The Legislature passed and sent to Governor Patrick a bill overruling the Commissioner of Insurance’s fourth decision not to allow producers commissions on assigned risk policies written voluntarily by assigned risk carriers. The bill, if signed by the Governor, would also reverse the Supreme Judicial Court decision that upheld the Commissioner’s denial of such commissions. Governor Patrick has ten days to either veto or return the bill to the Legislature with recommended changes. If the Legislature continues in session the bill would become law after ten days without any action by the Governor. The Legislature may go out of session, however, before the ten day period expires and in that case no action by the Governor would result in a “pocket veto” of the bill.
The bill basically extends the agency and brokerage ownership law regarding insurance information to policies issued under the Massachusetts Auto Insurance Plan (MAIP) and requires the payment of commissions on MAIP policies voluntarily written by assigned risk carriers. The commissions payable by assigned risk carriers on the policies removed from the MAIP and written voluntarily have to equal the MAIP commission rate.
If you would like to learn more or have any questions or concerns on how this bill may affect your Massachusetts insurance agency or would otherwise like to discuss any other potential legal issues please contact Owen Gallagher on his direct line at 617.598.3801 or by sending him an email here.