HOUSE DOCKET, NO. 1915        FILED ON: 1/19/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 493

The Commonwealth of Massachusetts

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PRESENTED BY:

Antonio F. D. Cabral

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To the Honorable Senate and House of Representatives of the Commonwealth of Massachusetts in General
Court assembled:

The undersigned legislators and/or citizens respectfully petition for the adoption of the accompanying bill:

An Act to require notice of auto insurance changes and insurance coverage.

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PETITION OF:

HOUSE DOCKET, NO. 1915        FILED ON: 1/19/2017

HOUSE  .  .  .  .  .  .  .  .  .  .  .  .  .  .  .  No. 493

The Commonwealth of Massachusetts

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In the One Hundred and Ninetieth General Court
(2017-2018)

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An Act to require notice of auto insurance changes and insurance coverage.

Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
 

Chapter 175 of the General Laws is hereby amended by inserting after section 225, the following section:-

Section 226. Notice Required for Auto Insurance Premium Changes and Insurance Coverage Changes.

(a)Notwithstanding any General Law or special law to the contrary, at least 45 days prior to the expiration date of the policy, an insurer shall provide written notice to the first-named insured at the mailing address shown on the policy and to the insurance producer of record. Said written notice shall include—

(1)any premium increase in excess of 15 per cent; and

(2)the exact renewal premium.

(b)Subsection (a) shall not apply to any premium increase that is the result of an audit or the result of an increase in exposure at the request of the insured.

(c)Notice Requirements.

(1)An insurer shall provide notice, as described in subsection (a), not less than 45 days following any coverage elimination, reduction, diminution or increased deductible not at the request of the insured.

(2)Notice, as described in subsection (a), shall itemize and describe the coverage changes and shall be separate from the renewal policy.

(3)If the insurer fails to provide such notice, as described in subsection (a), the coverage provided to the named insured shall remain in effect until notice is provided or until the effective date of replacement coverage obtained by the named insured, whichever occurs first.

(4)For the purposes of this section, notice, as described in subsection (a), is considered provided 45 days following date of giving of notice.

(d)If the named insured elects not to renew, any earned premium for the period of extension of the terminated policy shall be calculated pro-rata at the lower of the current or previous year’s rate.  If the insured accepts the renewal, the premium increase, if any, and other changes shall be effective the day following the prior policy’s expiration or anniversary date.  The provisions of this section shall only apply to policies issued to commercial policyholders.

(e)This section shall not apply to changes based upon the altered nature or extent of the risk insured.

(f)For purposes of this section, notice to the insurance producer of record shall not apply to an insurance producer of record who is—

(1)an employee of the insurer; or

(2)a non-employee exclusive agent of the insurer; provided, however, notice as required by this section, shall in all applicable cases, be provided to the named insured.