BOSTON (Legal Newsline) - Massachusetts Attorney General Martha Coakley announced on Wednesday that an auto insurance company will pay $345,000 in restitution to consumers who allegedly were subject to improper non-renewals.
In addition to the $345,000 in restitution, Metropolitan Property and Casualty Insurance Company will pay the state a $50,000 fee.
Metropolitan allegedly terminated more than 2,600 Massachusetts automobile insurance polices in 2010 in violation of Commonwealth Automobile Reinsurers rules prohibiting the non-renewal of "clean-in-three" automobile insurance policies. The "clean-in-three" rule says that insurers are not allowed to non-renew driver policies if they have not had an accident or traffic violation in the past three years.
Under the terms of assurance and discontinuance, Metropolitan will pay a total of $35,000 to 56 consumers who had policies terminated in violation of state law and were unfairly assigned to the Massachusetts Automobile Insurance Plan, the state's more expensive residual market, Coakley says.
An additional 2,583 policyholders will be paid an approximate total of $310,000 for wrongful non-renewal but who found alternative insurance in the voluntary market, Coakley says.
The company is also required to provide all records necessary to demonstrate compliance with the assurance of discontinuance in the future.