EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
*hb1421*
HOUSE BILL 1421
C4 2lr3115
HB 660/20 – ECM
By: Delegate Bridges
Introduced and read first time: February 17, 2022
Assigned to: Rules and Executive Nominations
A BILL ENTITLED
AN ACT concerning 1
Baltimore City – Lifeline Low–Cost Automobile Insurance Program 2
FOR the purpose of establishing the Lifeline Low–Cost Automobile Insurance Program to 3
offer low–cost automobile insurance policies to residents of Baltimore City; 4
establishing that the Program is part of the Maryland Automobile Insurance Fund; 5
establishing eligibility, coverage, security, and premium requirements; establishing 6
the authority of the Program regarding rejection of applicants and cancellations and 7
nonrenewals of policies; requiring insurers licensed to write motor vehicle liability 8
insurance or motor vehicle physical damage insurance to pay a certain annual fee to 9
support Program public awareness efforts; and generally relating to the Lifeline 10
Low–Cost Automobile Insurance Program for residents of Baltimore City. 11
BY repealing and reenacting, with amendments, 12
Article – Insurance 13
Section 20–301 14
Annotated Code of Maryland 15
(2017 Replacement Volume and 2021 Supplement) 16
BY adding to 17
Article – Insurance 18
Section 20–6A–01 through 20–6A–10 to be under the new subtitle “Subtitle 6A. 19
Lifeline Low–Cost Automobile Insurance Program” 20
Annotated Code of Maryland 21
(2017 Replacement Volume and 2021 Supplement) 22
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 23
That the Laws of Maryland read as follows: 24
Article – Insurance 25
20–301. 26 2 HOUSE BILL 1421
(a) The purpose of the Fund is to provide the financial security required under § 1
17–103 of the Transportation Article to: 2
(1) those eligible persons that are unable to obtain it from an Association 3
member; AND 4
(2) ELIGIBLE INDIVIDUALS UNDER THE LIFELINE LOW–COST 5
AUTOMOBILE INSURANCE PROGRAM ESTA BLISHED UNDER SUBTITLE 6A OF THIS 6
TITLE. 7
(b) Money of the Fund consists of revenues, premiums, and other receipts 8
provided by law. 9
(c) (1) All operating expenses of the Fund shall be paid from the money 10
collected by or for the Fund. 11
(2) (i) Subject to subparagraphs (ii) through (iv) of this paragraph, 12
money and property available to the Fund may be used for the general purposes of the 13
Fund. 14
(ii) Premiums collected and income accruing from those premiums 15
may be used only for the payment of claims arising under policies issued by the Fund and 16
for the administrative expenses of the Fund. 17
(iii) The Fund shall keep separate records of any income and 18
expenses directly attributable to the Uninsured Division, including the processing and 19
payment of unsatisfied claims under Subtitle 6 of this title. 20
