Commonwealth Automobile Reinsurers

Governing Committee Meeting - December 4, 2020

Counsel's Report
The Governing Committee approved a Limited Assignment Distribution Agreement between Pilgrim Insurance Company and Cincinnati Insurance Company.

Commercial Automobile Committee
    The Governing Committee approved the following recommendations of the Commercial Automobile Committee:
  • Beginning with CAR's next commercial rate filing, a commission rate of 8.34% of premium will be filed for all classes of commercial business except the taxi, limousine and car services classes.
  • Chapter V Premium of the Manual of Administrative procedures has been updated to include the Additional Insured Massachusetts endorsement CR 99 02 which was placed on file with an effective date of July 1, 2020. Additional Insured endorsement MM 99 50, which is now obsolete, has been deleted from the table. Refer to Bulletin No. 1108 for further information.
  • Rule 37 Additional Insured Massachusetts of the Commercial Automobile Insurance Manual has been modified to clarify the responsibilities of the Servicing Carrier and the Exclusive Representative Producer.
  • To ensure that CAR procedures are consistent with Registry guidelines with respect foreign drivers' licenses, the Non-Fleet Private Passenger Type standards have been updated to address eligibility of drivers with a valid foreign driver's license, and the (NF-PPT) Certification Form has been updated to require that applicants provide the license expiration date of any operator with a foreign driver's license listed on the application for insurance. The proposed certification form will be filed with the Division of Insurance. Further information will be provided to the industry at that time.

Compliance and Operations Committee
    The Governing Committee approved the following recommendations of the Compliance and Operations Committee:
  • Modifications to the Private Passenger and Commercial Claims Performance Standards and directed 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 the Private Passenger Statistical Plan to use the existing class codes for the inexperienced youthful male gender designations for identifying the non-binary gender designation (Gender X). Refer to Accounting and Statistical Notice No. 656 for further information.
  • Modifications to the Private Passenger and Commercial Statistical Plans to add new Classification Codes for statistically reporting Specialty and Classic Cars and Specialty and Classic Motorcycles. These vehicles are those that have the same usage restrictions as Antique Cars and Antique Motorcycles, but do not meet the age and registration requirements set forth in the statute. Refer to Accounting and Statistical Notice No. 656 for further information.
  • The final close-out of policy effective years 2010 and 2011 for statistical reporting and financial purposes as of the 3rd Quarter 2020.
  • Updates to Chapters VII Participation and VIII Data Reporting, Accounting Edit and Correction Procedures of the Manual of Administrative Procedures to document the process for CAR to automatically close-out a policy effective year for financial and statistical reporting purposes if the total commercial reserve amount is less than $100,000 for a given year. Refer to Bulletin No. 1108 for further information.

Financial Audit Committee
The Governing Committee approved the engagement parameters as presented by AAFCPA for the review of CAR's fiscal year 2020 financial statements and directed CAR's President to execute the engagement letters on CAR's behalf.

Actuarial Committee Meeting
    The Governing Committee approved recommendations of the Actuarial Committee as follows:
  • Amendments to Rule 29 Assignment Process to reflect that in the determination of Quota Share, voluntary exposures for specialty and classic cars and specialty and classic motorcycles will be adjusted by a factor of 0.33. Refer to Bulletin No. 1107 for further information.
  • Rules, Rates and Forms relative to Specialty and Classic Automobiles and Specialty and Classic Motorcycles, including:
     Private Passenger Automobile Manual
    1. The addition of Rule 42 Specialty and Classic Automobiles and Motorcycles. The Rule provides the definition of the Specialty and Classic Motor Cars and Specialty and Classic Motorcycles classification, identifies the endorsement (MP-0003) that must be issued with the policy and makes reference to the page in the Rate Section of the Manual for determining premium.
    2. Updates to the Miscellaneous Motor Vehicles rate page (RS-2) in the Rate Section of the Manual.
    3. Specialty and Classic Auto Endorsement MP-0003 to be issued with a MAIP policy providing coverage for a vehicle classified as a Specialty or Classic auto or motorcycle.
     Commercial Automobile Manual
    1. The addition of Rule 126 Specialty and Classic Automobiles and Motorcycles. The Rule provides the definition of the Specialty and Classic Automobiles and Specialty and Classic Motorcycles classification, identifies the endorsement (CR 99 03) that must be issued with the policy and makes reference to the page in the Rate Section of the Manual for determining premium.
    2. Updates to the Special Types rate page (R-161) in the Rate Section of the Manual.
    3. Specialty and Classic Auto - Massachusetts Endorsement CR 99 03 to be issued with a ceded policy providing coverage for a vehicle classified as a Specialty and Classic auto or motorcycle.
    The approved Private Passenger and Commercial rules, rates and forms will be filed with the Division of Insurance. Further information will be provided to the industry at that time.