|December 13, 2006|
CONTACT: Nicole St. Peter
|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.
To read the MAIP decision please visit www.mass.gov/doi.