Hearing Scheduled for January 18, 2008

In accordance with the authority granted to the Commissioner of Insurance under Chapter 175E, Section 7 of the Massachusetts General Laws, the Division of Insurance will hold a hearing at 10:00 a.m. on January 18, 2008 at its offices at One South Station, Boston, MA, at the request of the Attorney General, regarding the private passenger motor vehicle rate filing of the Arbella Insurance Company ("Arbella") dated November 27, 2007. This hearing will be conducted day-to-day until the hearing is complete.

The purpose of this hearing is to afford the Parties, who are the Attorney General and Arbella, an opportunity to provide testimony and documents relating to Arbella's proposed rates so that the Commissioner may determine whether such rates are excessive in violation of Chapters 175A and 175E of the Massachusetts General Laws. Specifically, the Commissioner will determine whether the following provisions of Arbella's rate filing, as challenged by the Attorney General, are excessive: (1) the profit provision, which contains an allegedly erroneous AIB calculation as well as calculations for physical damage cash flows, asset returns, investment tax rates, cost of capital and leverage ratios that are alleged to be unreasonable; (2) the expense provision, which contains a contingent commission in the form of profit sharing alleged to be improper; (3) the loss provision, which is alleged to be arbitrary and excessive; (4) an alleged improper inflation of indicated costs for collision and comprehensive coverages as a result of an incorrect application of the symbol drift factor; and (5) an expense calculation that is alleged to be erroneous.

The operation of Arbella's rate filing currently has not been suspended pending this hearing.

A pre-hearing conference will take place on December 28, 2007, at 10:00 a.m. at the Division. The Division will issue a separate notice for this conference in which the issues to be addressed at the conference are identified.

This proceeding is designated as Docket R2007-09 and shall be conducted pursuant to 211 CMR 79.00, et seq. All papers relating to this proceeding shall refer to Docket No. R2007-09 and shall be addressed to the Division of Insurance, Docket Clerk, Hearings and Appeals, One South Station, Boston, MA 02110-2208.

Dated: December 18, 2007

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Nonnie S. Burnes

Commissioner of Insurance