This question was answered based upon current rules, regulations & statutes in effect on May 03, 2019
I was curious if you could answer a question for me. We have a policyholder whose current policy has a 3 point surcharge on it and would be a points 98 at renewal come 03/2020. He’s replacing his vehicle now and instead wants to cancel the current policy and have us write a new policy for his new vehicle so that it’ll be issued at points 98 instead. We don’t allow an Insd to manipulate the situation to avoid SDIP charges. I’m curious to know if this is a state regulation or maybe just State Farm’s standpoint. Our underwriting department referred me to ask the state.
I’d appreciate any feedback you have.
Kathy Cormier: Prior to competition in Massachusetts there was a section in the Rule manual under Rule 18: Cancellations that stated:
No policy in effect prior to a rate level revision shall be endorsed or cancelled and rewritten to take advantage of such a revision or to avoid the application of such a revision.
There was nothing in the rules that stated you couldn’t cancel and rewrite because of a change in SDIP. This is your companies decision, but that does not mean that the client can’t replace the coverage with another carrier if your company chooses not to do this. After competition started in MA that language above was removed from the rule.
I hope this helps.
Company: Extremely helpful Kathy, thank you so much for getting back to me.
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