211 CMR 79.08 - Activities of Insurers and Rating Organizations

Current through Register 1466, April 1, 2022

(1) Prohibited Activity by Insurers and Rating Organizations.
(a) No Insurer or Rating Organization shall monopolize or attempt to monopolize, or combine or conspire with any other person or persons to monopolize, in any territory, the business of private passenger motor vehicle insurance or any kind, subdivision or class thereof.
(b) No Insurer or Rating Organization shall agree with any other Insurer or Rating Organization to charge or adhere to any Rate, prospective loss cost, rating plan, rating schedule, rating rule, policy or bond form, rate Classification Plan, rate territory, underwriting rule, survey, inspection or similar material, except as needed to exchange Statistical Information as authorized by the Commissioner. In addition, a Rating Organization may establish advisory manuals of Classification Plans, rules and Rates, rating plans or modifications of any of the foregoing in any manner not prohibited by the Commissioner.
(c) No Insurer or Rating Organization shall make any agreement with any other Insurer, Rating Organization or other person that:
1.Restrains trade; or
2.Substantially lessens competition in any territory or in any kind, subdivision or class of insurance.
(d) No Insurer may acquire or retain any capital stock or assets of, or have any common management with, any other Insurer or Insurers, if the effect of such acquisition, retention or common management may be to substantially lessen competition in any territory or in any kind, subdivision or class of insurance.
(e) No Insurer or Rating Organization shall make any agreement with any other Insurer or Rating Organization to refuse to deal with any person in connection with the sale of insurance.
(f) No Rating Organization or member or subscriber thereof shall interfere with the right of any Insurer to make its Rates independently of such Rating Organization or to charge Rates different from the Rates filed by such Rating Organization.
(g) No member of or subscriber to a Rating Organization shall refuse to do business with, or prohibit or prevent the payment of commission to any licensed insurance producer on the ground that such insurance producer does business with an Insurer which files its Rates, or any portion thereof, independently of such Rating Organizations.
(h) Nothing in 211 CMR 79.00 shall be construed as requiring any Insurer to become a member of or a subscriber to any Rating Organization, or as preventing any Insurer, while a member of or subscriber to a Rating Organization, from making its own Rates for any kind, subdivision or class of insurance, for which it does not elect to authorize the Rating Organization to act on its behalf.
(i) Any Insurer which is a member of or subscriber to a Rating Organization may make its own Rates for any kind, subdivision or class of insurance. No Rating Organization shall have authority to act on behalf of any Insurer which is a member of or subscriber to such Rating Organization except as authorized in writing by such member or subscriber, which authority may be supplemented, modified or revoked, in whole or in part, at any time by such member or subscriber at its option.
(j) No Rating Organization shall have or adopt any rule or execute any agreement, or formulate or engage in any program, the effect of which would be to require any member, subscriber or other Insurer to utilize some or all of its services, or to adhere to its Rates, rating plans, rating systems, underwriting rules, or policy forms, or to prevent any Insurer from acting independently.
(k) Notwithstanding 211 CMR 79.08(6)(a), in a Competitive Market no Rating Organization shall prepare or file an Advisory Filing for any motor vehicle coverage subject to M.G.L. c. 175E, that includes a coverage level rate that is based on the total loss experience of all companies.
(2) Penalties and Actions. The Commissioner shall disapprove any Rate or Advisory Filing that does not comply with M.G.L. c. 175E, § 6 or 211 CMR 79.08(1), and shall seek appropriate injunctive relief and penalties in order to enforce strictly the provisions of M.G.L. c. 175E, § 6 and 211 CMR 79.08.
(3) Affiliated Insurers. The provisions of 211 CMR 79.08(1) shall not be construed to prohibit two or more Insurers in an Insurance Company Group, from having the right to exchange Statistical Information.
(4) The fact that two or more Insurers, whether or not members or subscribers of a Rating Organization, use, either consistently or intermittently, the manuals of Classification Plans, rules and Rates, rating plans, modifications of any of the foregoing or recommendations of such organizations, shall not be sufficient in itself to support a finding that an agreement to adhere exists, and may be used only for the purpose of supplementing or explaining direct evidence of the existence of any such agreement.
(5) Notwithstanding M.G.L. c. 175A, M.G.L. c. 175E, § 6 and any other provision of 211 CMR 79.08, a Rating Organization, with the participation of its members, may:
(a) Develop and make recommendations to the Commissioner with respect to statistical plans.
(b) Collect, compile and distribute Statistical Information to its members and subscribers, provided such information shall be supplied upon request to the Division and may be supplied, upon payment of a reasonable charge therefore, to any Insurer or other person, whether or not a member or subscriber of the Rating Organization.
(c) Prepare, distribute and file Rating Manuals on behalf of any member or subscriber that authorizes it to make such a filing in accordance with M.G.L. c. 175E, § 6(a)(10).
(d) Prepare, distribute and file policy forms and endorsements on behalf of any member or subscriber that authorizes it to make such a filing in accordance with M.G.L. c. 175E, § 6(a)(10).
(e) Conduct and publish studies of general actuarial and rate making issues, provided such studies shall be supplied, upon request, to the Division and, upon payment of a reasonable charge therefore, to any Insurer or other person, whether or not a member or subscriber of the Rating Organization.
(f) Perform any other actions in connection with motor vehicle insurance Rates which are not inconsistent with M.G.L. c. 175E.
(6) Notwithstanding M.G.L. c. 175A, M.G.L. c. 175E, § 6 and any other provision of 211 CMR 79.08, a Rating Organization, without the participation of its members, may:
(a) Prepare and file an Advisory Filing for any motor vehicle coverage subject to M.G.L. c. 175E, based exclusively on the collective loss and exposure experience of the Under One-percent Companies for the purpose of establishing average coverage level rates; provided, however, that such an Advisory Filing may include the experience of all companies for the purpose of establishing rate relativities and factors supporting the Classification Plan.
(b) Prepare and file a Rate Filing on behalf of CAR if CAR authorizes it to make such a filing.
(c) Prepare and file a Rate Filing on behalf of an Under One-percent Company, as determined under M.G.L. c. 175E, § 4(e) and 211 CMR 79.00, and which authorizes it to make such a filing in accordance with M.G.L. c. 175E, § 6(a)(10).
(d) If an Under One-percent Company has Expenses, including commissions, prior to trending, which are 80% or less than those underlying the Advisory Filing made by a Rating Organization on behalf of such Companies or the Rate Filing of another Insurer which is adopted by such Insurer, the Under One-percent Company shall not adopt that external Advisory Filing without deviating therefrom so as to reflect its lower Expenses, unless specific and substantial reasons for not so deviating have been provided to and approved by the Commissioner.

Notes

211 CMR 79.08
Amended by Mass Register Issue 1355, eff. 12/29/2017. Amended by Mass Register Issue 1365, eff. 12/29/2017.

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