UNITED STATES
          SECURITIES AND EXCHANGE COMMISSION
                  Washington, D.C.  20549

                      FORM 8-K

                   CURRENT REPORT
      Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

                    Date of Report 
                       (Date of earliest event reported)
                  February 10, 2005

                THE COMMERCE GROUP, INC.
            (Exact name of registrant as specified in its charter)


Massachusetts             001-13672            04-2599931
(State or other                  (Commission File             (IRS Employer
  jurisdiction                       Number)                  Identification
  of incorporation)                                                   No.)


  211 Main Street, Webster, Massachusetts   01570
         (Address of principal executive offices)                   (Zip Code)


Registrant's telephone number, including area code: (508) 943-9000


Check the appropriate box below if the Form 8-K filing is intended to 
simultaneously satisfy the filing obligation of the registrant under 
any of the following provisions (see General Instruction A.2 below):

[ ]  Written communications pursuant to Rule 425 under the Securities  
     Act (17 CFR 230.425)

[ ]  Soliciting material pursuant to Rule 14a-12 under the Exchange  
     Act (17 CFR 240.14a-12)

[ ]  Pre-commencement communications pursuant to Rule 14d-2(b) under  
     the Exchange Act (17 CFR 240.14d-2(b))

[ ]  Pre-commencement communications pursuant to Rule 13e-4(c) under  
     the Exchange Act (17 CFR 240.14e-4(c))




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The Commerce Group, Inc.
Form 8-K
February 10, 2005

Section 2.  Financial Information
     Item 8.01  Other Events

On February 10, 2005, American Commerce Insurance Company 
("ACIC"), a subsidiary of The Commerce Group, Inc. ("the 
Company"), received notification from one of its agents, AAA 
Arizona, Inc., that it has entered into an affiliation with CSAA 
Inter-insurance Bureau ("CSAA").  AAA Arizona also has notified 
ACIC that it intends to stop writing new business with ACIC 
effective immediately, because of its CSAA affiliation, and 
indicated that it intends to transfer all existing business to 
CSAA.  The timeframe of the transfer of existing business has not 
been determined.

AAA Arizona was ACIC's largest agent in terms of direct and 
written premium produced, having generated $49.5 million and 
$47.7 million in direct written premium, representing 2.7% and 
2.9% of the Company's direct written premium for 2004 and 2003, 
respectively.

ACIC will continue to write business in Arizona but will no 
longer market its products through AAA Arizona.  Stock options 
that the Company granted to AAA Arizona for previous years' 
premium growth have been terminated.  These options, covering 
700,000 shares, had vesting dates from 2006 through 2009 and 
exercise prices ranging from $42.85 to $58.63 per share.  At 
December 31, 2004, the Company had accrued expenses of $3.5 
million related to these options, which will be recorded as 
income in the first quarter of 2005.




                           SIGNATURE


Pursuant to the requirements of the Securities Exchange Act of 
1934, the registrant has duly caused this report to be signed on 
its behalf by the undersigned hereunto duly authorized.

                           THE COMMERCE GROUP, INC.
                           February 10, 2005


                            /s/ Randall V. Becker
                                Randall V. Becker
                          Treasurer and Chief Accounting Officer

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