(iv) The Fund shall keep separate records of any income and 21
expenses directly attributable to its commercial policy and claims operations. 22
SUBTITLE 6A. LIFELINE LOW–COST AUTOMOBILE INSURANCE PROGRAM. 23
20–6A–01. 24
(A) IN THIS SUBTITLE THE FOLLOWING WORDS HAVE THE MEANINGS 25
INDICATED. 26
(B) “POLICY” MEANS A LOW –COST AUTOMOBILE INSU RANCE POLICY 27
ISSUED UNDER THIS SU BTITLE BY THE PROGRAM. 28
(C) “PROGRAM” MEANS THE LIFELINE LOW–COST AUTOMOBILE 29
INSURANCE PROGRAM. 30
HOUSE BILL 1421 3
20–6A–02. 1
(A) THERE IS A LIFELINE LOW–COST AUTOMOBILE INSURANCE PROGRAM. 2
(B) THE PURPOSE OF THE PROGRAM IS TO OFFER L OW–COST AUTOMOBILE 3
INSURANCE POLICIES T O RESIDENTS OF BALTIMORE CITY IN ACCORDANCE WI TH 4
THIS SUBTITLE. 5
(C) (1) THE PROGRAM IS PART OF THE FUND. 6
(2) THE PROGRAM SHALL BE ADMI NISTERED IN THE SAME MANNER 7
AS THE FUND. 8
(D) THE PROGRAM SHALL BE DEVE LOPED IN CONSULTATIO N WITH THE 9
ADMINISTRATION . 10
20–6A–03. 11
(A) ON RECEIPT OF THE PRE MIUM SET BY THE FUND, THE PROGRAM SHALL 12
SELL, ISSUE, AND DELIVER A POLICY THAT PROVIDES THE SE CURITY REQUIRED 13
UNDER § 17–103 OF THE TRANSPORTATION ARTICLE TO AN INDIVID UAL WHO MEETS 14
THE REQUIREMENTS OF THIS SECTION. 15
(B) TO BE ELIGIBLE FOR A POLICY ISSUED UNDER THIS SUBTITLE, AN 16
INDIVIDUAL: 17
(1) MUST OWN, LEASE, OR RENT A PRIMARY PL ACE OF RESIDENCE IN 18
BALTIMORE CITY, OR OTHERWISE DEMONST RATE THAT THE INDIVI DUAL’S 19
PRIMARY PLACE OF RES IDENCE IS IN BALTIMORE CITY; 20
(2) MUST HAVE FILED AS A STATE RESIDENT FOR IN COME TAX 21
PURPOSES, IF REQUIRED BY LAW ; 22
(3) MUST BE IN A HOUSEHO LD WITH A GROSS ANNU AL HOUSEHOLD 23
INCOME THAT DOES NOT EXCEED 300% OF THE FEDERAL POVER TY LEVEL; 24
(4) MUST BE AT LEAST 19 YEARS OLD AND HAVE B EEN CONTINUOUSLY 25
LICENSED TO DRIVE AN AUTOMOBILE FOR THE I MMEDIATELY PRECEDING 3 YEARS; 26
(5) MAY NOT HAVE MORE TH AN ONE OF EITHER , BUT NOT BOTH , OF 27
THE FOLLOWING WITHIN THE IMMEDIATELY PREC EDING 3 YEARS: 28
(I) A PROPERTY –DAMAGE–ONLY ACCIDENT IN WHI CH THE 29 4 HOUSE BILL 1421
DRIVER WAS PRINCIPAL LY AT FAULT; OR 1
(II) A POINT FOR A MOVING VIOLATION; 2
(6) MAY NOT HAVE ON RECORD W ITHIN THE IMMEDIATEL Y 3
PRECEDING 3 YEARS AN AT–FAULT ACCIDENT INVOL VING BODILY INJURY O R 4
DEATH; AND 5
(7) MAY NOT HAVE A FELON Y OR MISDEMEANOR CON VICTION FOR A 6
VIOLATION OF THE MOT OR VEHICLE LAWS OTHE R THAN FOR A VIOLATI ON OF § 7
17–107 OF THE TRANSPORTATION ARTICLE. 8
(C) (1) THE ELIGIBILITY OF AN APPLICANT FOR INSURA NCE FROM THE 9
PROGRAM SHALL BE CERT IFIED AT A TIME AND IN A MANNER APPROVED BY THE 10
PROGRAM. 11
(2) (I) IN ESTABLISHING ACCEP TABLE METHODS THAT 12
DEMONSTRATE THE ELIG IBILITY OF INDIVIDUALS UNDER SUBSECTION (B)(3) OF 13
THIS SECTION, THE PROGRAM SHALL DETERMI NE METHODS THAT ARE THE LEAST 14
