For Immediate Release - December 31, 2004

Insurance Commissioner Bowler Finalizes Auto Insurance Reform Of High-Risk Market

Following a December 17 th regulatory hearing, Massachusetts Insurance Commissioner Julianne Bowler today issued clarifications and minor revisions to her decision of November 23, 2004, approving rules for Commonwealth Automobile Reinsurers' ("CAR") three-year transition to the newly created Massachusetts Automobile Insurance Plan ("MAIP").

In accordance with the November 23 rd Order, the transition under revised and new CAR rules will begin on January 1, 2005 and result in full implementation of the MAIP as of January 1, 2008. The resulting assigned insurance plan will place higher risk drivers with insurers in proportion to their voluntary market share, ending the assignment of involuntary agents' policyholders to insurers through a complicated subscription formula and bringing equitable distribution of these risks among insurers.

"In keeping with Governor Romney's goal of restructuring this troubled market, I have acted within my regulatory authority and presided over an open and constructive six month process to achieve necessary consumer protections and fairness to all insurers who will offer coverage in Massachusetts going forward," said Commissioner Bowler.

Clarifications and revisions made by Commissioner Bowler based on testimony presented at the December 17 th public hearing are addressed in the Order, which is available online at www.state.ma.us/doi under "What's New". Also available is the Commissioner's November 23 rd Order and accompanying press release of that date.