Section 97.05 - Return Premium Applicable to Cancelled Motor Vehicle Insurance Policies(1) If premium payments have been made on a Motor Vehicle Insurance Policy which is cancelled, the Policyholder may be entitled to the return of premium paid for the unexpired term of that policy. Return premium, if any, shall be determined based on the rates in effect for the Insurer on the date the cancelled Motor Vehicle Insurance Policy first became effective.(2) An Insurer that cancels a Motor Vehicle Insurance Policy shall calculate return premium on a pro rata basis as of the intended effective date of Cancellation, or the date upon which a new certificate of insurance is filed with the Registrar of Motor Vehicles covering the same vehicle that was insured under the cancelled policy, if the effective date of the new Motor Vehicle Insurance Policy is prior to the intended Cancellation date of the cancelled Motor Vehicle Insurance Policy. Any return premium associated with the unexpired portion of the term of the cancelled Motor Vehicle Insurance Policy shall be delivered to the Policyholder within 30 days of the effective date of Cancellation of that policy.(3) If a Motor Vehicle Insurance Policy that an Insurer cancelled is reinstated by the Board of Appeal or by order of a court in any legal proceeding that the Policyholder initiated relating to the Cancellation, any return premium shall be calculated based on the rates in effect when the cancelled Motor Vehicle Insurance Policy first became effective.(4) If a Policyholder cancels a Motor Vehicle Insurance Policy, return premium, if any, shall reflect the unexpired portion of the term of the cancelled policy, pro rata, in any of the following circumstances: (a) The Policyholder cancels the Motor Vehicle Insurance Policy within the first 30 days from the date on which the policy becomes effective or the date on which the Policyholder receives the policy documents, whichever is later;(b) The Policyholder cancels the Motor Vehicle Insurance Policy within 30 days after the date on which the insured motor vehicle is stolen or destroyed, if the loss to the motor vehicle is a total loss or total constructive loss. The return premium, if any, shall be calculated from the day following the date of loss;(c) The Policyholder cancels the Motor Vehicle Insurance Policy because of entry into the military service of the United States of America; or(d) The Policyholder cancels a Motor Vehicle Insurance Policy issued through the Massachusetts residual market plan because coverage has been obtained in the voluntary market. The return premium, if any, shall be calculated from the effective date of the Motor Vehicle Insurance Policy that replaces the policy issued through the residual market plan. Nothing precludes an Insurer from identifying other circumstances in which it will calculate the return premium to the Policyholder on a pro rata basis without short rate adjustments.
(5) In all other cases, if the Policyholder cancels a Motor Vehicle Insurance Policy the Insurer may reduce the otherwise calculated return premium in accordance with any short rate adjustments contained in the Insurer's motor vehicle insurance rate manual filed with the Commissioner and in effect on the date the policy became effective.(6) If a Motor Vehicle Insurance Policy terminates by operation of law, return premium, if any, is calculated based on the date of such automatic termination, regardless of any other intended date of Cancellation proposed by the Insurer or the Policyholder. A Motor Vehicle Insurance Policy terminates by operation of law in any of the following circumstances: (a) Another Insurer files with the Registrar of Motor Vehicles a certificate of insurance covering the same motor vehicle or trailer covered by the terminating policy. The date of termination is the date on which a new certificate of insurance filed with the Registrar of Motor Vehicles becomes effective;(b) The owner of the motor vehicle or trailer sells or transfers title. The date of termination is 30 days after such sale or transfer unless the owner, within that 30 day period, transfers the registration of the motor vehicle or trailer to a replacement motor vehicle or trailer; or(c) The owner of the motor vehicle or trailer surrenders the registration plates issued by the Registrar of Motor Vehicles for the motor vehicle or trailer to the Registrar of Motor Vehicles, along with a written statement, in such form as the Registrar of Motor Vehicles may require, indicating that such registration plates are being surrendered to cancel the registration of the motor vehicle or trailer, as well as the Motor Vehicle Insurance Policy covering such motor vehicle or trailer. If the registration plates have been lost or stolen, the owner of the motor vehicle or trailer may cancel the registration of the motor vehicle or trailer by filing a lost plate affidavit with the Registrar of Motor Vehicles in accordance with procedures prescribed by the Registrar.(7) When a Motor Vehicle Insurance Policy terminates by operation of law, the return premium, if any, may be reduced in accordance with any short rate adjustments contained in the Insurer's motor vehicle insurance rate manual filed with the Commissioner and in effect on the date the policy became effective.