MD
Maryland Senate Bill SB278

Maryland 2022 Regular Session

Maryland Senate Bill SB278 Compare Versions

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1- LAWRENCE J. HOGAN, JR., Governor Ch. 453
21
3-– 1 –
4-Chapter 453
5-(Senate Bill 278)
62
7-AN ACT concerning
3+EXPLANATION: CAPITALS INDICATE MATTER ADDED TO EXIS TING LAW.
4+ [Brackets] indicate matter deleted from existing law.
5+ Underlining indicates amendments to bill.
6+ Strike out indicates matter stricken from the bill by amendment or deleted from the law by
7+amendment.
8+ *sb0278*
89
9-Maryland Automobile Insurance Fund – Installment Payment Plans
10+SENATE BILL 278
11+C4 2lr0489
12+ CF HB 377
13+By: Senator McCray
14+Introduced and read first time: January 19, 2022
15+Assigned to: Finance
16+Committee Report: Favorable
17+Senate action: Adopted
18+Read second time: February 12, 2022
1019
11-FOR the purpose of altering certain restrictions and requirements related to the authority
12-of the Maryland Automobile Insurance Fund to accept premiums on an installment
13-payment basis for motor vehicle liability insurance policies; authorizing the Fund to
14-charge and collect, if approved by the Maryland Insurance Commissioner, reasonable
15-installment fees or reasonable fees for late payment of premiums by policyholders;
16-and generally relating to the Maryland Automobile Insurance Fund and installment
17-payment plans.
20+CHAPTER ______
1821
19-BY repealing and reenacting, with amendments,
20- Article – Insurance
21-Section 20–507 and 27–216(b)
22- Annotated Code of Maryland
23- (2017 Replacement Volume and 2021 Supplement)
22+AN ACT concerning 1
2423
25-BY repealing and reenacting, without amendments,
26- Article – Insurance
27-Section 27–216(a) and (c)
28- Annotated Code of Maryland
29- (2017 Replacement Volume and 2021 Supplement)
24+Maryland Automobile Insurance Fund – Installment Payment Plans 2
3025
31- SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
32-That the Laws of Maryland read as follows:
26+FOR the purpose of altering certain restrictions and requirements related to the authority 3
27+of the Maryland Automobile Insurance Fund to accept premiums on an installment 4
28+payment basis for motor vehicle liability insurance policies; authorizing the Fund to 5
29+charge and collect, if approved by the Maryland Insurance Commissioner, reasonable 6
30+installment fees or reasonable fees for late payment of premiums by policyholders; 7
31+and generally relating to the Maryland Automobile Insurance Fund and installment 8
32+payment plans. 9
3333
34-Article – Insurance
34+BY repealing and reenacting, with amendments, 10
35+ Article – Insurance 11
36+Section 20–507 and 27–216(b) 12
37+ Annotated Code of Maryland 13
38+ (2017 Replacement Volume and 2021 Supplement) 14
3539
36-20–507.
40+BY repealing and reenacting, without amendments, 15
41+ Article – Insurance 16
42+Section 27–216(a) and (c) 17
43+ Annotated Code of Maryland 18
44+ (2017 Replacement Volume and 2021 Supplement) 19
3745
38- (a) Subject to the authority of the Commissioner to determine whether rates are
39-excessive, inadequate, or unfairly discriminatory, as provided in Title 11, Subtitle 3 of this
40-article, the Executive Director shall determine the premiums to be charged on policies
41-issued by the Fund.
46+ SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 20
47+That the Laws of Maryland read as follows: 21
48+ 2 SENATE BILL 278
4249
43- (b) (1) Except as provided in subsection (c) of this section, the provisions of
44-Title 11, Subtitle 3 of this article apply to the determination of premiums by the Executive
45-Director and the filing of rates with the Commissioner.
4650
47- (2) Notwithstanding Title 11, Subtitle 3 of this article or any other
48-provision of this title, the Executive Director may base premiums on one or both of the
49-following items: Ch. 453 2022 LAWS OF MARYLAND
51+Article – Insurance 1
5052
51-– 2 –
53+20–507. 2
5254
53- (i) the number of points accumulated by an insured or applicant for
54-insurance under the point system provided for in Title 16, Subtitle 4 of the Transportation
55-Article; or
55+ (a) Subject to the authority of the Commissioner to determine whether rates are 3
56+excessive, inadequate, or unfairly discriminatory, as provided in Title 11, Subtitle 3 of this 4
57+article, the Executive Director shall determine the premiums to be charged on policies 5
58+issued by the Fund. 6
5659
57- (ii) the prior claims experience of an insured or applicant for
58-insurance.
