The MPIUA filed the rate changes on April 12th to be effective July 1st
On April 12, 2013, the Massachusetts Property Insurance Underwriting Association, better known as the MA FAIR Plan, filed its latest proposed rate plan which seeks a statewide increase of 6.8% increase in rates across all forms. The MPIUA was created to provide basic property insurance for those homeowners who are unable to obtain homeowner’s insurance through the voluntary market. The FAIR Plan’s current proposal has been filed with the Division of Insurance and will need its approval (or the Commissioner’s to be more specific) before its implementation. If approved the new rates will go into effect on July 1, 2013.
The following is a chart outlining the MPIUA’s Indicated and Proposed Rate Changes for July 1, 2013:
|Homeowners||Statewide Indicated Rate Change||Statewide Proposed Rate Change|
|Form HO 2, 3, 5||9.9%||7.0%|
|Form HO 4||-10.5%||-5.6%|
|Form HO 6||11.2%||6.1%|
|Dwelling Program||Statewide Indicated Rate Change||Statewide Proposed Rate Change|
|Fire And EC||7.0%||5.2%|
|Commercial Property||Statewide Indicated Rate Change||Statewide Proposed Rate Change|
|Fire and Allied Lines||0.9%||0.0%|
Last year, the Commissioner of Insurance rejected the FAIR Plan’s rate filing which sought a 7.2 percent statewide average rate increase. In denying that request, the Commissioner noted that the MPIUA had failed “…to meet its statutory burden of proof by demonstrating that its filing met the applicable statutory and regulatory standards.” Chapter 175C, Section 5, which governs the MPIUA mandates that its property and casualty rates “…not be excessive, inadequate or unfairly discriminatory.”
In January of this year, The Boston Globe reported that an unexpected benefit of the introduction of “managed competition” to the state has been the exodus of homeowner’s from the FAIR Plan as a result of more insurers in the state and the trend in “bundling” of premiums. As a result, the Globe says that since the introduction of managed competition in 2008, the FAIR Plan has lost almost 27,000 customers or 16 percent of its base.