The Metropolitan Property and Casualty (P&C) Insurance has agreed to compensate $395,000 to settle the charges levied against unfair termination of 2,600 auto insurance policies in Massachusetts, US.

The company was charged with breaching of "clean-in-three" rule, according to which insurers cannot refrain from renewing policies of drivers, who for the past three years have not met with an accident or violated traffic regulations.

Commenting on the resolve, the company stated that the settlement was reached after having "worked closely with Massachusetts officials on this issue."

The state attorney general Martha Coakley’s office had revealed that Met P&C agreed to pay 56 consumers nearly $35,000 in compensation, or $620 each, as per the agreement filed in Suffolk Superior Court.

The 56 consumers’ policies were terminated and assigned to the state’s high-risk insurance pool.

Another $50,000 will be paid to the state and $310,000, or $120 each, to nearly 2,600 other policyholders, who were not renewed and have sought help from other insurance companies to provide coverage for them.

In 2010, Met P&C , which also does business as MetLife Auto & Home, had 5.1% of the auto insurance market and was the seventh largest insurer in the state, according to the Division of Insurance.

Met P&C’s parent company, MetLife of New York, manages 90 million customers through insurance, annuities and employee benefits programs.