60+ (b) (1) Except as provided in subsection (c) of this section, the provisions of 7
61+Title 11, Subtitle 3 of this article apply to the determination of premiums by the Executive 8
62+Director and the filing of rates with the Commissioner. 9
5963
60- (c) (1) Premiums for all commercial coverage shall be determined in
61-accordance with this section and § 20–508 of this subtitle.
64+ (2) Notwithstanding Title 11, Subtitle 3 of this article or any other 10
65+provision of this title, the Executive Director may base premiums on one or both of the 11
66+following items: 12
6267
63- (2) Notwithstanding paragraph (1) of this subsection, the rating principles
64-under subsection (d) of this section may not be used to determine the premium for
65-commercial coverage.
68+ (i) the number of points accumulated by an insured or applicant for 13
69+insurance under the point system provided for in Title 16, Subtitle 4 of the Transportation 14
70+Article; or 15
6671
67- (d) In reviewing rates filed by the Fund, the Commissioner shall consider not only
68-the rating principles under Title 11, Subtitle 3 of this article but also the statutory purpose
69-of the Fund under § 20–301 of this title.
72+ (ii) the prior claims experience of an insured or applicant for 16
73+insurance. 17
7074
71- (e) (1) The Motor Vehicle Administration and Executive Director may arrange
72-for the Motor Vehicle Administration to collect premiums on policies issued by the Fund
73-when the Motor Vehicle Administration issues a driver’s license or certificate of
74-registration.
75+ (c) (1) Premiums for all commercial coverage shall be determined in 18
76+accordance with this section and § 20–508 of this subtitle. 19
7577
76- (2) A premium collected under this subsection shall be paid to the State
77-Treasurer for the account of the Fund.
78+ (2) Notwithstanding paragraph (1) of this subsection, the rating principles 20
79+under subsection (d) of this section may not be used to determine the premium for 21
80+commercial coverage. 22
7881
79- (f) (1) The Fund may not[:
82+ (d) In reviewing rates filed by the Fund, the Commissioner shall consider not only 23
83+the rating principles under Title 11, Subtitle 3 of this article but also the statutory purpose 24
84+of the Fund under § 20–301 of this title. 25
8085
81- (i)] provide directly or indirectly for the financing of premiums[; or
86+ (e) (1) The Motor Vehicle Administration and Executive Director may arrange 26
87+for the Motor Vehicle Administration to collect premiums on policies issued by the Fund 27
88+when the Motor Vehicle Administration issues a driver’s license or certificate of 28
89+registration. 29
8290
83- (ii) except as provided in subsection (g) of this section, accept
84-premiums on an installment basis].
91+ (2) A premium collected under this subsection shall be paid to the State 30
92+Treasurer for the account of the Fund. 31
8593
86- (2) A premium may be financed only by a premium finance company
87-registered with the Commissioner in accordance with § 23–201 of this article.
94+ (f) (1) The Fund may not[: 32
8895
89- (3) If a prospective insured’s initial payment to the Fund, a fund producer,
90-or premium finance company is not honored, a policy or endorsement issued in reliance on
91-that payment is void.
96+ (i)] provide directly or indirectly for the financing of premiums[; or 33
97+ SENATE BILL 278 3
9298
93- (g) (1) (i) Subject to the approval of the Commissioner and in accordance
94-with this subsection, the Fund may accept premiums on an installment payment basis [only
95-on 12–month personal lines policies].
