Maryland 2022 Regular Session

Maryland House Bill HB57 Compare Versions

Only one version of the bill is available at this time.

Old	New	Differences
1	1
2	2
3	3	EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
4	4	[Brackets] indicate matter deleted from existing law.
5	5	hb0057
6	6
7	7	HOUSE BILL 57
8	8	C4 2lr1208
9	9	(PRE–FILED)
10	10	By: Delegate Washington
11	11	Requested: November 1, 2021
12	12	Introduced and read first time: January 12, 2022
13	13	Assigned to: Economic Matters
14	14
15	15	A BILL ENTITLED
16	16
17	17	AN ACT concerning 1
18	18
19	19	Motor Vehicle Insurance – Rate Filings – Trade Secrets and Factors Used to 2
20	20	Establish Rates 3
21	21
22	22	FOR the purpose of repealing certain confidentiality protections for proprietary 4
23	23	rate–related information; prohibiting an insurer that uses territory as a factor in 5
24	24	establishing automobile insurance rates from using more than a certain number of 6
25	25	territories; and generally relating to motor vehicle insurance. 7
26	26
27	27	BY repealing and reenacting, with amendments, 8
28	28	Article – Insurance 9
29	29	Section 11–307 and 11–319 10
30	30	Annotated Code of Maryland 11
31	31	(2017 Replacement Volume and 2021 Supplement) 12
32	32
33	33	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
34	34	That the Laws of Maryland read as follows: 14
35	35
36	36	Article – Insurance 15
37	37
38	38	11–307. 16
39	39
40	40	(a) (1) Except as otherwise provided in this subsection, each authorized 17
41	41	insurer and each rating organization that has been designated by an insurer for the filing 18
42	42	of rates under subsection (b) of this section shall file with the Commissioner all rates and 19
43	43	supplementary rate information and all changes and amendments of rates and 20
44	44	supplementary information made by it for use in the State on or before the date they become 21
45	45	effective. 22
46	46
47	47	(2) Rates and supplementary rate information need not be filed for inland 23
48	48	marine risks that by general custom are not written according to manual rules or rating 24 2 HOUSE BILL 57
49	49
50	50
51	51	plans. 1
52	52
53	53	(b) (1) An insurer may itself establish rates and supplementary rate 2
54	54	information based on the factors in § 11–306 of this subtitle. 3
55	55
56	56	(2) Except for workers’ compensation insurance rates, an insurer may use 4
57	57	rates and supplementary rate information prepared and filed with the Commissioner by a 5
58	58	rating organization of which it is a member or subscriber, with average loss factors or 6
59	59	expense factors determined by the rating organization or with modification for its own 7
60	60	expense and loss experience as the credibility of that experience allows. 8
61	61
62	62	(3) If an insurer uses rates and supplementary rate information prepared 9
63	63	by a rating organization: 10
64	64
65	65	(i) the insurer shall notify the Commissioner that it uses rates and 11
66	66	supplementary rate information prepared and filed with the Commissioner by a designated 12
67	67	rating organization of which it is a member or subscriber and shall provide the 13
68	68	Commissioner with information about modifications of those rates and supplementary rate 14
69	69	information that is necessary to inform the Commissioner fully; and 15
70	70
71	71	(ii) subject to modifications filed by the insurer, the insurer’s rates 16
72	72	and supplementary rate information shall be those filed periodically by the rating 17
73	73	organization, including any amendments to those filings. 18
74	74
75	75	(c) (1) [In this subsection, “proprietary rate–related information”: 19
76	76
77	77	(i) means a rating model; and 20
78	78
79	79	(ii) includes the formulas, algorithms, analyses, and specific weights 21
80	80	given to variables used in the model. 22
81	81
82	82	(2) (i) Except as provided in paragraph (3) of this subsection, each] 23
83	83	EACH filing and any supporting information filed under this subtitle shall be open to public 24
84	84	inspection as soon as filed. 25
85	85
86	86	[(ii)] (2) On request and payment of a reasonable charge, a person 26
87	87	may obtain copies of a filing and any supporting information. 27
88	88
89	89	[(3) (i) Information that an insurer files with the Commissioner and 28
90	90	identifies as proprietary rate–related information: 29
91	91
92	92	1. constitutes a trade secret and confidential commercial 30
93	93	information; 31
94	94
95	95	2. subject to subparagraph (ii) of this paragraph and except 32
96	96	as provided in subparagraph (iii) of this paragraph, shall be kept confidential by the 33
97	97	Commissioner; and 34 HOUSE BILL 57 3
98	98
99	99
100	100
101	101	3. is not subject to subpoena served on the Commissioner or 1
102	102	any recipient of proprietary rate–related information under subparagraph (iii) of this 2
103	103	paragraph. 3
104	104
105	105	(ii) 1. Except as provided in subsubparagraph 2 of this 4
106	106	subparagraph, if the Commissioner determines that some or all of the material that an 5
107	107	insurer files and identifies as proprietary rate–related information does not constitute 6
108	108	proprietary rate–related information as defined in paragraph (1) of this subsection, the 7
