Met P&C to Pay $345K in Restitution

An auto insurance company will pay close to $345,000 in restitution to Massachusetts consumers and an additional $50,000 to the state as the result of an investigation alleging that policyholders with clean driving records were subject to improper non-renewal.

Massachusetts Attorney General Martha Coakley announced the settlement on Sept. 19.

In 2010, the AG’s office began investigating Metropolitan Property and Casualty Insurance Company’s (Met P&C) termination of over 2,600 Massachusetts auto insurance policies in violation of Commonwealth Automobile Reinsurers (CAR) rules that prohibited the non-renewal of “clean-in-three” auto insurance policies.

Under the “clean-in-three” rule, insurers cannot non-renew the policies of drivers who have not had an accident or traffic violation in the past three years.

Under the terms of the assurance of discontinuance, Met P&C will pay 56 consumers a total of $35,000 after their policies were allegedly terminated in violation of state law, and were unfairly assigned to the state’s more expensive residual market – the Massachusetts Automobile Insurance Plan. The company will also pay a total of $310,000 to 2,583 policyholders who were wrongfully non-renewed but found alternative insurance in the voluntary market.

Along with an additional $50,000 in payments to the state, Met P&C has agreed to follow CAR rules and Massachusetts statutes in the future when renewing and non-renewing the state’s private passenger auto policies. Met P&C will also be required to provide all records necessary to show compliance with the assurance of discontinuance in the future.