MD
Maryland House Bill HB1421

Maryland 2022 Regular Session

Maryland House Bill HB1421 Compare Versions

Only one version of the bill is available at this time.
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33 EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW .
44 [Brackets] indicate matter deleted from existing law.
55 *hb1421*
66
77 HOUSE BILL 1421
88 C4 2lr3115
99 HB 660/20 – ECM
1010 By: Delegate Bridges
1111 Introduced and read first time: February 17, 2022
1212 Assigned to: Rules and Executive Nominations
1313
1414 A BILL ENTITLED
1515
1616 AN ACT concerning 1
1717
1818 Baltimore City – Lifeline Low–Cost Automobile Insurance Program 2
1919
2020 FOR the purpose of establishing the Lifeline Low–Cost Automobile Insurance Program to 3
2121 offer low–cost automobile insurance policies to residents of Baltimore City; 4
2222 establishing that the Program is part of the Maryland Automobile Insurance Fund; 5
2323 establishing eligibility, coverage, security, and premium requirements; establishing 6
2424 the authority of the Program regarding rejection of applicants and cancellations and 7
2525 nonrenewals of policies; requiring insurers licensed to write motor vehicle liability 8
2626 insurance or motor vehicle physical damage insurance to pay a certain annual fee to 9
2727 support Program public awareness efforts; and generally relating to the Lifeline 10
2828 Low–Cost Automobile Insurance Program for residents of Baltimore City. 11
2929
3030 BY repealing and reenacting, with amendments, 12
3131 Article – Insurance 13
3232 Section 20–301 14
3333 Annotated Code of Maryland 15
3434 (2017 Replacement Volume and 2021 Supplement) 16
3535
3636 BY adding to 17
3737 Article – Insurance 18
3838 Section 20–6A–01 through 20–6A–10 to be under the new subtitle “Subtitle 6A. 19
3939 Lifeline Low–Cost Automobile Insurance Program” 20
4040 Annotated Code of Maryland 21
4141 (2017 Replacement Volume and 2021 Supplement) 22
4242
4343 SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 23
4444 That the Laws of Maryland read as follows: 24
4545
4646 Article – Insurance 25
4747
4848 20–301. 26 2 HOUSE BILL 1421
4949
5050
5151
5252 (a) The purpose of the Fund is to provide the financial security required under § 1
5353 17–103 of the Transportation Article to: 2
5454
5555 (1) those eligible persons that are unable to obtain it from an Association 3
5656 member; AND 4
5757
5858 (2) ELIGIBLE INDIVIDUALS UNDER THE LIFELINE LOW–COST 5
5959 AUTOMOBILE INSURANCE PROGRAM ESTA BLISHED UNDER SUBTITLE 6A OF THIS 6
6060 TITLE. 7
6161
6262 (b) Money of the Fund consists of revenues, premiums, and other receipts 8
6363 provided by law. 9
6464
6565 (c) (1) All operating expenses of the Fund shall be paid from the money 10
6666 collected by or for the Fund. 11
6767
