RECORDS OF MEETING MARKET REVIEW COMMITTEE

Transcription

1 RECORDS OF MEETING MARKET REVIEW COMMITTEE A meeting of the was held at the offices of Commonwealth Automobile Reinsurers, 100 Summer Street, Boston on Members present - TUESDAY, MARCH 4, 2003 AT 10:00 A.M. Mr. Charles I. Boynton, III Chairman Boynton Insurance Agency, Inc. Ms. Nancy Z. Bender Mr. George Burke* Mr. David H. Cochrane Mr. Robert J. Cordner Mr. Daniel F. Crimmins Mr. John B. Doherty Mr. Sumner D. Gilman Ms. Paula W. Gold Mr. John F. Kittel Mr. Douglas R. Long Mr. Frank A. Mancini** Mr. Edward C. Ruhl Ms. Susan K. Scott Mr. Mark R. Silva Mr. William J. Whitebone Nancy Z. Bender Insurance Agency, Inc. O Brien & Gibbons Insurance Center The Commerce Insurance Company OneBeacon Insurance Safety Insurance Company Barry & McHugh Insurance Agency, Inc. Economy Insurance Agency, Inc. Plymouth Rock Assurance Corporation Arbella Mutual Insurance Company Liberty Mutual Group Massachusetts Association of Insurance Agents The Hanover Insurance Company The Premier Insurance Company of Mass. Benson, Young & Downs Ins. Agency, Inc. Quincy Mutual Fire Insurance Company Substituted for Mr. Francis D. Gibbons* Substituted for Mr. David J. McCormick** Commonwealth Automobile Reinsurers present - Mr. Ralph A. Iannaco Mr. Joseph J. Maher, Jr. Mr. John D. Metcalfe President Vice President, General Counsel & Secretary Director of Administration & Market Relations

2 Records of Meeting -2- March 4, 2003 Commonwealth Automobile Reinsurers present (continued) Mr. Timothy J. Costain Ms. Adrianne Donovan Ms. Pamela Wallace Market Relations Manager Senior Administrative Support Assistant Director of Data Quality Services Also present Mr. John Bourroughs Mr. Jeff Winiker Mr. Mark Winiker Mr. Ronald Rainer Mr. Robert Suglia Mr. Steven Slattery Edward J. Donahue, Esq. Ms. Joanne Borden Mr. James Herrick Richard F. Wholley, Esq. David A. Bakst, Esq. Mr. James Hayes Peter Robertson, Esq. Mr. Graham Smith Mr. Barry Tagen Mr. Kenneth Willis Christopher Matherly, Esq. Mr. Paul Coleman Mr. Gilbert Quinn A Affordable Insurance Agency, Inc. Amica Mutual Insurance Company Arbella Mutual Insurance Company Ferriter, Scobbo & Rodophele PC Fireman s Fund Insurance Company The Hanover Insurance Company Law Offices of Richard F. Wholley Morrison, Mahoney & Miller, LLP Norfolk & Dedham Group Office of Peter Robertson People s Insurance Agency, Inc. Pilgrim Insurance Company Plymouth Rock Assurance Corporation The Premier Insurance Company of Mass. Safety Insurance Company White & Quinn Insurance Agency, Inc. Chairman Charles Boynton called the meeting to order at 10:00 a.m.

3 Records of Meeting -3- March 4, Records of Previous Meeting A motion was made by Mr. Mark Silva and seconded by Mr. Sumner Gilman to approve the Records of the meeting of February 4, The motion passed on a unanimous vote Butler & Breslin Insurance Agency, Inc./Safety Insurance Company At its February 4, 2003 meeting, the voted to continue the matter involving the request for review submitted by the Butler & Breslin Insurance Agency, Inc. until its next meeting. The agency was seeking relief relative to the application of a commission deviation by the Safety Insurance Company based on agency loss ratio, where the company used the experience of the agency s prior owner in determining this particular agency s loss ratio. Chairman Boynton advised that CAR had received correspondence prior to the meeting from the Butler & Breslin Insurance Agency, Inc. requesting that the request for review be withdrawn A Affordable Insurance Agency, Inc./Amica Mutual Insurance Company The A Affordable Insurance Agency, Inc. requested a review relative to the action of the Amica Mutual Insurance Company in refusing to provide service to an office location in Brockton which A Affordable intends to acquire from another agency. As a courtesy to the parties, Mr. Sumner Gilman disclosed that through his premium finance company, he maintains a business relationship with the Amica Mutual Insurance Company, the A Affordable Insurance Agency, Inc., and Attorney Richard Wholley. He offered to withdraw from the matter if either party objected to his participation. Neither party objected to the participation of Mr. Gilman. Ms. Susan Scott advised that her company maintains a business relationship with the A Affordable Insurance Agency, Inc. and offered to withdraw if either party objected to her participation in the matter. Neither party objected to the participation of Ms. Scott. Mr. John Kittel indicated that he would not participate in the matter. Attorney Richard Wholley, representing the A Affordable Insurance Agency, Inc., advised that he also represented the Ramy Insurance Agency, (Docket #03.08). Mr. Wholley asked that the Committee consider the matter involving the Ramy Insurance Agency first, noting that it was very brief and he wished to leave the meeting following consideration of the matter involving the A Affordable Insurance Agency, Inc.

