For Immediate Release - August 23, 2006

Tatarka and Bowler Applaud SJC's Unanimous Assigned Risk Decision

Decision allows auto insurance assigned risk plan to be implemented

Office of Consumer Affairs and Business Regulation Director Janice S. Tatarka and Insurance Commissioner Julianne M. Bowler today praised the unanimous decision of the Supreme Judicial Court confirming the insurance commissioner's authority to implement an auto insurance assigned risk plan in Massachusetts.

The SJC's unanimous decision today reverses a Superior Court decision on June 20, 2005 that stated that the insurance commissioner did not have the statutory authority to promulgate an assigned risk plan.

"Today's SJC decision is welcomed news," said Tatarka. "The implementation of the assigned risk plan is an important first step in bringing the Massachusetts auto insurance industry inline with the rest of country and protecting consumers by spreading the costs and risks in a more equitable way across the industry."

Bowler and the Division of Insurance are currently reviewing the high courts decision and will announce shortly the implementation process of the assigned risk plan into the Commonwealth's auto insurance market. Massachusetts will join the 42 other states in the nation that use the assigned risk model.

"Today's unanimous decision is a victory for the good drivers in Massachusetts," said Bowler. "It is our hope that with this reform that more insurance companies will be encouraged to enter into our auto insurance market and the consumer will win again."

The assigned risk plan overhauls the process in which drivers that are denied coverage in the voluntary market are assigned to carriers depending on the company's share of the market and number of high-risk drivers already assigned. This process spreads out the risk and burden more fairly to the industry and assigns responsibility of oversight to a particular company thus ensuring that appropriate measures at taken to hold down costs and fraudulent practices.

To read the SJC's decision please see http://www.socialaw.com/slip.htm?cid=16429&sid=120