CUMBERSOME METHODS A VAILABLE. 15
(II) TO BE ELIGIBLE TO REN EW A POLICY ISSUED U NDER THIS 16
SUBTITLE, AN INDIVIDUAL SHALL DEMONSTRATE ELIGIBIL ITY UNDER SUBSECTION 17
(B)(3) OF THIS SECTION AT L EAST ONCE EVERY 3 YEARS. 18
(D) AS SOON AS PRACTICABL E, THE PROGRAM SHALL ALLOW A N APPLICANT 19
TO DEMONSTRATE ELIGI BILITY FOR THE PROGRAM AND PURCHASE A POLICY 20
ISSUED BY THE PROGRAM ONLINE . 21
20–6A–04. 22
(A) EXCEPT AS OTHERWISE PROV IDED IN THIS SECTION , EACH POLICY 23
ISSUED BY THE PROGRAM SHALL CONTAIN THE MINIMUM COVERAGE S REQUIRED 24
UNDER TITLE 19, SUBTITLE 5 OF THIS ARTICLE. 25
(B) EACH POLICY ISSUED BY THE PROGRAM MAY PROVIDE C OVERAGE ONLY 26
FOR AN AUTOMOBILE WI TH A VALUE OF $25,000 OR LESS AT THE TIME OF 27
APPLICATION, AS EVIDENCED BY THE VALUE GIVEN TO THE A UTOMOBILE BY THE 28
MOTOR VEHICLE ADMINISTRATION IN ASS ESSING VEHICLE LICEN SE FEES. 29
(C) (1) EXCEPT AS OTHERWISE P ROVIDED IN THIS SECT ION, EACH 30
POLICY ISSUED BY THE PROGRAM MAY PROVIDE O NLY FOR: 31
(I) THE PAYMENT OF CLAIM S FOR BODILY INJURY OR DEATH 32 HOUSE BILL 1421 5
ARISING FROM AN ACCI DENT OF UP TO $15,000 FOR ANY ONE PERSON A ND UP TO 1
$30,000 FOR ANY TWO OR MORE PERSONS, IN ADDITION TO INTER EST AND COSTS; 2
AND 3
(II) THE PAYMENT O F CLAIMS FOR PROPERT Y OF OTHERS 4
DAMAGED OR DESTROYED IN AN ACCIDENT OF UP TO $7,500, IN ADDITION TO 5
INTEREST AND COSTS . 6
(2) NOTWITHSTANDING ANY O THER PROVISION OF TH IS ARTICLE, A 7
POLICY ISSUED BY THE PROGRAM SHALL SATISFY THE MINIMUM SECURITY 8
REQUIRED B Y § 17–103 OF THE TRANSPORTATION ARTICLE. 9
(D) THE PROGRAM SHALL OFFER A N APPLICANT WHO PURC HASES A POLICY 10
ISSUED BY THE PROGRAM THE OPTION TO PURCHASE THE FOLLOWI NG ADDITIONAL 11
COVERAGES: 12
(1) UNINSURED MOTORIST C OVERAGE OR UNDERINSU RED MOTORIST 13
COVERAGE; 14
(2) PERSONAL INJURY PROT ECTION COVERAGE ; OR 15
(3) ANY OTHER COVERAGE A PPROVED BY THE COMMISSIONER . 16
20–6A–05. 17
(A) (1) IN THIS SECTION THE F OLLOWING WORDS HAVE THE MEANINGS 18
INDICATED. 19
(2) “LOSSES INCURRED ” MEANS CLAIMS PAID , CLAIMS INCURRED 20
AND REPORTED , AND CLAIMS INCURRED BUT NOT YET REPORTED . 21
(3) “PREMIUM” MEANS THE ACTUAL AMO UNT CHARGED FOR A 22
POLICY ISSUED BY THE PROGRAM. 23
(4) “RATE” MEANS THE AVERAGE PR EMIUM REQUIRED FOR E ACH 24
INSURANCE COVERAGE U NDER A POLICY ISSUED BY THE PROGRAM. 25
(B) SUBJECT TO THE APPROV AL OF THE COMMISSIONER , THE EXECUTIVE 26
DIRECTOR SHALL DETERM INE THE PREMIUMS TO BE CHARGED ON POLICI ES ISSUED 27
BY THE PROGRAM. 28
(C) (1) RATES CHARGED FOR POL ICIES ISSUED BY THE PROGRAM SHALL 29
BE ADEQUATE TO COVER : 30 6 HOUSE BILL 1421
(I) LOSSES INCURRED FOR CLAIMS FILED UNDER T HE POLICY; 1
AND 2
(II) PROGRAM EXPENSES INCU RRED BY THE PROGRAM TO 3
PROVIDE THE POLICY , INCLUDING ALL REASON ABLE AND NECESSARY E XPENSES 4
