December 13, 2006
CONTACT: Nicole St. Peter
(617) 973-8767
Fair Plan Rate Decision Announced

Insurance Commissioner Julianne M. Bowler today issued a decision instructing the Commonwealth Automobile Reinsurers (CAR) to implement an "Assigned Risk Plan" for the private passenger auto insurance market. The Assigned Risk Plan will replace the existing pooling mechanism and establish appropriate incentives for companies to fight fraud.

Commissioner Bowler implemented the transition to an Assigned Risk Plan following the unanimous Supreme Judicial Court decision on August 23, 2006 upholding her authority to do so and after receiving testimony presented during a public hearing held November 10, 2006.

"Reform is long overdue. Massachusetts currently has the highest losses associated with high-risk drivers as compared to every other state," said Bowler. "By implementing the Assigned Risk Plan, insurance companies will no longer be able to disassociate themselves from the policies that they transfer to the residual market. Companies will now be responsible for all their policies, forcing responsible management of losses and a greater incentive to fight fraud in the marketplace, which means lower rates for drivers."

The new Assigned Risk Plan will be phased in over a three-year period so as to minimize disruption to consumers and agents.

  • On April 1, 2007, all new business (i.e., newly licensed drivers or those not previously insured in the Commonwealth in the past year) that insurance carriers decline to write voluntarily.
  • As a consumer protection measure, as of April 1, 2007, carriers will not be permitted to non-renew "Clean-in-Three" business for a three-year period to give the market the opportunity to adjust and CAR the opportunity to design a permanent protection for these good drivers.
  • "Clean-in-Three" risks - estimated at 75 percent of the current market - are those drivers who have not had an accident or moving violation for the three-year period immediately preceding their application for insurance or renewal.
  • On July 1, 2007, drivers with 10 or more points (e.g., someone with two DUIs, six moving violations or three major accidents in the past three years) that insurance carriers decline to write voluntarily.
  • On April 1, 2008, all other business (except those that meet the criteria of "Clean-in-Three" risks) that insurance carriers decline to write voluntarily.

To read the MAIP decision please visit