Commonwealth Automobile Reinsurers
225 Franklin Street
Boston, MA 02110
617-338-5422 - MAIP Security
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Monday - Saturday
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Monday - Friday
Residual Market News
MAIP Placement Constraints on Clean-In-Three Risks
Amendments to Rule 21.D. which gradually eliminate a Member’s restriction on non-renewing a Clean-in-Three Risk, were recently approved by the Division of Insurance. A Clean-in-Three Risk is defined as specified in Rule 22 – Definitions of CAR's Rules of Operation. In addition to the existing non-renewal constraints specified in Rule 21.D.1., the following provisions now apply:
- For policies effective prior to June 1, 2012, a Clean-in-Three Risk cannot be non-renewed by a Member.
- For policies effective June 1, 2012 through March 31, 2013, a Clean-in-Three Risk can be non-renewed by a Member if the producer had a voluntary contract with any Member as of April 1, 2009.
- For policies effective April 1, 2013 through March 31, 2014, a Clean-in-Three Risk can be non-renewed by a Member if the producer had a voluntary contract with any member as of April 1, 2010.
- For policies effective April 1, 2014 and subsequent, restrictions on the non-renewal of a Clean-in-Three Risk no longer apply. However, prior to the April 1, 2014 effective date, CAR's Governing Committee agreed to reconfirm the end date based upon an evaluation of then-current market conditions.
At this time of year, MAIP support staff receives numerous motorcycle-related questions. Several of the most common questions are identified below.
1. Is a motorcycle applicant eligible for the MAIP even if he only holds an active motorcycle permit and not a driver’s license?
Yes. Rule 44 – Motorcycles, Motorscooters, Mopeds and Similar Motor Vehicles of CAR's Massachusetts Private Passenger Automobile Insurance Manual indicates that the experienced operator class may only be applied if the operator of the motorcycle has been licensed to operate a motorcycle for at least six years. However, the inexperienced operator class may be applied if the operator of the motorcycle has been licensed to operate a motorcycle for less than six years, or holds a motorcycle permit.
2. Can a motorcycle and a private passenger automobile be written on the same MAIP policy?
Yes. A motorcycle and a private passenger automobile may be written on the same policy. A separate policy is not needed. A motorcycle may also be endorsed onto a MAIP assigned policy.
3. My motorcycle just has minimum coverage and limits. Why is the premium so high?
The most common reason for a high motorcycle premium value being calculated by the MAIP Policy Application is due to the selection of an erroneous operator rate class. When rating a motorcycle, be sure to select the applicable Motorcycle operator class from the Rate Class drop-down box on the Vehicle Page. Also, make sure that the applicable private passenger merit rating value is selected from the drop-down boxes on both the Vehicle and Coverage Pages. The determination of merit rating plan credits and point-based surcharges for motorcycles is the same as for private passenger vehicles.
4. Are motorized scooters and motorized bicycles (including mopeds) eligible for placement through the MAIP?
If the vehicle is registered with the Massachusetts Registry of Motor Vehicles (RMV), it is eligible for placement through the MAIP.
5. What about Low Speed Vehicles? Are they eligible for placement through the MAIP?
Yes. Low Speed Vehicles are eligible for MAIP placement. When rating a Low Speed Vehicle, please be sure to select the applicable Low Speed Vehicle operator class from the Rate Class drop-down box on the Vehicle Page. Also, make sure that the applicable private passenger merit rating value is selected from the drop-down boxes on both the Vehicle and Coverage Pages.
For additional information, refer to the definitions found in Rule 43 – Low Speed Vehicles and Rule 44 – Motorcycles, Motorscooters, Mopeds and Similar Motor Vehicles of CAR's Massachusetts Private Passenger Automobile Insurance Manual.
The MAIP Policy Application has been updated with a new feature that allows producers to void a previously assigned application.
The void function should be used only in cases where the applicant refused coverage through the MAIP, was unable to provide the required down payment or otherwise refused coverage through the MAIP. It will provide notification to the assigned company that no down payment or application will be received for the applicant. It should not be used to enable a resubmission of application information to change or correct information or coverage or in an attempt to change the company to which the risk was originally assigned. Any information or coverage change to the original application should be communicated to the assigned company with or subsequent to the application submission. The void function may not be used if a registration has been processed as a result of an assignment.
The void function is available on assignments made within the past two business days. Any policy not taken by the insured subsequent to two business days following the assignment must be communicated to the assigned company directly.
Three-Year MAIP Policy Non-Renewals
For policies of an Eligible Risk whose three-year assignment period ends effective April 1, 2012 and subsequent, the Assigned Risk Company (ARC) to which the policy was assigned can only offer to write the policy on a voluntary basis or non-renew the policy. If the ARC intends to non-renew the policy, it is required to provide the producer with a list of such policies at least 120 days in advance of the policy expiration date so that the producer is provided with an opportunity to seek replacement coverage for the risk in the voluntary market. If a voluntary placement is not obtained, the producer can then resubmit the risk for placement through the MAIP.
As long as the producer resubmits the risk at least 60 days prior to the policy's expiration date and the new application accurately identifies 1) the policy effective date of the expiring policy as the new policy's policy effective date and 2) the drivers license number of the named insured, the MAIP Policy Application will be able to verify that the insured has been assigned for three consecutive years to the same ARC and that special processing and assignment considerations will apply as follows:
- Upon clicking the Assign button, a message will appear in the Remarks section of the application noting that the applicant is an expiring three-year former MAIP assignment.
- The MAIP premium amount will be calculated, however, the down payment amount will be reflected as zero dollars.
- The policy will be assigned to a company other than to the ARC to which it had previously been assigned.
Note that if the risk is submitted less than 60 days before the policy's expiration, a new business down payment amount of 25% will be calculated and must be collected and forwarded to the newly assigned company along with the application and any required supplemental or additional information.
Enhancement to CAR Rules of Operation 21 – 40
In continuing CAR's ongoing effort to provide useful operational and procedural information to Members, producers, and other interested parties, CAR has developed an archive which contains all prior versions of Rules 21 through 40, beginning with the Rules promulgated by the Commissioner of Insurance on July 16, 2007. In addition, a chronology by calendar year of each approved Rule amendment, including a brief description, and the option to view the CAR Bulletin announcing its approval is also available. This archive is located in the MAIP section of CAR's website, under Rules.
Producer Violation Reporting – Update to Compliance Procedures
The Governing Committee has recently approved a modification to the producer violation compliance procedures requiring an ARP to address remedial action with CAR staff if, over a consecutive three month period, the number of the ARP's validated violations exceeds three percent of the number of applications submitted by the ARP during that time period. The amended language, as approved by the Committee, will be incorporated into the Assigned Risk Producer Procedures Manual.
Please feel free to provide feedback or suggest future MAIP Messenger topics by contacting Marian Adgate at email@example.com.