Opponents of a new Massachusetts auto insurance residual market plan won a court stay just as some of the new rules were set to go into effect. In granting the injunction, Superior Court Judge Raymond J. Brassard found that plaintiffs including Commerce Insurance Co. and several agencies “demonstrated a reasonable likelihood of success” that they could win their case against a new plan.
The decision delayed implementation of the transformation of the residual auto insurance market organization, Commonwealth Auto Reinsurers, from a loss sharing to an assigned risk system called the Massachusetts Auto Insurance Plan. The injunction remains in effect until a court decides on the merits of the plaintiffs’ case against the MAIP. State officials have asked the Supreme Judicial Court to hear the full case as soon as possible.
Commerce Insurance and other plaintiffs have argued that Insurance Commissioner Julianne Bowler exceeded her authority in setting up the new MAIP and that the new rules violate certain laws including the state’s “take-all-comers” law requiring insurers to accept all risks. Arbella Mutual Insurance Co. has also joined the suit against the MAIP.
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