6868 (2) (i) Subject to subparagraphs (ii) through (iv) of this paragraph, 12
6969 money and property available to the Fund may be used for the general purposes of the 13
7070 Fund. 14
7171
7272 (ii) Premiums collected and income accruing from those premiums 15
7373 may be used only for the payment of claims arising under policies issued by the Fund and 16
7474 for the administrative expenses of the Fund. 17
7575
7676 (iii) The Fund shall keep separate records of any income and 18
7777 expenses directly attributable to the Uninsured Division, including the processing and 19
7878 payment of unsatisfied claims under Subtitle 6 of this title. 20
7979
8080 (iv) The Fund shall keep separate records of any income and 21
8181 expenses directly attributable to its commercial policy and claims operations. 22
8282
8383 SUBTITLE 6A. LIFELINE LOW–COST AUTOMOBILE INSURANCE PROGRAM. 23
8484
8585 20–6A–01. 24
8686
8787 (A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 25
8888 INDICATED. 26
8989
9090 (B) “POLICY” MEANS A LOW –COST AUTOMOBILE INSU RANCE POLICY 27
9191 ISSUED UNDER THIS SU BTITLE BY THE PROGRAM. 28
9292
9393 (C) “PROGRAM” MEANS THE LIFELINE LOW–COST AUTOMOBILE 29
9494 INSURANCE PROGRAM. 30
9595 HOUSE BILL 1421 3
9696
9797
9898 20–6A–02. 1
9999
100100 (A) THERE IS A LIFELINE LOW–COST AUTOMOBILE INSURANCE PROGRAM. 2
101101
102102 (B) THE PURPOSE OF THE PROGRAM IS TO OFFER L OW–COST AUTOMOBILE 3
103103 INSURANCE POLICIES T O RESIDENTS OF BALTIMORE CITY IN ACCORDANCE WI TH 4
104104 THIS SUBTITLE. 5
105105
106106 (C) (1) THE PROGRAM IS PART OF THE FUND. 6
107107
108108 (2) THE PROGRAM SHALL BE ADMI NISTERED IN THE SAME MANNER 7
109109 AS THE FUND. 8
110110
111111 (D) THE PROGRAM SHALL BE DEVE LOPED IN CONSULTATIO N WITH THE 9
112112 ADMINISTRATION . 10
113113
114114 20–6A–03. 11
115115
116116 (A) ON RECEIPT OF THE PRE MIUM SET BY THE FUND, THE PROGRAM SHALL 12
117117 SELL, ISSUE, AND DELIVER A POLICY THAT PROVIDES THE SE CURITY REQUIRED 13
118118 UNDER § 17–103 OF THE TRANSPORTATION ARTICLE TO AN INDIVID UAL WHO MEETS 14
119119 THE REQUIREMENTS OF THIS SECTION. 15
120120
121121 (B) TO BE ELIGIBLE FOR A POLICY ISSUED UNDER THIS SUBTITLE, AN 16
122122 INDIVIDUAL: 17
123123
124124 (1) MUST OWN, LEASE, OR RENT A PRIMARY PL ACE OF RESIDENCE IN 18
125125 BALTIMORE CITY, OR OTHERWISE DEMONST RATE THAT THE INDIVI DUAL’S 19
126126 PRIMARY PLACE OF RES IDENCE IS IN BALTIMORE CITY; 20
127127
128128 (2) MUST HAVE FILED AS A STATE RESIDENT FOR IN COME TAX 21
129129 PURPOSES, IF REQUIRED BY LAW ; 22
130130
131131 (3) MUST BE IN A HOUSEHO LD WITH A GROSS ANNU AL HOUSEHOLD 23
132132 INCOME THAT DOES NOT EXCEED 300% OF THE FEDERAL POVER TY LEVEL; 24
133133
134134 (4) MUST BE AT LEAST 19 YEARS OLD AND HAVE B EEN CONTINUOUSLY 25
135135 LICENSED TO DRIVE AN AUTOMOBILE FOR THE I MMEDIATELY PRECEDING 3 YEARS; 26
