Failed to Apply “Clean-In-Three” Rule to More Than 2,600 of Its Auto Insurance Policyholders
In 2010, the Attorney General began an investigation into the practices of the Metropolitan Property & Casualty Insurance Company which had terminated more than 2,600 of its Massachusetts automobile insurance policies. Under the rules of the Commonwealth of Automobile Reinsurers (CAR), a driver’s record becomes “clean-in-three” if that driver has not had an accident or traffic violation in the last three years. According to the Attorney General, Metropolitan had improperly “non-renewed” these 2,600 drivers in violation of this rule.
As a result of the ongoing investigation, the Attorney General has announced that that its office and the insurer have come to an agreement. Under the terms of the assurance of discontinuance filed on September 18th in the Suffolk Superior Court, Metropolitan Property & Casualty has agreed to pay approximately $345,000 in restitution to its former policyholders. Fifty-six of these consumers will receive a total of $35,000 for the illegal termination of their auto insurance policies which resulted in them being assigned to the Massachusetts Automobile Insurance Plan. The remaining $310,000 will be paid to the 2,538 policyholders Metropolitan also wrongfully terminated but who were ultimately able to secure alternative insurance in the voluntary market, thereby avoiding the more costly MAIP option. The Commonwealth will also receive a $50,000 payment from the company.
Aside from the monetary payment, the Attorney General’s office also says that Metropolitan has agreed to abide more closely to the CAR rules and Massachusetts statutes and regulations in the future when renewing and non-renewing Massachusetts private passenger automobile insurance policies. Metropolitan has also agreed to let the AG’s office conduct further reviews into their practices to ensure that the company is complying with the assurance of discontinuance terms and conditions.