MASS. TO HEAR HIGH RISK AUTO PLAN:

Massachusetts Insurance Commissioner Julianne Bowler has scheduled a public hearing for July 22 to hear testimony on proposed rule changes to the state’s high risk auto facility. Commonwealth Auto Reinsurers (CAR), the current high risk organization, at Bowler’s urging, in order to convert to an assigned risk type operation, approved the changes. But Bowler must approve them before they go into effect. Her decision to hold a public hearing signaled that she would not adopt the rule changes as emergency regulations that go into effect immediately. Some of the proposed changes had July 1 effective dates. However, it does not preclude her deciding after a public hearing to implement rules retroactively under state law, according to the Division of Insurance. Most, but not all, within the state’s insurance industry support the move to an assigned risk plan. Chief among the opponents is Commerce Insurance Co., the state’s largest writer of private passenger auto coverage. Commerce exercised its right to request a public hearing and has cited what it believes are legal problems with the conversion plan. In related news, the Fireman’s Fund Insurance Companies gave notice to Massachusetts officials that it intends to withdraw from the state’s personal automobile insurance market on Dec. 31, 2004, but if the insurance reform package is enacted, it will rescind its withdrawal action “Fireman’s Fund would prefer to continue serving the personal auto insurance needs of consumers in Massachusetts” said Cynthia Tidwell, president of personal insurance for Fireman’s Fund. “However, given the current environment, we have no choice but to issue a notice of our intent to withdraw from personal auto insurance in Massachusetts. Fireman’s Fund cannot achieve necessary financial targets within the rules of the existing state personal lines auto program.” The company said it could not wait any longer to make a decision because regulatory deadlines require companies to give notice to CAR six months in advance of actual withdrawal. Fireman’s Fund, while not a major player in the state’s auto market, is one of only 19 writers. Fireman’s Fund currently writes about 22,000 auto customers in Massachusetts, representing less than 1 percent of the state’s auto market.