Four auto insurance companies settle with Mass. AG

Nick Rees May 5, 2010, 3:24pm


BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley has announced four settlements with auto insurance companies over allegedly inaccurate at-fault insurance reports as part of her ongoing Board of Appeal Enforcement Initiative.

As a result of the settlements involving the practices of Arbella Mutual Insurance Company, Norfolk & Dedham Mutual Fire Insurance Company, United Services Automobile Association and Electric Insurance Company, the driving records of approximately 10,000 Massachusetts drivers will be corrected.

The settlements were made in regards to alleged violations of the state's 2009 Board of Appeal statute. The insurers were alleged to have failed to correct at-fault accident findings that were overturned by the state's Board of Appeal that were reported to private data collection companies.

The investigation into the at-fault data reporting practices by the four insurance companies began in October 2009 following a consumer complaint that alleged the consumer had been overcharged by GECIO based on an at-fault finding made by Commerce Insurance Company. After the Board of Appeal determined the consumer was not at-fault, the company failed to correct the report.

The insurers, as part of the settlement, agreed to comply with the state's Board of Appeal statute going forward and to make payments to the state totaling more than $100,000. Additionally, the company's will correct the at-fault accident findings that they previously reported to private data collection companies.

The insurers are also required by the settlement to report the at-fault accident finding corrections to insurance companies that actively use information from private databases in calculating premiums for Massachusetts drivers. Any driver who was surcharged by such an insurer as a result of an at-fault report that a settling insurer should have corrected will receive a payment from the settling insurer.

Hanover Insurance Group, Progressive Insurance Company, GEICO, Occidental Fire & Casually, and Ameriprise Auto & Home have, since the deregulation of the auto insurance market in April 2008, used private databases to rate Massachusetts customers.

"If this problem had not been caught and corrected, these at-fault reports could have resulted in premium overcharges to Massachusetts drivers for years to come," Coakley said. "

Similar agreements have also been reached with Commerce Insurance Company, Metropolitan Property & Casualty, Liberty Mutual Insurance Company, Peerless Insurance Company, Plymouth Rock Assurance Corporation and Pilgrim Insurance Company in February.

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