Insurers Enter Settlement For Failure To Update At-Fault Accident Determinations


The Attorney General of Massachusetts entered into a settlement with five auto insurance companies which allegedly violated a state law involving the Board of Appeal Enforcement Initiative. As such, the insurers would make amends to their practices even as the probe goes forward.

In a press release posted by Attorney General Martha Coakley’s office, the companies involved include Liberty Mutual Insurance Company, Plymouth Rock Assurance Corporation, Metropolitan Property & Casualty, Pilgrim Insurance Company, and, Peerless Insurance. All complaints filed relate to at-fault accident findings which were overturned by the state’s Board of Appeal. Said insurers also allegedly failed “to update at-fault accident determinations (that they have) reported to a private data collection company.”

To put it simply, the insurers did not correctly enter data into the record database each time a driver won an appeal of any at-fault accident determination. This resulted in higher premiums for some consumers, or much more than what they would really have to pay.

The 2009 Board of Appeal statute mandates insurance companies to report and use the agency’s findings in setting the rate for premiums. At the beginning of this month, an “enforcement initiative” was made by Coakley’s office based on reports that insurers failed to follow this procedure. It must also be noted that earlier this month, Commerce Insurance Company had also entered a similar agreement.

Aside from payments that would amount to more than $100,000, the insurance companies would have to “reform their at-fault findings” which were overruled by the Board of Appeal. Premiums of motorists who were affected would have to be re-rated as well.

The settling insurers were said to have used the Merit Rating Board instead of the Comprehensive Loss Underwriting Exchange (C.L.U.E.) which evaluated customers’ driving history. The data collected calculate premiums for most of the state’s motorists. Because of this, consumers eligible for refunds must have purchased their premium from insurers who “must” have used C.L.U.E. instead of the Merit Rating Board. There must also be an at-fault determination which was overturned by the Board of Appeal.

In 2009, the Board of Appeal was created as an independent board which would oversee the fairness of at-fault accident determinations made by insurers. It was enacted on an emergency basis last April because a law was needed for its continued existence. It was the Attorney General’s Office which prodded the inclusion of a provision requiring the reporting of at-fault findings to a private database after such were overturned by the Board of Appeal. Coakley, in emphasizing the role of the Board of Appeal, said that it “plays an important role in protecting consumers.” She added that inflated premiums would have plagued consumers if this practice had not been corrected.