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The Commerce Insurance Company Asks Court to Review New Massachusetts Residual Market Rules

WEBSTER, Mass.--Jan. 5, 2005--The Commerce Insurance Company, a wholly owned subsidiary of The Commerce Group, Inc. , filed an action today in Massachusetts Superior Court, Suffolk County, in response to the new rules published by the Division of Insurance for the automobile residual market system. Commerce is asking the Court to determine whether the new rules are consistent with longstanding Massachusetts laws.

Commerce has been active throughout the development of this residual market reform by testifying at each of the Division's three public hearings and submitting proposed rule amendments for consideration by the Division. In response, the Division made many fundamental changes to the reform since first publishing its proposal last April. While those revisions addressed some of the Company's concerns, Commerce is asking the Court to resolve a number of serious legal issues that arise from specific aspects of the new system.

The Commerce Insurance Company, which is rated A+ (Superior) by A.M. Best, is the principal operating subsidiary of The Commerce Group, Inc. headquartered in Webster, Massachusetts. Additional property and casualty insurance subsidiaries include Citation Insurance Company in Massachusetts, Commerce West Insurance Company in California and American Commerce Insurance Company in Ohio. Through its subsidiaries' combined insurance activities, Commerce Group is ranked as the 20th largest personal automobile insurance group in the country by A.M. Best, based on 2003 direct written premium information.