136136
137137 (5) MAY NOT HAVE MORE TH AN ONE OF EITHER , BUT NOT BOTH , OF 27
138138 THE FOLLOWING WITHIN THE IMMEDIATELY PREC EDING 3 YEARS: 28
139139
140140 (I) A PROPERTY –DAMAGE–ONLY ACCIDENT IN WHI CH THE 29 4 HOUSE BILL 1421
141141
142142
143143 DRIVER WAS PRINCIPAL LY AT FAULT; OR 1
144144
145145 (II) A POINT FOR A MOVING VIOLATION; 2
146146
147147 (6) MAY NOT HAVE ON RECORD W ITHIN THE IMMEDIATEL Y 3
148148 PRECEDING 3 YEARS AN AT–FAULT ACCIDENT INVOL VING BODILY INJURY O R 4
149149 DEATH; AND 5
150150
151151 (7) MAY NOT HAVE A FELON Y OR MISDEMEANOR CON VICTION FOR A 6
152152 VIOLATION OF THE MOT OR VEHICLE LAWS OTHE R THAN FOR A VIOLATI ON OF § 7
153153 17–107 OF THE TRANSPORTATION ARTICLE. 8
154154
155155 (C) (1) THE ELIGIBILITY OF AN APPLICANT FOR INSURA NCE FROM THE 9
156156 PROGRAM SHALL BE CERT IFIED AT A TIME AND IN A MANNER APPROVED BY THE 10
157157 PROGRAM. 11
158158
159159 (2) (I) IN ESTABLISHING ACCEP TABLE METHODS THAT 12
160160 DEMONSTRATE THE ELIG IBILITY OF INDIVIDUALS UNDER SUBSECTION (B)(3) OF 13
161161 THIS SECTION, THE PROGRAM SHALL DETERMI NE METHODS THAT ARE THE LEAST 14
162162 CUMBERSOME METHODS A VAILABLE. 15
163163
164164 (II) TO BE ELIGIBLE TO REN EW A POLICY ISSUED U NDER THIS 16
165165 SUBTITLE, AN INDIVIDUAL SHALL DEMONSTRATE ELIGIBIL ITY UNDER SUBSECTION 17
166166 (B)(3) OF THIS SECTION AT L EAST ONCE EVERY 3 YEARS. 18
167167
168168 (D) AS SOON AS PRACTICABL E, THE PROGRAM SHALL ALLOW A N APPLICANT 19
169169 TO DEMONSTRATE ELIGI BILITY FOR THE PROGRAM AND PURCHASE A POLICY 20
170170 ISSUED BY THE PROGRAM ONLINE . 21
171171
172172 20–6A–04. 22
173173
174174 (A) EXCEPT AS OTHERWISE PROV IDED IN THIS SECTION , EACH POLICY 23
175175 ISSUED BY THE PROGRAM SHALL CONTAIN THE MINIMUM COVERAGE S REQUIRED 24
176176 UNDER TITLE 19, SUBTITLE 5 OF THIS ARTICLE. 25
177177
178178 (B) EACH POLICY ISSUED BY THE PROGRAM MAY PROVIDE C OVERAGE ONLY 26
179179 FOR AN AUTOMOBILE WI TH A VALUE OF $25,000 OR LESS AT THE TIME OF 27
180180 APPLICATION, AS EVIDENCED BY THE VALUE GIVEN TO THE A UTOMOBILE BY THE 28
181181 MOTOR VEHICLE ADMINISTRATION IN ASS ESSING VEHICLE LICEN SE FEES. 29
182182
183183 (C) (1) EXCEPT AS OTHERWISE P ROVIDED IN THIS SECT ION, EACH 30
184184 POLICY ISSUED BY THE PROGRAM MAY PROVIDE O NLY FOR: 31
185185
186186 (I) THE PAYMENT OF CLAIM S FOR BODILY INJURY OR DEATH 32 HOUSE BILL 1421 5
187187
188188
189189 ARISING FROM AN ACCI DENT OF UP TO $15,000 FOR ANY ONE PERSON A ND UP TO 1
190190 $30,000 FOR ANY TWO OR MORE PERSONS, IN ADDITION TO INTER EST AND COSTS; 2
191191 AND 3
192192
193193 (II) THE PAYMENT O F CLAIMS FOR PROPERT Y OF OTHERS 4
194194 DAMAGED OR DESTROYED IN AN ACCIDENT OF UP TO $7,500, IN ADDITION TO 5
195195 INTEREST AND COSTS . 6
196196
