Attorney General Martha Coakley’s Office Has Begun Investigations Into Other Insurance Companies
Metropolitan Property & Casualty Insurance Company (Met P&C) has settled with Attorney General Martha Coakley’s office in response to an investigation which found the insurer had failed to reimburse various policyholders automobile insurance surcharges that had been levied but successfully appealed.
“This is another example of an auto insurance rating problem that our office discovered as a result of a consumer complaint,” AG Coakley said. “While we are troubled that these overcharges occurred, we are pleased that we were able to stop this unlawful practice and protect consumers.”
Unlike many states, in Massachusetts, motorists may appeal auto insurance surcharges to the Commonwealth’s Board of Appeal, which is an independent board that reviews the fairness of at-fault accident determinations made by insurance companies for surcharge purposes. Once a surcharge is vacated by the Board of Appeal, the law mandates that an insurance company must provide a refund of the surcharge premium to that policyholder.
The Attorney General’s Office’s began an investigation into Met P&C’s surcharge practices after receiving a complaint from a Massachusetts consumer whose surcharge had been vacated by the Board of Appeal in 2010. While Met P&C cooperated throughout the investigation, the Attorney General discovered that the insurer had reportedly failed to refund the consumer more than $700 dollars that it had charged its policyholder in the form of surcharge premiums.
Under the terms of the assurance of discontinuance filed in Suffolk Superior Court last week, Metropolitan Property & Casualty has agreed to permit a supervised audit of its practices with regards to reimbursing levied surcharges on policyholders who had successfully had them vacated by the Commonwealth’s Board of Appeal. Once the audit has determined the exact amount of restitution to each policyholder, Met P&C has promised to reimburse that insured the amount plus six percent interest. Additionally, the company will pay the Commonwealth $50,000 plus any additional amounts depending upon the outcome of the audit.
Agents may want to inform their own insureds about this case and the AG’s ongoing investigation
While the AG’s office noted that not all Met P&C automobile insurance policyholders may be affected, it is important to alert those that might be affected by this decision. As the AG’s office is also expanding its investigation to verify the practices of other Massachusetts insurers, it might be well to be up-to-date on any refunds that your insureds may be do.
This latest news also provides a nice segue in general to discuss with your customers about automobile insurance surcharges in general and the right of appeal your insured has at the Commonwealth Board of Appeals. To help answer any questions the Division of Insurance also provides a helpful questionnaire which you can access here: Frequently Asked Questions About At-Fault Accident Surcharges For Personal Automobile Insurance Policies .