FOR THE COSTS OF ADM INISTRATION, UNDERWRITING , TAXES, COMMISSION, AND 5
CLAIMS ADJUSTING . 6
(2) IN ASSESSING LOSS RES ERVES, THE COMMISSIONER SHALL 7
ALLOW ONLY LOSS RESE RVES THAT ARE ESTIMA TED FROM ACTUAL CLAI M LOSSES 8
UNDER POLICIES ISSUE D BY THE PROGRAM OR COMPARABLE DATA BY A LICENSED 9
STATISTICAL AGENT , AS ADJUSTED TO REFLE CT COVERAGE PROVIDED UNDER 10
POLICIES ISSUED BY T HE PROGRAM AND ELIGIBILI TY FACTORS REQUIRED TO 11
PURCHASE POLICIES IS SUED BY THE PROGRAM. 12
(D) (1) IN DETERMINING THE PR EMIUMS FOR POLICIES ISSUED BY THE 13
PROGRAM, THE PROGRAM MAY CHARGE A DIF FERENT PREMIUM TO 14
POLICYHOLDERS FOR DR IVERS UNDER THE AGE OF 25 YEARS THAN IS CHARGE D TO 15
POLICYHOLDERS FOR DR IVERS AT LEAST 25 YEARS OLD, EXCEPT THAT THE 16
PREMIUM CHARGED FOR DRIVERS UNDER THE AG E OF 25 YEARS MAY NOT BE MOR E 17
THAN 25% HIGHER THAN THE PREMIUM CHARGED FOR DRIVERS AT LEAST 25 YEARS 18
OLD. 19
(2) NO OTHER RATING FACTO RS MAY BE USED TO DE TERMINE THE 20
PREMIUMS OF POLICIES ISSUED BY THE PROGRAM. 21
(E) (1) THE PROGRAM SHALL FILE PR OPOSED RATES ANNUALL Y WITH 22
THE COMMISSIONER . 23
(2) THE PROGRAM MAY NOT USE T HE PROPOSED RATES UN TIL THE 24
COMMISSIONER APPROVES THE RATES. 25
(3) BEFORE TAKING ACTION ON THE PROPOSED RATE S FILED UNDER 26
PARAGRAPH (1) OF THIS SUBSECTION , THE COMMISSIONER SHALL HO LD A PUBLIC 27
HEARING TO REVIEW TH E PROPOSED RATES . 28
20–6A–06. 29
(A) A POLICY ISSUED BY THE PROGRAM SHALL BE A 12–MONTH POLICY . 30
(B) THE PROGRAM MAY ACCEPT PR EMIUMS: 31
HOUSE BILL 1421 7
(1) AS PAID IN FULL; OR 1
(2) SUBJECT TO SUBSECTIO N (C) OF THIS SECTION , ON AN 2
INSTALLMENT BASIS . 3
(C) (1) EXCEPT AS PROVIDED IN PARAGRAPH (2) OF THIS SUBSECTION , 4
THE PROGRAM SHALL OFFER A N INSTALLMENT PAYMEN T PLAN THAT REQUIRES : 5
(I) AN INITIAL PREMIUM P AYMENT TO BE NOT LES S THAN 16% 6
OF THE TOTAL ANNUAL PREMIUM; AND 7
(II) OF THE REMAINING PRE MIUM DUE, EQUAL AMOUNTS OF 8
INSTALLMENT P AYMENTS DUE EACH MON TH BEGINNING IN THE THIRD MONTH OF 9
THE POLICY PERIOD AN D ENDING IN THE TENT H MONTH OF THE POLIC Y PERIOD. 10
(2) THE PROGRAM MAY OFFER AN ALTERNATIVE PAYMENT PLAN TO 11
THE PAYMENT PLAN SPE CIFIED UNDER PARAGRA PH (1) OF THIS SUBSECTION A S 12
THE PROGRAM DETERMINES AP PROPRIATE. 13
(D) (1) (I) THE PROGRAM MAY IMPOSE AN ADMINISTRATIVE 14
PROCESSING FEE ON PO LICYHOLDERS PARTICIP ATING IN AN INSTALLM ENT PLAN 15
OF NOT MORE THAN $3 PER INSTALLMENT PAYM ENT. 16
(II) AN ADMINISTRATIVE PRO CESSING FEE MAY NOT BE 17
CHARGED ON AN INITIA L PREMIUM PAYMENT . 18
(2) SUBJECT TO THE APPROV AL OF THE COMMISSIONER , THE 19
ADMINISTRATIVE PROCE SSING FEE SHALL BE J USTIFIED BASED ON AC TUAL COSTS 20
RELATED TO COLLECTIN G INSTALLMENT PAYMEN TS. 21
(E) (1) IN ACCORDANCE WITH PA RAGRAPH (2) OF THIS SUBSECTION , THE 22
PROGRAM SHALL ACCEPT PAYMENTS FOR PREMIUM S USING THE FOLLOWIN G 23
