RESIDUAL MARKET CHANGES UNCLEAR:

Massachusetts Insurance Commissioner Julianne Bowler has asked Commonwealth Auto Reinsurers (CAR) to revise its proposed residual market plan but CAR governing committee members have questions they need answered before they implement the changes she requested in the new Massachusetts Assigned Insurance Plan (MAIP). At a special meeting on Sept. 9, the CAR governing committee decided to request clarification from Bowler before complying with her request for amendments to its MAIP rules. She gave CAR a Sept. 24 deadline. CAR executives expressed uncertainty over how to amend the transition rules involving high loss ratio agencies and questioned what new claims handling standards and servicing carrier and producer requirements the commissioner had in mind. They also sought clarification of the underwriting guidelines Bowler believes appropriate for the so-called “clean in three” proposal under which experienced drivers with no-fault accidents or moving violations in the most recent three years cannot be placed in the assigned risk plan. Noting the confusion over the MAIP plan, Commerce Insurance, the state’s largest auto writer and an outspoken opponent of the manner in which the MAIP is being implemented, offered its own substitute transition scheme. Arthur J. Remillard Jr., Commerce chief executive officer, maintained that his company’s alternative plan “will resolve the issue of high risk loss allocation while eliminating the confusion and complexity” of the transition plan that Bowler wants reviewed. Remillard’s proposal was put on the agenda for future discussion. Bowler has scheduled a hearing on whatever changes CAR eventually recommends for Oct. 4.