Commonwealth Automobile Reinsurers

Governing Committee Meeting - February 19, 2019

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.

Financial Audit Committee
The Governing Committee was advised that PricewaterhouseCoopers will issue a clean, unqualified review report as of and for the fiscal year ended September 30, 2018. Accordingly, the Governing Committee approved CAR's fiscal year 2018 financial statements. In addition, the Committee approved a recommendation for CAR to conduct a Request for Proposal for accounting services.