TO: Commonwealth Automobile Reinsurers
FROM: Nonnie S. Burnes, Commissioner of Insurance
DATE: October 19, 2007
RE: Regulatory Review Standards Applicable to Private Passenger Motor Vehicle Insurance Rate Filings in the Residual Market for Rates Effective April 1, 2008 through March 31, 2009

In furtherance of my commitment to manage competition in our private passenger motor vehicle insurance market, I am establishing certain parameters with regard to the transition rate filing for the residual market that the Commonwealth Automobile Reinsurers ("CAR") must make by October 24, 2007, for the period April 1, 2008 through March 31, 2009. I remain steadfast in my resolve to maintain a small residual market, to keep the number of uninsured drivers to a minimum and to ensure that the rates in the residual market are neither excessive nor unfairly discriminatory. The goal of this Bulletin is to meet all of these fundamentals.

I will find a CAR transition rate filing to be unfair, unreasonable and violative of public policy if it requests an increase for any of the coverages listed in Exhibit 1 to any vehicle premium that is greater than 10% of the premium that would have applied to the same vehicle based on the private passenger motor vehicle insurance rates effective for the period April 1, 2007 through March 31, 2008.