197197 (2) NOTWITHSTANDING ANY O THER PROVISION OF TH IS ARTICLE, A 7
198198 POLICY ISSUED BY THE PROGRAM SHALL SATISFY THE MINIMUM SECURITY 8
199199 REQUIRED B Y § 17–103 OF THE TRANSPORTATION ARTICLE. 9
200200
201201 (D) THE PROGRAM SHALL OFFER A N APPLICANT WHO PURC HASES A POLICY 10
202202 ISSUED BY THE PROGRAM THE OPTION TO PURCHASE THE FOLLOWI NG ADDITIONAL 11
203203 COVERAGES: 12
204204
205205 (1) UNINSURED MOTORIST C OVERAGE OR UNDERINSU RED MOTORIST 13
206206 COVERAGE; 14
207207
208208 (2) PERSONAL INJURY PROT ECTION COVERAGE ; OR 15
209209
210210 (3) ANY OTHER COVERAGE A PPROVED BY THE COMMISSIONER . 16
211211
212212 20–6A–05. 17
213213
214214 (A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 18
215215 INDICATED. 19
216216
217217 (2) “LOSSES INCURRED ” MEANS CLAIMS PAID , CLAIMS INCURRED 20
218218 AND REPORTED , AND CLAIMS INCURRED BUT NOT YET REPORTED . 21
219219
220220 (3) “PREMIUM” MEANS THE ACTUAL AMO UNT CHARGED FOR A 22
221221 POLICY ISSUED BY THE PROGRAM. 23
222222
223223 (4) “RATE” MEANS THE AVERAGE PR EMIUM REQUIRED FOR E ACH 24
224224 INSURANCE COVERAGE U NDER A POLICY ISSUED BY THE PROGRAM. 25
225225
226226 (B) SUBJECT TO THE APPROV AL OF THE COMMISSIONER , THE EXECUTIVE 26
227227 DIRECTOR SHALL DETERM INE THE PREMIUMS TO BE CHARGED ON POLICI ES ISSUED 27
228228 BY THE PROGRAM. 28
229229
230230 (C) (1) RATES CHARGED FOR POL ICIES ISSUED BY THE PROGRAM SHALL 29
231231 BE ADEQUATE TO COVER : 30 6 HOUSE BILL 1421
232232
233233
234234
235235 (I) LOSSES INCURRED FOR CLAIMS FILED UNDER T HE POLICY; 1
236236 AND 2
237237
238238 (II) PROGRAM EXPENSES INCU RRED BY THE PROGRAM TO 3
239239 PROVIDE THE POLICY , INCLUDING ALL REASON ABLE AND NECESSARY E XPENSES 4
240240 FOR THE COSTS OF ADM INISTRATION, UNDERWRITING , TAXES, COMMISSION, AND 5
241241 CLAIMS ADJUSTING . 6
242242
243243 (2) IN ASSESSING LOSS RES ERVES, THE COMMISSIONER SHALL 7
244244 ALLOW ONLY LOSS RESE RVES THAT ARE ESTIMA TED FROM ACTUAL CLAI M LOSSES 8
245245 UNDER POLICIES ISSUE D BY THE PROGRAM OR COMPARABLE DATA BY A LICENSED 9
246246 STATISTICAL AGENT , AS ADJUSTED TO REFLE CT COVERAGE PROVIDED UNDER 10
247247 POLICIES ISSUED BY T HE PROGRAM AND ELIGIBILI TY FACTORS REQUIRED TO 11
248248 PURCHASE POLICIES IS SUED BY THE PROGRAM. 12
249249
250250 (D) (1) IN DETERMINING THE PR EMIUMS FOR POLICIES ISSUED BY THE 13
251251 PROGRAM, THE PROGRAM MAY CHARGE A DIF FERENT PREMIUM TO 14
252252 POLICYHOLDERS FOR DR IVERS UNDER THE AGE OF 25 YEARS THAN IS CHARGE D TO 15
253253 POLICYHOLDERS FOR DR IVERS AT LEAST 25 YEARS OLD, EXCEPT THAT THE 16
254254 PREMIUM CHARGED FOR DRIVERS UNDER THE AG E OF 25 YEARS MAY NOT BE MOR E 17
255255 THAN 25% HIGHER THAN THE PREMIUM CHARGED FOR DRIVERS AT LEAST 25 YEARS 18
256256 OLD. 19
257257
258258 (2) NO OTHER RATING FACTO RS MAY BE USED TO DE TERMINE THE 20
