Insurance Rating Bd. v. Commissioner of Ins.

• Decision Date: 06 June 1969
• Citation: 356 Mass. 184,248 N.E.2d 500
• Parties: INSURANCE RATING BOARD et al. v. COMMISSIONER OF INSURANCE.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 500

248 N.E.2d 500

356 Mass. 184

INSURANCE RATING BOARD et al. v. COMMISSIONER OF INSURANCE.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 8, 1969.

Decided June 6, 1969.

Herbert P. Wilkins, Boston, (George M. Hughes, Boston, with him) for Insurance Rating Bd. and others.

Allan G. Rodgers, Sp. Asst. Atty. Gen., for Comr. of Ins.

Nathan S. Paven, Boston, for American Trial Lawyers Assn., Massachusetts Chapter, Inc., amicus curiae, submitted a brief.

Before SPALDING, WHITTEMORE, CUTTER, SPIEGEL and REARDON, JJ.

SPIEGEL, Justice.

These are proceedings brought by the Insurance Rating Board (board), the Mutual Insurance Rating Bureau (bureau) and several insurance companies to determine whether the Commissioner of Insurance (commissioner) had authority to 'freeze' certain automobile insurance rates. One is a suit for declaratory relief. The other two proceedings are under G.L. c. 175, § 113B, and G.L. c. 175A, § 19. The proceedings were reserved and reported by the single justice without decision upon the pleadings and a statement of agreed facts.

The board and the bureau are associations of insurance companies. They are rating organizations licensed under G.L. c. 175A to file rates with the commissioner, on behalf of their members and subscribers, for various kinds of insurance, including automobile property damage liability insurance. ¹ They have in the past made 'rate filings' for automobile property damage liability insurance.

Statute 1968, c. 643, was approved on July 16, 1968. Section 2A of that act directed the commissioner to 'fix and establish the same classifications of risks and the same basic premium charges or lesser charges * * * in connection with the issue or execution of motor vehicle liability policies or bonds, both as defined in * * * (G.L. c. 90, § 34A) as he fixed and established * * * for * * * (1967).' Section 3 of the act amended G.L. c. 175, 113C, to require insurance companies authorized to issue compulsory bodily injury liability coverage policies or bonds 'to issue to any person purchasing such policy or bond, at his option, additional coverage * * * of property damage, so called, to a limit of at least five thousand dollars. The rates for such additional coverage shall be subject to the approval of the commissioner, under the provisions of * * * (§ 113B).' ²

On October 14, 1968, the effective date of St.1968, c. 643, the board and the bureau 'made * * * rule filing(s) covering the rating of the additional property damage liability coverage described in G.L. c. 175, § 113C, as amended by St.1968, c. 643, § 3.' The rating rules provided that the rates for such coverage would be the rates shown in the 'Massachusetts Automobile Property Damage Manual.' These filings were approved by the commissioner and were effective as of October 14, 1968.

On November 25, 1968, the commissioner filed in his office a 'Memorandum in Regard to Classifications of Risks and Schedule of Permium Charges for Motor Vehicle Liability Policies or Bonds as Defined in * * * (G.L. c. 90, § 34A) for the Year 1969, and Property Damage Liability * * * Coverage.' The commissioner purported to 'establish and promulgate' for 1969 the classifications of risks, premium charges and rules and regulations applicable to 'motor vehicle liability policies or bonds' as defined in G.L. c. 90, § 34A, which were in effect for 1967. He also purported to 'establish, reaffirm and approve' for 1969 the classifications of risks, premium charges and rules and regulations applicable to automobile property damage liability insurance (as defined by G.L. c. 175, § 113C, as amended by St.1968, c. 643, § 3) which were in effect for 1967.

On December 26, 1968, the board and the bureau each delivered to the commissioner purported filings regarding automobile property damage liability insurance. Each filed separately under G.L. c. 175A and under G.L. c. 175, § 113C. The commissioner returned the documents, stating that they were 'inconsistent with * * * (his) Memorandum and Order of November 25, 1968.'

1. The commissioner contends that the rate 'freeze' provision of St.1968, c. 643, § 2A, applies to automobile property damage liability insurance. He argues that the Legislature, when it used the words 'policies or bonds' as opposed to 'coverage' (compare St.1968, c. 643, § 2A with St.1968, c. 643, § 3) intended the words 'policies or bonds' to include all coverages contained in policies or bonds which contain the compulsory bodily injury liability coverage, and not just the compulsory bodily injury liability coverage. He assigns a similar meaning to the same words in G.L. c. 175, § 113B, and asserts that under that section, prior to the passage of c. 643, 'he had the power theoretically' to fix and establish the rates for all coverages included with the compulsory bodily injury liability coverage in a single policy or bond.

