|Hearing Scheduled for November 10, 2006|
Pursuant to the provisions of the Plan of Operation of the Commonwealth Automobile Reinsurers ("CAR"), adopted in accordance with Massachusetts General Laws Chapter 175, section 113H, a hearing will be held on November 10, 2006, at 10:00 a.m. at the Division of Insurance, One South Station, Boston, in Docket No. C2004-02, in which the Commissioner of Insurance ("Commissioner") filed on December 31, 2004, a Decision and Order on Changes to Rules of Operation 2, 9 through 14, and 17 and Rules 21 through 40 (" 2004 Decision and Order"), which amended certain Rules of Operation of the Commonwealth Automobile Reinsurers ("CAR") and promulgated an assigned risk plan called the Massachusetts Automobile Insurance Plan ("MAIP").
On August 23, 2006, the Supreme Judicial Court unanimously affirmed the authority of the Commissioner to promulgate an assigned risk plan for the residual market of private passenger motor vehicle insurance. Commerce Insurance Company, et al. v. Commissioner of Insurance, 447 Mass. 478 (2006). In addition, the Supreme Judicial Court found no merit in any of the specific issues raised by the appeals from the 2004 Decision and Order pertaining to CAR Rules 2, 9-14 and 17 (the "Transition Rules") or regarding the assigned risk plan promulgated by the Commissioner, with the sole exception of the "clean in three" provision. The Court thereby reversed a Superior Court order that had suspended implementation of the Transition Rules and promulgation of the assigned risk plan.
Although the Supreme Judicial Court ratified the Commissioner's authority to promulgate the assigned risk plan called the MAIP and affirmed her proposed changes in the 2004 Decision and Order to the CAR Transition Rules, certain matters have occurred in the marketplace since December 31, 2004, such that some aspects of the Transition Rules and Rules 21 through 40 of the proposed MAIP are either no longer necessary or advisable. For example, changes made in 2005 and 2006 to CAR Rules 11 through 14 and a one-time redistribution of Exclusive Representative Producers ("ERPs") that occurred in early 2006 addressed some of the concerns intended to be addressed by the Transition Rules in the 2004 Order and Decision. Some parts of the changes in the 2004 Decision and Order relating to the rules are, therefore, no longer necessary. In addition, some of the deadlines set in the 2004 Decision and Order for implementation of the MAIP, contained in Rules 21-40, have already passed. Furthermore, the Supreme Judicial Court's decision requires the Commissioner, by remand, to make changes to the "clean in three" provision of the MAIP as set out in the 2004 Decision and Order.
To address these issues, the Commissioner has reviewed the Transition Rules and the MAIP Rules in her 2004 Decision and Order, and has revised them to: 1) eliminate provisions of the Transition Rules that are no longer necessary; 2) integrate retained provisions of the Transition Rules into the current CAR Rules; 3) set a new timetable for implementation of the MAIP; and 4) revise the MAIP Rules to conform to the Supreme Judicial Court's remand regarding the "clean in three" provision.
The proposed revised Transition Rules and proposed MAIP Rules can be viewed on CAR's website at: http://commauto.com and on the Division's website (below). One can additionally find the proposed rules on the Division's website by going to: http://www.mass.gov/doi and then linking to: (1) "News and Updates"; (2) "DOI Regulatory Information"; (3) "DOI Public Hearings"; and (4) "2006 DOI Public Hearings". A redlined version of all proposed changes also will be posted on the website in short order. Paper copies are available for review at the Division.
The purpose of the hearing on November 10, 2006, is to afford all interested parties an opportunity to provide oral and written testimony regarding proposed changes, following remand, to Rules 2, 9 through 14, and 17 and Rules 21 through 40 as they appeared in the 2004 Decision and Order, including the proposed changes to the "clean in three" provision as mandated by the Supreme Judicial Court. With the exception of these proposed changes to the Transition Rules and the MAIP Rules as they appeared in the 2004 Decision and Order, the Commissioner intends to reaffirm the Rules as they appeared in the 2004 Decision and Order. The hearing will not readdress the provisions in the Rules promulgated in the 2004 Decision and Order that were not appealed when issued by the Commissioner in 2004.
Any person who wishes to testify concerning the proposed changes to the Rules as they appeared in the 2004 Decision and Order is requested to submit to the Division of Insurance a Notice of Intent to Testify no later than November 7, 2006. All other interested persons will be heard after those who notify the Division in advance.
All speakers are also requested to file by November 7, 2006 a short written statement of the issues their testimony will address. All notices and submissions must be sent to the Docket Clerk, Hearings and Appeals, Division of Insurance, One South Station, Boston, Massachusetts 02110-2208, and shall refer to Docket No. C2004-02.
Transitional and MAIP Rules dated 12/31/2004 file size 1MB
Amended Transitional and MAIP Rules dated 10/20/2006 file size 1MB
Dated: October 18, 2006