4 Records of Meeting -4- March 4, A Affordable Insurance Agency, Inc./Amica Mutual Insurance Company (continued) A motion was made by Mr. John Kittel and seconded by Mr. Sumner Gilman to consider the matter involving the Ramy Insurance Agency (Docket #03.08), before proceeding with the matter involving the A Affordable Insurance Agency, Inc. (Docket #03.05) The motion passed on a unanimous vote Ramy Insurance Agency/The Premier Insurance Company of Mass. The Ramy Insurance Agency, requested a review of the termination of its Exclusive Representative Producer appointment by The Premier Insurance Company of Mass. for violations of Rules 13, B, 3, g, and 14, B, 1, k, Quote proper premiums based on information provided by the applicants for the coverage desired as well as Rule 14, B, 1, c, Verify that the applicants for insurance have not been in default in the payment of any motor vehicle premiums in the twelve months preceding the date of application. Ms. Susan Scott indicated she would not participate in the matter. Attorney Wholley indicated that the parties have agreed to a continuance of the matter until the s next meeting. He added that until that meeting, the parties have agreed to allow the agency to write new business. Attorney Christopher Matherly, representing The Premier Insurance Company of Mass., concurred with Mr. Wholley s statement. The Committee agreed to continue the matter until its next meeting A Affordable Insurance Agency, Inc./Amica Mutual Insurance Company (continued) Attorney Wholley indicated that the A Affordable purchase of the People s Insurance Agency in Brockton should not be subject to the moratorium on Exclusive Representative Producer expansion, adding that in this case, market need has already been established and an ERP appointment made. He indicated that the fact that the selling agency s ERP appointment has been terminated does not eliminate the existence of the agency s office and asserted that the termination is not final until the review process is exhausted. Mr. Wholley indicated that a precedent has previously been established in a matter involving the same circumstances. He noted that the Committee voted in favor of allowing continuation of an office in the previous matter and said that there has not been a rule change since which would dictate that the Committee vote otherwise at this time. He cited specific and Governing Committee Review Panel meetings wherein he contended that relevant decisions were rendered which would dictate a favorable decision for his client at this time. Mr. Wholley said that the Committee must be able to rely on past precedent and asked the Committee to grant the agency s request to assume the seller s office.

5 Records of Meeting -5- March 4, A Affordable Insurance Agency, Inc./Amica Mutual Insurance Company (continued) Attorney Edward Donahue, representing the Amica Mutual Insurance Company, explained that the existing Exclusive Representative Producer location has been terminated by its Servicing Carrier and while the termination is under review, it remains in effect. Mr. Donahue indicated that the book of business can be purchased but the additional location cannot be kept active because it is located in a city which is not currently a market need community. He added that the upheld the agency s Exclusive Representative Producer appointment termination and the office location along with it. He indicated that to allow A Affordable to maintain an office of a terminated ERP would place potential applicants for newly emerging ERP appointment in Brockton at a disadvantage. The Committee discussed the applicability of previous cases appearing before it and the extent to which changes in market conditions and CAR rules might impact a decision on a similar case at this time. Several Committee members expressed concern about considering matters which had previously come before the Committee without the records of those meetings at their disposal and without time to compare the circumstances of the cases. Following further discussion, a motion was made by Mr. David Cochrane and seconded by Ms. Susan Scott to continue the matter to the next meeting. The motion passed with 11 in favor 3 opposed and 1 not participating Ace Insurance Agency/The Premier Insurance Company of Mass. The Ace Insurance Agency requested a review of the termination of its Exclusive Representative Producer appointment by The Premier Insurance Company of Mass. for violations of Rules 13, B, 3, g and 14, B, 1, k, Quote proper premiums based on information provided by the applicants for the coverage desired. Chairman Boynton advised that the parties have agreed to attempt to resolve the matter through a mediation effort with CAR and asked that the matter be continued until the Committee s next meeting. The Committee agreed to continue the matter until its next meeting Mazzucco Insurance Agency/Arbella Mutual Insurance Company The Mazzucco Insurance Agency, Inc., requested a review of the termination of its Exclusive Representative Producer appointment by the Arbella Mutual Insurance Company for violations of Rule 14, B, 1, b and i, Report all coverages bound and all registrations/titles certified to the Servicing Carrier within two working days after binding coverage or certifying a registration, and Properly order endorsements. Chairman Boynton advised that the parties had notified CAR that the appointment termination had been rescinded by Arbella and the agency had voluntarily withdrawn its Exclusive Representative Producer appointment. Accordingly, the request for review had been withdrawn by the agency.

