Attorney General Martha Coakley’s office has entered into a settlement with Occidental Fire and Casualty Insurance Co. of North Carolina, barring it from using a variety of unfair rating practices and company policies when underwriting automobile insurance policies in Massachusetts. 

In February, Occidental filed its rating plan with the commissioner of insurance to begin writing automobile insurance this year. 

"We have serious concerns regarding Occidental’s plan to write auto insurance policies in Massachusetts," said Coakley. "As the company is targeting urban drivers in those areas where other companies are pulling out, many inner-city Massachusetts drivers may purchase insurance from Occidental at prices greatly in excess of the fair cost of the insurance. This settlement is an important first step to ensure that Occidental consumers are treated fairly."

In March, the attorney general’s office called for an administrative rate hearing on Occidental’s filing before the commissioner of insurance. 

In its motion for a rate hearing, the attorney general’s office said it argued that the proposed rates were excessive and unjustified, and also violated a variety of Massachusetts statutes. 

While agreeing to hear the issue on the excessiveness of the rates, the commissioner of insurance said she could not act to prevent the company from using illegal practices in its rating policies, which she claimed was beyond her authority. 

In light of the Commissioner’s decision, the attorney general’s office used its authority under the Consumer Protection Act to stop the illegal practices.