CAR Governing Committee Meeting Report from 2/13/19

    Posted by MAIA on February 11, 2019

    The Commonwealth Automobile Reinsurers (CAR) Governing Committee issued this report after their February 13, 2019 meeting. They have made the recommendation to move forward to the Division of Insurance for final approval.  MAIA will advise when/if that final approval is issued. Included are updates from the Counsel’s Report, the Commercial Automobile Committee, and the Compliance and Operations Committee. 

     

    Counsel’s Report

    The Governing Committee approved Limited Assignment Distribution Agreements between Pilgrim Insurance Company and the Metropolitan Property and Casualty Insurance Company and Pilgrim and the Sentry Insurance Group.

     

    Commercial Automobile Committee 

    Verification of Applicant Drivers’ Licenses

    The Governing Committee approved:

    • Modifications to the Eligible Risk definition in Rule 2 – Definitions of CAR’s Rules of Operation and Rule 31 – Operator Exclusion Form of the Commercial Automobile Insurance Manual. Detailed information will be distributed to the industry upon filing the proposed Rules with the Division of Insurance.
    • Standards for the Verification of Applicant Drivers’ Licenses. Upon approval of the proposed Rule and Manual amendments, CAR will publish minimum standard procedures required of Servicing Carriers and ERPs to verify, for new and renewal business, that the applicant establishes that any person who regularly drives the motor vehicle holds a valid operator’s license.

    Producer Requirements

    The Governing Committee approved modifications to Section A.4. Eligibility Requirements of Rule 14 – Exclusive Representative Producer Requirements of CAR’s Rules of Operation to incorporate a market need component into the criteria defining eligibility for an ERP appointment. Detailed information will be distributed to the industry as a CAR Bulletin upon filing the proposed Rule with the Division of Insurance.

    Radius of Operation and Rating Territory

    The Governing Committee approved:

    • Modifications to Rules 52 through 55 in Section III – Trucks, Tractors and Trailers and Rule 72 – Public Automobiles of the Commercial Automobile Insurance Manual clarifying the determination of radius and geographic classification. The amendments address the use of garaging location in determining radius class for public vehicles, clarify the determination of zone combination, and define the assignment of rating territory for non-zone rated public classes. Detailed information will be distributed to the industry as a Commercial Lines Notice upon filing the proposed Rules with the Division of Insurance.
    • Servicing Carrier and Exclusive Representative Producer Standards for Determining and Validating Radius Class and Geographic Classification, with an effective date of 60 days from the date the Rule changes are placed on file by the Commissioner of Insurance.

     

    CAR Commercial Automobile Rate Need Study

    The Division of Insurance has recommended that CAR hire an independent actuarial consulting firm to perform a study of CAR’s Commercial Rating Manual and ratemaking data to develop a long range plan for implementing rate need over time. The Governing Committee directed CAR to establish a committee comprised of members with both actuarial and commercial lines expertise to work with CAR and the AIB on this effort.

     

    Compliance and Operations Committee

    The Governing Committee approved:

    • Modifications to the Private Passenger and Commercial Claims Performance Standards and recommended that they be forwarded to the Commissioner of Insurance for approval. Detailed information will be distributed to the industry as a CAR Bulletin upon filing the Performance Standards with the Division of Insurance.
    • Modifications to Chapter IV – Cession Rules and Procedures to reflect the conversion of CAR’s mainframe Cession Reporting and Correction System to an online application available through CAR’s website. Additional information relative to the online cession application will be provided to the industry in the near future.

     


    For additional information please contact Kathy Cormier at kcormier@massagent.com or 800-742-6363. 

    Topics: The Massachusetts Agent, CAR

    Keep Reading!

    Previous Publication Our Voices Were Heard: Over 60 Legislators Co-Sponsored Our Bill
    Next Publication MAIA Welcomes 7 New Members

    CONTACT MAIA

    *Denotes required field.