We think that the words must be limited to the compulsory bodily injury liability coverage under G.L. c. 90, § 34A. In Benoit v. Fisher, 341 Mass. 386, 388, 169 N.E.2d 905, this court stated that the requirements of G.L. c. 175, § 113A(2), did not apply to property damage coverage. Similarly in Lodge v. Bern, 328 Mass. 42, 43--44, 101 N.E.2d 748, 749, the provision of G.L. c. 175, § 113A, which forbids exceptions or exclusions from the compulsory coverage was said to have 'no application to the coverage in excess of the required $5,000.' In both cases, this court limited the words 'motor vehicle liability policy as defined in * * * (G.L. c. 90, § 34A)' as they appear in § 113A to the compulsory bodily injury liability coverage. See also Macheras v. Syrmopoulos, 319 Mass. 485, 486--487, 66 N.E.2d 351, 2 A.L.R.2d 511. The words there are essentially the same words as the Legislature used in St.1968, c. 643, § 2A, and G.L. c. 175, § 113B, as amended by St.1968, c. 643, § 2. Where the Legislature uses the same words in several sections which concern the same subject matter, the words 'must be presumed to have been used with the same meaning in each section.' Liddell v. Standard Acc. Ins. Co., 283 Mass. 340, 346, 187 N.E. 39, 42. The commissioner was neither required nor authorized by St.1968, c. 643, § 2A, to 'freeze' the automobile property damage liability insurance rates.

2. General Laws c. 175, § 113C, as amended by St.1968, c. 643, § 3 requires the insurance companies 'to issue to any person purchasing * * * (compulsory bodily injury liability coverage), at his option, additional coverage * * * of property damage * * *.' The board and the bureau contend that § 113C does not apply to everyone who purchase the automobile property damage liability coverage. Apparently focusing on the words 'at his option,' they argue that if the insurance company willingly offers the insured the automobile property damage liability coverage, 'no statutory compulsion is needed, no option is exercised, and the rates for such additional coverage are governed by G.L. c. 175A.'

We do not agree. The board and the bureau admit that the class of risks to which they argue § 113C applies is quite small and may, in fact, be nonexistent. We think that if their interpretation of the section were adopted, the class would be nonexistent, for then an insurance company would need only to always 'voluntarily' offer such coverage to all persons purchasing the compulsory bodily injury liability coverage in order to avoid the rates requiring the commissioner's prior approval under §§ 113B and 113C. An intention to enact a barren and ineffective provision is not lightly to be imputed to the Legislature. Allen v. Cambridge, 316 Mass. 351, 55 N.E.2d 925. Selectmen of Topsfield v. State Racing Commn., 324 Mass. 309, 86 N.E.2d 65. We believe that the words 'at his option' signify nothing more than a desire by the Legislature to make clear that, although the insurance companies issuing compulsory bodily injury liability coverage are required to offer certain automobile property damage liability coverage, the insured is not required to purchase it. We conclude that the Legislature intended the provisions of G.L. c. 175, § 113C, as amended by St.1968, c. 643, § 3, to apply to all policies and bonds containing the compulsory bodily injury liability coverage to the extent set out in part 3 of this opinion.

3. The board and the bureau contend that this interpretation of § 113C 'is unconstitutional because it makes unreasonable distinctions among insurance companies writing automobile property damage liability insurance.' The distinction, however, is not a distinction between insurance companies but a distinction as to insurance policies. Section 113C requires companies issuing policies or bonds containing the compulsory bodily injury liability coverage to offer in the same policies or bonds certain optional coverage. It also requires that the rates for 'such additional coverage,' the optional automobile property damage liability coverage included with the compulsory bodily injury liability coverage, be approved by the commissioner. It does not prohibit insurance companies which issue policies or bonds containing the compulsory bodily injury liability coverage from offering, independent of the compulsory bodily injury liability coverage, automobile property damage liability insurance. Nor does it make the rates for such independent automobile property damage liability insurance or the rates for automobile property damage liability coverage in excess of the required amount subject to the approval of the commissioner. General Laws c. 175, § 113C, applies only to automobile property damage liability insurance up to and including $5,000 which is offered in conjunction with the compulsory bodily injury liability coverage. The companies issuing policies or bonds that include the compulsory bodily injury liability coverage are free to file under G.L. c. 175A with regard to the excess or independent automobile property damage liability...