9699
97- (ii) In approving the Fund’s plan for accepting premiums on an LAWRENCE J. HOGAN, JR., Governor Ch. 453
100+ (ii) except as provided in subsection (g) of this section, accept 1
101+premiums on an installment basis]. 2
98102
99-– 3 –
100-installment payment basis, the Commissioner shall:
103+ (2) A premium may be financed only by a premium finance company 3
104+registered with the Commissioner in accordance with § 23–201 of this article. 4
101105
102- 1. CONSIDER AS FACTORS :
106+ (3) If a prospective insured’s initial payment to the Fund, a fund producer, 5
107+or premium finance company is not honored, a policy or endorsement issued in reliance on 6
108+that payment is void. 7
103109
104- A. THE PERCENTAGE OF TH E INITIAL PREMIUM
105-PAYMENT IN COMPARISO N TO THE TOTAL PREMI UM UNDER THE POLICY ;
110+ (g) (1) (i) Subject to the approval of the Commissioner and in accordance 8
111+with this subsection, the Fund may accept premiums on an installment payment basis [only 9
112+on 12–month personal lines policies]. 10
106113
107- B. THE NUMBER OF INSTALLMEN T PREMIUM PAYMENTS
108-ACCEPTED ON A POLICY UNDER THE INSTALLMEN T PAYMENT PLAN ; AND
114+ (ii) In approving the Fund’s plan for accepting premiums on an 11
115+installment payment basis, the Commissioner shall: 12
109116
110- C. THE OVERALL AFFORDAB ILITY OF THE INSTALL MENT
111-PAYMENT PLAN IN COMPARISON T O OTHER PAYMENT OPTI ONS AVAILABLE TO THE
112-POLICYHOLDER ; AND
117+ 1. CONSIDER AS FACTORS : 13
113118
114- 2. ensure that the Fund’s installment payment plan[:
119+ A. THE PERCENTAGE OF TH E INITIAL PREMIUM 14
120+PAYMENT IN COMPA RISON TO THE TOTAL P REMIUM UNDER THE POL ICY; 15
115121
116- 1. requires an insured’s initial premium payment to be no
117-less than:
122+ B. THE NUMBER OF INSTAL LMENT PREMIUM PAYMENTS 16
123+ACCEPTED ON A POLICY UNDER THE INSTALLMEN T PAYMENT PLAN ; AND 17
118124
119- A. for a total annual premium of less than $3,000, 25% of the
120-total annual premium; and
125+ C. THE OVERALL AFFORDAB ILITY OF THE INSTALL MENT 18
126+PAYMENT PLAN IN COMPARISON T O OTHER PAYMENT OPTI ONS AVAILABLE TO THE 19
127+POLICYHOLDER ; AND 20
121128
122- B. for a total annual premium of $3,000 or more, 20% of the
123-total annual premium;
129+ 2. ensure that the Fund’s installment payment plan[: 21
124130
125- 2. adjusts the amount of the total annual premium used to
126-determine the initial premium payment under item 1 of this subparagraph on October 1 of
127-each year using data from the U.S. Government Bureau of Labor Statistics motor vehicle
128-insurance expenditure category of the Consumer Price Index for all urban consumers;
131+ 1. requires an insured’s initial premium payment to be no 22
132+less than: 23
129133
130- 3. is structured and administered to ensure that the Fund at
131-no time provides insurance coverage to an insured for a period during which the Fund has
132-not received the actuarially justified premium payment;
134+ A. for a total annual premium of less than $3,000, 25% of the 24
135+total annual premium; and 25
133136
134- 4. offers no more than:
137+ B. for a total annual premium of $3,000 or more, 20% of the 26
138+total annual premium; 27
135139
136- A. for a policy under item 1A of this subparagraph, six
137-installment payments on the 12–month policy; and
140+ 2. adjusts the amount of the total annual premium used to 28
141+determine the initial premium payment under item 1 of this subparagraph on October 1 of 29
142+each year using data from the U.S. Government Bureau of Labor Statistics motor vehicle 30
143+insurance expenditure category of the Consumer Price Index for all urban consumers; 31
138144
139- B. for a policy under item 1B of this subparagraph, eight
140-installment payments on the 12–month policy;
145+ 3. is structured and administered to ensure that the Fund at 32 4 SENATE BILL 278
141146
142- 5. allows insureds to make an initial premium payment and
143-installment payments in any commercially acceptable form; and
144- Ch. 453 2022 LAWS OF MARYLAND
145147
146-– 4 –
147- 6. allows the Fund to impose an administrative processing
148-fee on insureds participating in the installment plan of no more than $8 per installment
149-payment] MEETS THE REQUIREMEN TS OF § 27–216 OF THIS ARTICLE .
