A Brief Guide for P&C Professionals
Come September 2, 2025, a new landscape of consumer protection will take shape in Massachusetts with the enforcement of the Attorney General’s “Junk Fee” regulation, 940 CMR 38.00. This regulation, aimed at combating hidden and deceptive fees, mandates a new level of transparency in pricing for businesses across the Commonwealth. For many in the insurance industry, the initial reaction might be a sigh of relief, as the AG’s guidance offers a broad exemption for most insurance products. However, a closer look reveals a critical distinction that property and casualty professionals cannot afford to ignore.
In a pivotal clarification, the Attorney General’s guidance states:
“Products insuring property or liability are covered by 940 CMR 38 and must meet all of its requirements. For other insurance products which are subject to Massachusetts statutory or regulatory requirements concerning the advertisement, offer, solicitation, sale, or renewal of such products, compliance with said requirements shall constitute compliance with 940 CMR 38.”(Emphasis added).
This statement draws a clear line in the sand. While many sectors of the insurance industry can continue to rely on existing disclosure laws to ensure compliance, property and liability insurance are squarely in the crosshairs of this new regulation. This distinction, though seemingly subtle, has profound implications for the P&C industry, particularly in the realm of personal lines.
The ambiguity of how these new rules will be applied to the nuanced world of P&C premiums and fees is a significant concern. It is this very ambiguity that may give a “green light” to plaintiff attorneys. The regulation provides a new avenue for litigation, inviting scrutiny of every premium, fee, and financial disclosure involving consumer property or liability insurance transactions. Any practice that an astute attorney could construe as violating the new regulation is now a potential litigation risk.
Beyond the specific inclusion of property and liability insurance, the Attorney General’s guidance on 940 CMR 38.00 establishes several key requirements that all covered businesses must follow. These include:
- Total Price Disclosure: At the initial presentation of a price, businesses must clearly and conspicuously disclose the “Total Price,” which is the maximum amount a consumer will pay for a product or service.
- Fee Transparency: The nature, purpose, and amount of all fees must be clearly disclosed. Any optional or waivable fees must be identified as such, with clear instructions on how consumers can avoid them.
- Restrictions on Information Collection: Businesses are generally prohibited from collecting personal information from a consumer before disclosing the Total Price. However, there are exceptions for the insurance industry when this information is necessary for underwriting, determining product availability, or other approved pricing calculations.
- Trial Offers and Automatic Renewals: The regulation sets forth strict rules for trial offers and contracts with automatic renewal features, requiring clear terms, simple cancellation mechanisms, and advance notice of recurring charges.
As we noted in our previous article, “Massachusetts’ New Junk Fee Regulations: Implications for Insurance Professionals,” the insurance industry did receive some accommodations in the final regulation. However, the explicit inclusion of property and liability insurance means that P&C professionals must be proactive in their compliance efforts.
The coming months will be a critical period for the Massachusetts P&C industry. A thorough review of all consumer-facing documents, marketing materials, and disclosure practices is not just recommended; it is essential. The line between a standard fee and a “junk fee” may soon be decided in a courtroom. Now is the time to give all financial disclosures relating to personal lines a detailed legal review.
For further reading, please refer to the full text of the regulation, 940 CMR 38.00, and the Attorney General’s guidance on the application of the regulation, 2025.07.29 Attorney General Revised Guidance ISO 940 CMR 38.00.
Owen Gallagher
Insurance Coverage Legal Expert/Co-Founder & Publisher of Agency Checklists
Over the course of my legal career, I have argued a number of cases in the Massachusetts Supreme Judicial Court as well as helped agents, insurance companies, and lawmakers alike with the complexities and idiosyncrasies of insurance law in the Commonwealth.
Connect with me directly by calling me at 617-598-3801.
