General Coakley’s Insurance & Financial Services Division.