1. Forms
2. MM
3. MM-99-23

What the form is

The MM 99 23 Rate Modification – Massachusetts endorsement is a state-specific form used in Massachusetts for commercial automobile insurance policies. Its primary purpose is to allow an insurer to adjust the policy premium by applying a specific debit or credit. This modification is typically based on unique risk characteristics of the insured that are not adequately contemplated in the standard rating manual or base rates. It provides a mechanism for insurers to tailor pricing more accurately to an individual risk's exposure.

Classes of business it applies to

This endorsement applies to commercial automobile insurance policies issued in Massachusetts. It can be used across various classes of business that have commercial auto exposures, provided the insurer has an approved rating plan that allows for such modifications. Examples include:

• Businesses with unique fleet characteristics or usage (e.g., highly specialized vehicles, unusual operating territories within MA).
• Companies with exceptionally good or poor loss experience that warrants a deviation from standard rates, subject to regulatory guidelines.
• Insureds with specific risk management programs or lack thereof that significantly impact their risk profile. For instance, a trucking company with an advanced telematics and driver safety program might receive a credit, while one with a poor vehicle maintenance record might receive a debit.

Special considerations

Key considerations for the MM 99 23 include:

• State Specific: This endorsement is designed exclusively for use in Massachusetts and must comply with the regulations set forth by the Massachusetts Division of Insurance.
• Justification Required: Any rate modification applied using this form must be justified and documented by the insurer. The reasons for the debit or credit should be clearly stated and based on objective criteria.
• Non-Discriminatory Application: Insurers must apply rate modifications in a fair and non-discriminatory manner, consistent with their filed rating plans.
• Not a Standard Discount: This is not a standard discount or surcharge that applies to all policyholders. It is a specific modification based on individual risk assessment.

Key information for agents and underwriters

For Agents:

• Agents should understand the specific circumstances under which their appointing insurers will use this endorsement.
• It's crucial to clearly communicate the reason for any rate modification to the insured, explaining how their specific risk characteristics have led to the adjustment in premium.
• Ensure all necessary documentation supporting the modification is collected and maintained.

For Underwriters:

• Underwriters must have a thorough understanding of the insurer's filed rating plan and the permissible range and criteria for rate modifications in Massachusetts.
• Detailed underwriting notes are essential to support the application of MM 99 23, outlining the specific risk factors (e.g., management quality, condition of equipment, unique operational hazards, loss history trends) that warrant the modification.
• Risk assessment should be comprehensive to determine if a standard rate is inadequate or excessive for the specific exposure presented by the insured.
• Ensure compliance with all state regulations regarding the application of discretionary rate adjustments to avoid potential market conduct issues. The edition date of 03 24 suggests this form is actively maintained for current use. An older edition date of 09 98 also exists.