RECORDS OF MEETING MAIP STEERING COMMITTEE JULY 31, Members Present

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1 RECORDS OF MEETING MAIP STEERING COMMITTEE JULY 31, 2014 Members Present Mr. John V. Kelly Chairman Mr. William J. Cahill, Jr. Ms. Jean E. Downey Mr. Sumner D. Gilman Mr. Christopher Jarrard Mr. Richard P. Jones Mr. Douglas R. Long* Mr. David J. McCormick Ms. Ann M. McKeown Mr. M. John Olivieri, Jr. Mr. Patrick J. Quinn Ms. Erin Schaaf The Commerce Insurance Company Hanover Insurance Company The Norfolk & Dedham Group Economy Insurance Agency, Inc. GEICO Leslie S. Ray Insurance Agency, Inc. Liberty Mutual Group McCormick and Sons Insurance Agency, Inc. Safety Insurance Company J.K. Olivieri Insurance Agency, Inc. Quinn Group Insurance Agency, Inc. Arbella Insurance Group Substituted for: Mr. Paolo V. Abelli* Not in Attendance: N/A Records of Previous Meeting The Committee unanimously voted to approve the Records of the MAIP Steering Committee meeting of May 20, The Records have been distributed and are on file with CAR s Secretary Installment Plan and Related Fees At its meeting of May 20, 2014, the Committee requested staff to prepare additional information to assist the Committee in determining whether to pursue increases to the existing installment plan, dishonored check and late/cancellation fees and introduce financial responsibility and policy fees. Ms. Natalie Hubley reviewed with the Committee an exhibit identifying the number of carriers charging each of the fees currently included in Rule 28, the companies and other residual markets that currently charge the newly considered fees, the fee amounts, and the type of documentation supporting the fees as included in the company rate filings with the Division of Insurance. She also reviewed an exhibit providing demographic data, including exposures, average premium and market share by territory, rate class, and merit rating status for both the voluntary market and for MAIP business, with a market share comparison of each. The Committee discussed each of the fees individually and agreed that modification to the installment plan, dishonored check and late/cancellation fees may be appropriate, as those fees are driven

Erin Schaaf The Commerce Insurance Company Hanover Insurance Company The Norfolk & Dedham Group Economy Insurance Agency, Inc. GEICO Leslie S. Ray Insurance Agency, Inc.

2 by policyholder actions and have not been reviewed or adjusted since the inception of MAIP. However, it was the Committee s consensus that the introduction of either a financial responsibility or policy fee should not be pursued as their implementation would not be cost justified and these expenses are more appropriately built into the company and the MAIP rates. Accordingly, the Committee unanimously voted to direct staff to prepare an analysis of company expenses relating to the installment plan, dishonored check and late/cancellation fees for review by the Committee at its next meeting Electronic Signature At its last meeting, the Committee discussed the acceptance of an electronic signature for applications assigned through the MAIP, and directed staff to survey carriers to identify whether they currently accept electronic signature in the voluntary and assigned risk markets and how associated costs are borne. Ms. Hubley indicated that staff surveyed twelve carriers and received responses from eight of the carriers. Of the eight carriers, five do not accept an electronic signature for either voluntary or residual market business. Two of the carriers accept an electronic signature for voluntary business only, and one of the carriers accepts it for both voluntary and residual market business. The acceptance of an electronic signature would require the carrier to implement an operational change; however, the cost for an electronic signature software subscription is typically borne by the producer. After discussion, the Committee agreed that although there is not currently support to require companies to accept electronic signature, use of this technology is becoming more widespread. Accordingly, CAR should continue to monitor implementation issues in order to reconsider such a requirement at a future date. MARIAN ADGATE Corporate Documentation Specialist Boston, Massachusetts September 4, 2014 Page 2

expenses are more appropriately built into the company and the MAIP rates.

3 Records of Meeting July 31, 2014 MAIP Steering Committee ATTACHMENT LISTING Docket #MSC14.02, Exhibit #2 Attendance Listing

4 CAR DOCKET #MSC14.02 EXHIBIT #2 PAGE 1 OF 2

5 CAR DOCKET #MSC14.02 EXHIBIT #2 PAGE 2 OF 2

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