In an April 6 decision, the Massachusetts Division of Insurance’s hearing officer Jean Farrington approved the Proposed Amendments to the CAR Performance Standards for the Handling of Private Passenger Motor Vehicle Insurance Claims by Assigned Risk Companies. In addition, she approved the proposed Performance Standards for the Handling and Payment of Commercial Motor Vehicle Insurance Claims by Servicing Carriers.
As outlined in the official Decision and Order on January 22, 2021, the Commissioner of Insurance issued a notice scheduling a hearing on the proposed amendments for February 23, 2021. The hearing, which afforded the public and interested parties the opportunity to opine on the matter, discussed the 12 proposals submitted by CAR to amend the two sets of performance standards.
What the DOI Hearing Officer concluded
In issuing her decision, Hearing Officer Farrington offered the following conclusions in the decision, reprinted below:
The amendments that CAR proposes focus on issues related to the SIUs that, pursuant to Article III of the CAR Plan of Operation, each CAR Member must maintain as support for its efforts to control fraud. The amendments to Standards I, II, and III of the Private Passenger and Commercial Standards clarify and strengthen the relationship of the published standards to the SIU operations, by now requiring SIU staff to “adhere to” those standards rather than simply “consult” them. A uniform requirement to follow the standards also ensures a consistent basis for CAR audits of SIU performance.
The amendments that expand the scope of Quarterly Activity Logs to include SIU cases that are referred for suspected irregularities related to underwriting and rating as well as those related to insurance claims reflect language in the CAR Rules. The changes will conform the scope of SIU responsibilities now in Appendix A to the scope now in Appendix J. They will ensure that the reported SIU activities encompass the full range of their responsibilities and create a more comprehensive basis for evaluating insurer efforts to control fraud.
CAR’s proposed amendments to the Measurements and Penalties section of both sets of Standards serve the salutary purposes of creating parity in the consequences for persistent noncompliance with the SIU standards and serving as a deterrent to that noncompliance. On the record of this proceeding, the rationale for those amendments was not challenged.
After a review of CAR’s proposed amendments and the statements at the hearing, we hereby approve the Performance Standards for the Handling and Payment of Private Passenger Motor Vehicle Insurance Claims by Assigned Risk Companies and for the Handling and Payment of Commercial Claims by Servicing Carriers approved by the CAR Governing Committee on December 4, 2020.
How to access an official copy of the order
For those individuals interested in reading or accessing an official copy of the Massachusetts Division of Insurance’s Decision and Order for Docket No. C2020-01, it can be accessed here: