The MPIUA or Mass. FAIR Plan filed the proposed rate on November 14, 2014
On October 9, 2014, the Massachusetts Legislature approved Chapter 346 of the Acts of 2014 to amend M.G.. Chapter 175C, section 1 with regards to the definition of “Basic Property Insurance” language on the law. The change permitted the Massachusetts Property Insurance Underwriting Association, or the Mass. FAIR Plan, to write “Liability coverage for non-owner occupied residential dwellings of 1 to 4 units either by endorsement or as a stand-alone policy” as part of its dwelling coverage. For more details see Agency Checklists’ October 19, 2014 article, Governor Patrick Signs MAIA Bill Providing Coverage in FAIR Plan Dwelling Fire Program.
In November of 2014, the MPIUA submitted a rate filing to the Division of Insurance with regards to the proposed rate, rule and forms provisions for liability coverage as an additional risk covered under dwelling policies. On March 24, 2015, a public hearing was held on the matter to decided whether or not the MPIUA’s rate filing should be approved. On the same day, the MPIUA, the Attorney General’s Office and the State Rating Bureau, all who were represented at the public hearing, submitted a stipulation executed by all parties to the Division representing a negotiated settlement of the rate filing.
Stipulation will keep rates for new MPIUA coverage for non-owner occupied residential dwellings stable for five years
Both the terms of the Stipulation and the initial rates in the Filings were approved by the Division of Insurance on March 24, 2015. In part, the Stipulation, as stated in the Division of Insurance’s decision provides as of the approval of the proposed rates that:
- No party to the Stipulation will object to or appeal from approval by the Commissioner of the proposed rates set forth in the MPIUA’s filing of November 14, 2014 and supplement of December 17, 2014.
- The MPIUA agrees to provide data on dwelling liability claims experience to the SRB and the AG for five accident/fiscal years, starting with the year ending September 30, 2015, and concluding with the year ending September 30, 2019.
- The MPIUA agrees, absent any mandate that significantly broadens its obligations under the dwelling liability coverage, not to file a rate increase for that coverage before January 1, 2020.
- The Parties acknowledges that the Stipulation has no precedential value and will not be relevant in future hearings on any line of insurance.
- Each such party to the Stipulation reserved the right to contest in future hearings all aspects of rate-setting resolved, for present purposes only, by this Stipulation.”
The bottom line is that the MPIUA’s rates for the new statutorily allowed liability coverage for non-owner occupied residential dwellings of 1 to 4 units is approved and it will not change before 202o under the agreement approved by the Division of Insurance hearing officer.
A copy of the Division of Insurance’s decision can be accessed below.