The Commissioner of Insurance has approved the proposed amendments to the following CAR Rules:
- Rule 28 – Application Process
- Rule 30 – Assigned Risk Company Requirements
- Rule 31 – Assigned Risk Producer Requirements
Originally submitted on April 27, 2012, the proposed changes became the subject of a hearing held at the Division of Insurance on June 8, 2012. The Massachusetts Association of Insurance Agents requested the hearing at the DOI to discuss the proposed changes which concern the application process for obtaining insurance through the MAIP as well as the obligations of Assigned Risk Producers (“ARPs”) and the obligations of Assigned Risk Companies during this process.
At the hearing, representatives from the Massachusetts Association of Insurance Agents, Massachusetts Urban Agents Association, Commonwealth Automobile Reinsurers, the Massachusetts Insurance Federation and Win-Rater all gave testimony regarding the best procedures for an ARP to obtain insurance through the MAIP while ensuring that it has access to the relevant ARC’s voluntary rates.
After a review of the testimony and evidence presented the Commissioner of Insurance approved the proposed amendments that were submitted on April 27, 2012. The following excerpt has been taken from the official decision:
The ultimate effect of the proposed rule amendments is to improve the timeliness of accurate premium quotes to MAIP applicants and renewing policyholders so that the down payment can be correctly calculated. The proposed amendments formalize procedures for ARCs to provide rating information to ARPs on a timely basis, but build on systems that are already in place. ARCs universally need systems that enable them to quote premiums for new and renewal customers, but not all ARCs necessarily use the same system.
A central system available through CAR to calculate voluntary rates for the purpose of operating the MAIP would duplicate information that ARCs already have. Development and maintenance costs for such an information system would require significant financial resources, thereby increasing CAR’s costs of operation, costs that are borne by the industry and, ultimately, by consumers. It is reasonable to select options that recognize the need to provide access to rating information to all ARPs who submit applications to the MAIP, but avoid duplication and maximize the use of existin methods for providing premium quotes.
For the above reasons, CAR’s proposed amendments to Rules 28, Rule 30 and Rule 31 as submitted to the Commissioner on April 27, 2012, are approved.