Cape legislators support FAIR Plan rate reduction
Cape legislators, including Rep. Eric Turkington and Sen. Robert O'Leary, filed a legal brief with the state Supreme Judicial Court in support of Attorney General Martha Coakley's argument that a 25 percent rate increase for the Fair Access to Insurance Requirements (FAIR) Plan should be overturned.
In 1968, the Commonwealth established the Fair Access to Insurance Requirements (FAIR) Plan, funded collectively by insurers throughout the state, to offer homeowners insurance to those who could not get coverage from other providers.
Although intended to serve as a temporary program for urban and coastal homeowners in Massachusetts, the FAIR Plan became the only insurance option for many on the Cape and Islands, especially over the last few years.
The Massachusetts Property Insurance Underwriting Association (MPIUA), which administers the FAIR Plan, operates as an independent company. For the second time in less than a year, the association is requesting approval by July 1 from the state insurance commissioner for a rate hike, with the Cape and islands, New Bedford and most of Plymouth county slated for a 25 percent increase.
Last year's rate increase, approved by ex-commissioner Julianne Bowler, was appealed by Attorney General Martha Coakley and is undergoing review by the state Supreme Judicial Court. Ms. Coakley's argument is that Ms. Bowler exceeded her legal authority when she approved the rate increase.
Mr. Turkington stated in a June 21 press release that the FAIR Plan's requested rate increase was not based on claims or expected claims, and represented an attempt to keep up with the private insurance market.
"The FAIR Plan's legislative mandate is 'to make basic property insurance available at reasonable prices to eligible applicants' in areas that private insurance carriers have abandoned," Mr. Turkington wrote. "The Attorney General and the Cape delegation intend to see that this legislative mandate is carried out," he concluded.