259259 PREMIUMS OF POLICIES ISSUED BY THE PROGRAM. 21
260260
261261 (E) (1) THE PROGRAM SHALL FILE PR OPOSED RATES ANNUALL Y WITH 22
262262 THE COMMISSIONER . 23
263263
264264 (2) THE PROGRAM MAY NOT USE T HE PROPOSED RATES UN TIL THE 24
265265 COMMISSIONER APPROVES THE RATES. 25
266266
267267 (3) BEFORE TAKING ACTION ON THE PROPOSED RATE S FILED UNDER 26
268268 PARAGRAPH (1) OF THIS SUBSECTION , THE COMMISSIONER SHALL HO LD A PUBLIC 27
269269 HEARING TO REVIEW TH E PROPOSED RATES . 28
270270
271271 20–6A–06. 29
272272
273273 (A) A POLICY ISSUED BY THE PROGRAM SHALL BE A 12–MONTH POLICY . 30
274274
275275 (B) THE PROGRAM MAY ACCEPT PR EMIUMS: 31
276276 HOUSE BILL 1421 7
277277
278278
279279 (1) AS PAID IN FULL; OR 1
280280
281281 (2) SUBJECT TO SUBSECTIO N (C) OF THIS SECTION , ON AN 2
282282 INSTALLMENT BASIS . 3
283283
284284 (C) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 4
285285 THE PROGRAM SHALL OFFER A N INSTALLMENT PAYMEN T PLAN THAT REQUIRES : 5
286286
287287 (I) AN INITIAL PREMIUM P AYMENT TO BE NOT LES S THAN 16% 6
288288 OF THE TOTAL ANNUAL PREMIUM; AND 7
289289
290290 (II) OF THE REMAINING PRE MIUM DUE, EQUAL AMOUNTS OF 8
291291 INSTALLMENT P AYMENTS DUE EACH MON TH BEGINNING IN THE THIRD MONTH OF 9
292292 THE POLICY PERIOD AN D ENDING IN THE TENT H MONTH OF THE POLIC Y PERIOD. 10
293293
294294 (2) THE PROGRAM MAY OFFER AN ALTERNATIVE PAYMENT PLAN TO 11
295295 THE PAYMENT PLAN SPE CIFIED UNDER PARAGRA PH (1) OF THIS SUBSECTION A S 12
296296 THE PROGRAM DETERMINES AP PROPRIATE. 13
297297
298298 (D) (1) (I) THE PROGRAM MAY IMPOSE AN ADMINISTRATIVE 14
299299 PROCESSING FEE ON PO LICYHOLDERS PARTICIP ATING IN AN INSTALLM ENT PLAN 15
300300 OF NOT MORE THAN $3 PER INSTALLMENT PAYM ENT. 16
301301
302302 (II) AN ADMINISTRATIVE PRO CESSING FEE MAY NOT BE 17
303303 CHARGED ON AN INITIA L PREMIUM PAYMENT . 18
304304
305305 (2) SUBJECT TO THE APPROV AL OF THE COMMISSIONER , THE 19
306306 ADMINISTRATIVE PROCE SSING FEE SHALL BE J USTIFIED BASED ON AC TUAL COSTS 20
307307 RELATED TO COLLECTIN G INSTALLMENT PAYMEN TS. 21
308308
309309 (E) (1) IN ACCORDANCE WITH PA RAGRAPH (2) OF THIS SUBSECTION , THE 22
310310 PROGRAM SHALL ACCEPT PAYMENTS FOR PREMIUM S USING THE FOLLOWIN G 23
311311 METHODS: 24
312312
313313 (I) CASH; 25
314314
315315 (II) CHECK; 26
316316
317317 (III) MONEY ORDER ; 27
318318
319319 (IV) DEBIT CARD; 28
320320
321321 (V) CREDIT CARD; 29 8 HOUSE BILL 1421
322322
323323
324324
325325 (VI) PRODUCER SWEEP ACCOU NT; AND 1
326326
327327 (VII) ANY OTHER METHOD THE PROGRAM DETERMINES 2
328328 APPROPRIATE . 3
329329
330330 (2) ANY FEE ASSOCIATED WI TH A PAYMENT METHOD SHALL BE 4
331331 INCLUDED IN THE MAXI MUM ADMINISTRATIVE P ROCESSING FEE ALLOWA BLE 5
332332 UNDER SUBSECTION (D) OF THIS SECTION. 6
333333
334334 (F) POLICIES ISSUED BY TH E PROGRAM MAY NOT BE FI NANCED UNDER A 7