109	109	Commissioner shall: 8
110	110
111	111	A. give the insurer written notice of that determination; and 9
112	112
113	113	B. make the material open to public inspection 10 business 10
114	114	days after the date the Commissioner gives notice of the determination to the insurer. 11
115	115
116	116	2. The Commissioner may not disclose the material if: 12
117	117
118	118	A. the insurer has not put the rate filing into effect; and 13
119	119
120	120	B. within the time period described in subsubparagraph 1B 14
121	121	of this subparagraph, the insurer withdraws the rate filing and notifies the Commissioner 15
122	122	that the rate filing is withdrawn. 16
123	123
124	124	(iii) This paragraph does not prohibit the Commissioner from 17
125	125	disclosing an insurer’s proprietary rate–related information: 18
126	126
127	127	1. in furtherance of a regulatory or legal action that the 19
128	128	Commissioner undertakes in performing the Commissioner’s duties under this article; 20
129	129
130	130	2. if the recipient enters into a written agreement to 21
131	131	maintain the confidentiality of the proprietary rate–related information, to: 22
132	132
133	133	A. an outside consultant that the Commissioner engages to 23
134	134	assist the Commissioner in reviewing the insurer’s rate filing; 24
135	135
136	136	B. another state’s insurance regulatory agency; 25
137	137
138	138	C. the National Association of Insurance Commissioners; or 26
139	139
140	140	D. a state or federal law enforcement authority, including the 27
141	141	United States Department of Justice and the Maryland Attorney General, if acting in a law 28
142	142	enforcement capacity; or 29
143	143
144	144	3. if the proprietary rate–related information is part of a 30
145	145	homeowner’s insurance rate filing, to the People’s Insurance Counsel Division acting under 31
146	146	§ 6–306 of the State Government Article. 32 4 HOUSE BILL 57
147	147
148	148
149	149
150	150	(iv) 1. Except as provided in subsubparagraph 2 of this 1
151	151	subparagraph, the People’s Insurance Counsel Division shall maintain the confidentiality 2
152	152	of proprietary rate–related information disclosed to the Division under subparagraph (iii)3 3
153	153	of this paragraph. 4
154	154
155	155	2. The People’s Insurance Counsel Division may disclose 5
156	156	proprietary rate–related information to an outside consultant that the Division engages to 6
157	157	assist the Division in reviewing a homeowner’s insurance rate filing, provided that the 7
158	158	outside consultant enters into a written agreement to maintain the confidentiality of the 8
159	159	proprietary rate–related information. 9
160	160
161	161	(v) The Commissioner shall notify the insurer in writing at least 10 10
162	162	business days before the Commissioner discloses any of the insurer’s proprietary 11
163	163	rate–related information under subparagraph (iii) of this paragraph. 12
164	164
165	165	(vi) In addition to any other rights an insurer may have under any 13
166	166	other applicable law, the insurer may seek to have any disclosure of the insurer’s 14
167	167	proprietary rate–related information under subparagraph (iii)1 of this paragraph be made 15
168	168	under seal or other protection of confidentiality. 16
169	169
170	170	(vii) There is no waiver of any applicable privilege or claim of 17
171	171	confidentiality with regard to any proprietary rate–related information that is disclosed 18
172	172	under subparagraph (iii) of this paragraph. 19
173	173
174	174	(4) This subsection may not be construed to: 20
175	175
176	176	(i) authorize an insurer to designate the rating factors used to 21
177	177	calculate the premium as proprietary rate–related information; or 22
178	178
179	179	(ii) authorize the Commissioner to keep the rating factors 23
180	180	confidential.] 24
181	181
182	182	(d) (1) The Commissioner may investigate and determine whether or not rates 25
183	183	in the State are excessive, inadequate, or unfairly discriminatory. 26
184	184
185	185	(2) In an investigation and determination under this subsection, the 27
186	186	Commissioner shall give due consideration to the factors specified in § 11–306 of this 28
187	187	subtitle. 29
188	188
189	189	11–319. 30
190	190
191	191	(A) AN INSURER THAT USES TERRITORY AS A FACTO R IN ESTABLISHING 31
192	192	AUTOMOBILE INSURANCE RA TES MAY NOT USE MORE THAN FIVE TERRITORIE S. 32
193	193
194	194	(B) An insurer that uses territory as a factor in establishing automobile insurance 33
195	195	rates shall submit a statement to the Commissioner certifying that: 34 HOUSE BILL 57 5
196	196
197	197
198	198
199	199	(1) the territories used by the insurer have been reviewed within the 1
200	200	previous 3 years; [and] 2
201	201
202	202	(2) use of the territories is actuarially justified; AND 3
203	203
204	204	(3) THE INSURER DID NOT USE MORE THAN FIVE TERRITORIES. 4
205	205
206	206	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 5
207	207	policies of motor vehicle insurance offered, issued, or delivered in the State on or after 6
208	208	January 1, 2023. 7
209	209
210	210	SECTION 3. AND BE IT FURTHER ENACTED, That, this Act shall take effect 8
211	211	October 1, 2022. 9
212	212