METHODS: 24
(I) CASH; 25
(II) CHECK; 26
(III) MONEY ORDER ; 27
(IV) DEBIT CARD; 28
(V) CREDIT CARD; 29 8 HOUSE BILL 1421
(VI) PRODUCER SWEEP ACCOU NT; AND 1
(VII) ANY OTHER METHOD THE PROGRAM DETERMINES 2
APPROPRIATE . 3
(2) ANY FEE ASSOCIATED WI TH A PAYMENT METHOD SHALL BE 4
INCLUDED IN THE MAXI MUM ADMINISTRATIVE P ROCESSING FEE ALLOWA BLE 5
UNDER SUBSECTION (D) OF THIS SECTION. 6
(F) POLICIES ISSUED BY TH E PROGRAM MAY NOT BE FI NANCED UNDER A 7
PREMIUM FINANCE AGRE EMENT. 8
20–6A–07. 9
(A) A FUND PRODUCER MAY BIN D COVERAGE IN THE FUND FOR AN 10
APPLICANT TO THE PROGRAM IF THE APPLIC ANT SUBMITS AN APPLI CATION TO THE 11
FUND PRODUCER AND PAY S THE REQUIRED PREMI UM. 12
(B) A FUND PRODUCER SHALL P ROVIDE NOTICE TO AN APPLICANT FOR A 13
POLICY UNDER THIS SU BTITLE ABOUT THE LIM ITATIONS UNDER THE P OLICY. 14
20–6A–08. 15
(A) THE PROGRAM MAY : 16
(1) SUBJECT TO SUBSECTIO N (B) OF THIS SECTION , REJECT AN 17
APPLICATION FOR INSU RANCE IF THE APPLICA NT OWES TO THE PROGRAM AN 18
UNPAID PREMIUM ON AN EXPIRE D OR CANCELED POLICY ; 19
(2) CANCEL A POLICY FOR NONPAYMENT OF PREMIU M AT ANY TIME 20
AFTER A MINIMUM OF 10 CALENDAR DAYS ’ NOTICE OF NONPAYMENT ; 21
(3) REJECT AN APPLICATIO N FOR INSURANCE OR A T ANY TIME 22
CANCEL A POLICY IF T HE DRIVER’S LICENSE OF THE APPLICAN T OR POLICYHOLDER 23
IS SUSPENDED OR REVO KED; AND 24
(4) NONRENEW A POLICY IF THE INSURED FAILS TO MEET THE 25
ELIGIBILITY REQUIREM ENTS UNDER § 20–6A–03 OF THIS SUBTITLE. 26
(B) (1) IF THE PROGRAM REJECTS AN AP PLICATION UNDER SUBS ECTION 27
(A)(1) OF THIS SECTION, THE PROGRAM SHALL : 28
HOUSE BILL 1421 9
(I) NOTIFY THE APPLICANT OF THE AMOUNT OF THE UNPAID 1
PREMIUM; AND 2
(II) ALLOW THE APPLICANT TO CURE THE DEFICIEN CY. 3
(2) IF THE APPLICANT CURE S THE DEFICIENCY , THE PROGRAM MAY 4
NOT REJECT THE APPLI CANT IF THE APPLICANT IS OTHERWISE ELIGIBLE. 5
20–6A–09. 6
(A) ALL INSURERS LICENSED TO WRITE MOTOR VEHIC LE LIABILITY 7
INSURANCE OR MOTOR V EHICLE PHYSICAL DAMA GE INSURANCE IN THE STATE 8
SHALL PAY AN ANNUAL FEE OF $0.10 PER VEHICLE INSURED BY THE INSURER TO 9
SUPPORT THE PROGRAM’S MARKETING , OUTREACH, AND OTHER PUBLIC 10
EDUCATION EFFORTS RE QUIRED TO RAISE PUBL IC AWARENESS OF THE PROGRAM. 11
(B) THE HOUSE ECONOMIC MATTERS COMMITTEE AND THE SENATE 12
FINANCE COMMITTEE SHALL REVIE W ANNUALLY THE PUBLI C AWARENESS 13
EXPENDITURES INCURRE D BY THE PROGRAM UNDER SUBSECT ION (A) OF THIS 14
SECTION. 15
20–6A–10. 16
THE BOARD OF TRUSTEES, IN CONSULTATION WITH THE ADMINISTRATION , 17
SHALL ADOPT REGULATI ONS TO CARRY OUT THI S SUBTITLE, INCLUDING 18
REGULATIONS THAT REL ATE TO PROCEDURES FO R THE CANCELLATION A ND 19
NONRENEWAL OF POLICI ES ISSUED UNDER THIS SUBTITLE. 20
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 21
October 1, 2022. 22