Fireman's Fund To Stay In Mass. Auto Market

In reaction Chris Goetcheus, speaking for the state's insurance division, said, "We think it's a good sign, a positive sign."

Robert Courtemanche, president of Fireman's Fund Personal Insurance, said over the past month the company had examined auto insurance reform proposals for the state and met with the Massachusetts insurance regulatory leadership.

He said the company "found a genuine reform commitment worthy of our support. As a result, we reassessed our position and decided to remain in the state for personal auto."

Mr. Courtemanche said after taking his present post in September, "I determined that the Massachusetts automobile market must become a top priority for action."

"As a result, our Fireman's Fund senior management team met with the Division of Insurance about projected efforts to reform an auto insurance situation in disarray.

We came away impressed with the state's commitment to the reform process. The state is taking a positive first step toward a more open and competitive marketplace benefiting consumers, carriers and agents."

He said the company is encouraged by the likelihood of reform of the state's residual market mechanism the Commonwealth Automobile Reinsurers Rules of Operation, and the resulting potential for Fireman's Funds' agents, employees and consumers.

"We are hopeful that reform will become reality. However, if reform does not occur, we reserve the right to reconsider our decision."

Fireman's Fund currently offers personal automobile insurance coverage to approximately 22,000 customers in Massachusetts representing less than 1 percent of the state's auto market.

Mr. Goetcheus said that Fireman's had been briefed by Kevin Beagan, state rating bureau director, about proposed residual market reforms which the division believes is a first step in bringing large and small carriers back into the marketplace.

He said the hope is to put regulations in place for a phased in change to an assigned risk pool system by the end of 2008.

Currently Massachusetts distributes high-risk drivers in blocks of involuntary agencies. Books of high-risk business are assigned to a carrier.

Mr. Goetcheus said, "Smaller carriers with involuntary agencies with high loss ratios have had a hard time making a go of it in this state, and national carriers don't want to expend capital to game a system."

Insurance Commissioner Julianne Bowler will hold a hearing Friday on a revised proposal for an assigned risk plan. The change by regulation has been approved by Massachusetts Attorney General Tom Reilly.

Meanwhile, Gov. Mitt Romney has a task force examining other possible changes for auto insurance laws. It is expected to report its findings in December.