Met P&C Overcharges Open Broader Investigation in Mass.

Massachusetts investigators will take a wide look at the state’s auto insurers and refunds they owe their customers after Metropolitan Property & Casualty (Met P&C) settled a case with the state attorney general over allegedly failing to repay auto policyholders for nullified surcharges.

Met P&C is one of the biggest providers of auto insurance in Massachusetts, tied for the sixth-largest share of the market in 2010, according to a report from the state Division of Insurance.

The settlement was announced Tuesday for an unspecified amount that is being determined by audit, according to Martha Coakley, the state’s attorney general, who said that a complaint submitted by a consumer tipped investigators to the violation.

That consumer contested a surcharge to the state Board of Appeal in 2010 that was eventually “vacated,” or otherwise erased from records. State law mandates that surcharges ruled vacated by appeals lead to insurers’ refunding surcharge premiums to policyholders, according to Coakley.

However, the attorney general’s investigation found that Met P&C left more than $700 in surcharge premiums unpaid to that customer.

The ensuing investigation resulted in a settlement filed in Suffolk Superior Court last week, when Met P&C agreed to the audit and financial penalties. Those include a $50,000 penalty in addition to any amounts due to consumers that are uncovered by the audit; restitution amounts will include a 6 percent interest surcharge.

“While we are troubled that these overcharges occurred, we are pleased that we were able to stop this unlawful practice and protect consumers,” Coakley said in a statement.

According to the attorney general’s office, not all policyholders involved in Board of Appeal cases where their surcharges were vacated will see refunds. Investigators will be trying to identify similar violations at other carriers of Massachusetts auto insurance and ask policyholders who believe they were involved in similar situations to call state investigators at 1-888-830-6277.

About Charles Nguyen
Charles Nguyen is an enterprising journalist who reported for and the Desert Dispatch and was the editor in chief of the Guardian (the twice-weekly newspaper at the University of California, San Diego) before coming to Online Auto Insurance News.

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