6 Records of Meeting -6- March 4, White & Quinn Insurance Agency, Inc. Mr. Gilbert Quinn, representing the White and Quinn Insurance Agency, Inc., requested a reassignment of its commercial Exclusive Representative Producer appointment from the Acadia Insurance Company. The agency was appointed as an Exclusive Representative Producer for commercial automobile business in August, Acadia has chosen to vendor its commercial Servicing Carrier Exclusive Representative Producer responsibilities through the Pilgrim Insurance Company. Mr. David Cochrane indicated that he would not participate in the matter. Ms. Paula Gold indicated that she would not participate in the matter. As a courtesy to the parties, Mr. Sumner Gilman disclosed that he maintains a business relationship with Pilgrim Insurance Company through his premium finance company. He offered to withdraw form the matter if either party objected to his participation. Mr. John Kittel indicated that Arbella Mutual Insurance Company had a previous business relationship with the White and Quinn Insurance Agency and offered to withdraw from the matter. Ms. Susan Scott disclosed that The Travelers Indemnity Company had previously rejected the White and Quinn Insurance Agency as a voluntary agent and offered to withdraw from the matter. Neither party objected to Messrs. Gilman and Kittel, or Ms. Scott s participation in the matter. Agency principal, Gilbert Quinn, explained that his agency writes a substantial amount of large commercial automobile accounts, many of which require umbrella coverage to satisfy their contract requirements. Mr. Quinn explained that the Pilgrim Insurance Company, which provides vendor services for the Acadia Insurance Company, is not a rated insurer. Consequently, his agency has not been able to secure umbrella coverage due to the lack of rating by the underlying insurer, resulting in the loss of a significant portion of the agency s commercial automobile book of business. Mr. Quinn noted that the agency has forty accounts left to be placed through Pilgrim and thirty eight of them currently maintain umbrella coverage. Mr. Quinn requested that his agency be reassigned to an A or A+ rated commercial Servicing Carrier. The Committee discussed the provisions of CAR Rule 14 which provide for a change in Servicing Carrier and whether the specific business needs of this particular agency warranted a reassignment for reasonable business purposes. The Committee discussed umbrella coverage and whether it should be considered with respect to ERP appointments. While there was empathy expressed for the agency s situation and the loss of business, the majority of the Committee felt that umbrella coverage is voluntary in nature and a Servicing Carrier s ability to qualify for such coverage should not be a consideration in the appointment of ERPs. The Committee noted that insurance companies are not required to have an A rating or better in order to qualify for Servicing Carrier status. Following further discussion, a motion was made by Mr. Daniel Crimmins and seconded by Mr. Robert Cordner to deny the agency s request for a change in Servicing Carrier. The motion passed with 10 in favor, 3 opposed, and 2 not participating. Mr. Maher advised the parties of their rights pursuant to CAR Rule 20.

7 Records of Meeting -7- March 4, 2003 There being no further business, a motion was made by Mr. Sumner Gilman and seconded by Mr. Douglas Long to adjourn the meeting. The motion passed on a unanimous vote. The meeting adjourned at 10:40 a.m. ADRIANNE DONOVAN Senior Administrative Support Assistant Boston, Massachusetts March 28, 2003 Note: These Records have not been approved. They will be considered for approval at the next Market Review Committee meeting.