335335 PREMIUM FINANCE AGRE EMENT. 8
336336
337337 20–6A–07. 9
338338
339339 (A) A FUND PRODUCER MAY BIN D COVERAGE IN THE FUND FOR AN 10
340340 APPLICANT TO THE PROGRAM IF THE APPLIC ANT SUBMITS AN APPLI CATION TO THE 11
341341 FUND PRODUCER AND PAY S THE REQUIRED PREMI UM. 12
342342
343343 (B) A FUND PRODUCER SHALL P ROVIDE NOTICE TO AN APPLICANT FOR A 13
344344 POLICY UNDER THIS SU BTITLE ABOUT THE LIM ITATIONS UNDER THE P OLICY. 14
345345
346346 20–6A–08. 15
347347
348348 (A) THE PROGRAM MAY : 16
349349
350350 (1) SUBJECT TO SUBSECTIO N (B) OF THIS SECTION , REJECT AN 17
351351 APPLICATION FOR INSU RANCE IF THE APPLICA NT OWES TO THE PROGRAM AN 18
352352 UNPAID PREMIUM ON AN EXPIRE D OR CANCELED POLICY ; 19
353353
354354 (2) CANCEL A POLICY FOR NONPAYMENT OF PREMIU M AT ANY TIME 20
355355 AFTER A MINIMUM OF 10 CALENDAR DAYS ’ NOTICE OF NONPAYMENT ; 21
356356
357357 (3) REJECT AN APPLICATIO N FOR INSURANCE OR A T ANY TIME 22
358358 CANCEL A POLICY IF T HE DRIVER’S LICENSE OF THE APPLICAN T OR POLICYHOLDER 23
359359 IS SUSPENDED OR REVO KED; AND 24
360360
361361 (4) NONRENEW A POLICY IF THE INSURED FAILS TO MEET THE 25
362362 ELIGIBILITY REQUIREM ENTS UNDER § 20–6A–03 OF THIS SUBTITLE. 26
363363
364364 (B) (1) IF THE PROGRAM REJECTS AN AP PLICATION UNDER SUBS ECTION 27
365365 (A)(1) OF THIS SECTION, THE PROGRAM SHALL : 28
366366 HOUSE BILL 1421 9
367367
368368
369369 (I) NOTIFY THE APPLICANT OF THE AMOUNT OF THE UNPAID 1
370370 PREMIUM; AND 2
371371
372372 (II) ALLOW THE APPLICANT TO CURE THE DEFICIEN CY. 3
373373
374374 (2) IF THE APPLICANT CURE S THE DEFICIENCY , THE PROGRAM MAY 4
375375 NOT REJECT THE APPLI CANT IF THE APPLICANT IS OTHERWISE ELIGIBLE. 5
376376
377377 20–6A–09. 6
378378
379379 (A) ALL INSURERS LICENSED TO WRITE MOTOR VEHIC LE LIABILITY 7
380380 INSURANCE OR MOTOR V EHICLE PHYSICAL DAMA GE INSURANCE IN THE STATE 8
381381 SHALL PAY AN ANNUAL FEE OF $0.10 PER VEHICLE INSURED BY THE INSURER TO 9
382382 SUPPORT THE PROGRAM’S MARKETING , OUTREACH, AND OTHER PUBLIC 10
383383 EDUCATION EFFORTS RE QUIRED TO RAISE PUBL IC AWARENESS OF THE PROGRAM. 11
384384
385385 (B) THE HOUSE ECONOMIC MATTERS COMMITTEE AND THE SENATE 12
386386 FINANCE COMMITTEE SHALL REVIE W ANNUALLY THE PUBLI C AWARENESS 13
387387 EXPENDITURES INCURRE D BY THE PROGRAM UNDER SUBSECT ION (A) OF THIS 14
388388 SECTION. 15
389389
390390 20–6A–10. 16
391391
392392 THE BOARD OF TRUSTEES, IN CONSULTATION WITH THE ADMINISTRATION , 17
393393 SHALL ADOPT REGULATI ONS TO CARRY OUT THI S SUBTITLE, INCLUDING 18
394394 REGULATIONS THAT REL ATE TO PROCEDURES FO R THE CANCELLATION A ND 19
395395 NONRENEWAL OF POLICI ES ISSUED UNDER THIS SUBTITLE. 20
396396
397397 SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
398398 October 1, 2022. 22
399399
400400