148+no time provides insurance coverage to an insured for a period during which the Fund has 1
149+not received the actuarially justified premium payment; 2
150150
151- (2) The Fund may not discriminate among insureds by charging different
152-premiums to insureds who select, as a payment option, the Fund’s installment payment
153-plan instead of a premium finance agreement.
151+ 4. offers no more than: 3
154152
155- (3) In determining commissions paid to a fund producer, the Fund may not
156-consider whether the fund producer placed an insured in an installment payment plan.
153+ A. for a policy under item 1A of this subparagraph, six 4
154+installment payments on the 12–month policy; and 5
157155
158- (4) (i) In accordance with this paragraph, written and electronic
159-communications, including the Fund’s Web site, affecting the placement of coverage by the
160-Fund or a fund producer shall include a statement, on a form approved by the
161-Commissioner, advising an applicant or an insured of the payment options available to the
162-applicant or insured.
156+ B. for a policy under item 1B of this subparagraph, eight 6
157+installment payments on the 12–month policy; 7
163158
164- (ii) The statement shall state that the applicant or insured has the
165-following payment options:
159+ 5. allows insureds to make an initial premium payment and 8
160+installment payments in any commercially acceptable form; and 9
166161
167- 1. the Fund’s installment payment plan;
162+ 6. allows the Fund to impose an administrative processing 10
163+fee on insureds participating in the installment plan of no more than $8 per installment 11
164+payment] MEETS THE REQUIREMEN TS OF § 27–216 OF THIS ARTICLE . 12
168165
169- 2. a premium finance agreement; or
166+ (2) The Fund may not discriminate among insureds by charging different 13
167+premiums to insureds who select, as a payment option, the Fund’s installment payment 14
168+plan instead of a premium finance agreement. 15
170169
171- 3. payment of the policy in full.
170+ (3) In determining commissions paid to a fund producer, the Fund may not 16
171+consider whether the fund producer placed an insured in an installment payment plan. 17
172172
173- (iii) The statement shall be included on written or electronic
174-communications at the time the applicant or insured:
173+ (4) (i) In accordance with this paragraph, written and electronic 18
174+communications, including the Fund’s Web site, affecting the placement of coverage by the 19
175+Fund or a fund producer shall include a statement, on a form approved by the 20
176+Commissioner, advising an applicant or an insured of the payment options available to the 21
177+applicant or insured. 22
175178
176- 1. is issued a new policy; or
179+ (ii) The statement shall state that the applicant or insured has the 23
180+following payment options: 24
177181
178- 2. is issued a reissuance, rewrite, or renewal of an existing
179-policy.
182+ 1. the Fund’s installment payment plan; 25
180183
181- (iv) The statement shall state that the applicant or insured should
182-consult a fund producer who will fully describe the terms of each payment option.
184+ 2. a premium finance agreement; or 26
183185
184- (H) (1) IF THE FUND MAKES A CHANGE TO IT S PLAN FOR ACCEPTING
185-PREMIUMS ON AN INSTA LLMENT PAYMENT BASIS , WITHIN 90 DAYS AFTER THE
186-CHANGE, THE COMMISSIONER SHALL SUBMIT A REPORT TO THE GENERAL
187-ASSEMBLY PROVIDING THE REASON FOR THE C HANGE.
186+ 3. payment of the policy in full. 27
188187
189- (2) THE REPORT REQUIRED UNDER PARAG RAPH (1) OF THIS
190-SUBSECTION SHALL:
191- LAWRENCE J. HOGAN, JR., Governor Ch. 453
188+ (iii) The statement shall be included on written or electronic 28
189+communications at the time the applicant or insured: 29
192190
193-– 5 –
194- (I) INCLUDE THE EFFECT T HE CHANGE WILL HAVE ON THE
195-REQUIRED FACTORS FOR CONSIDERATION UNDER (G)(1)(II)1 OF THIS SECTION; AND
191+ 1. is issued a new policy; or 30
196192
197- (II) BE SUBMITTED IN ACCO RDANCE WITH § 2–1257 OF THE
198-STATE GOVERNMENT ARTICLE.
193+ 2. is issued a reissuance, rewrite, or renewal of an existing 31
194+policy. 32 SENATE BILL 278 5
199195
200-27–216.
201196
202- (a) A person may not willfully collect a premium or charge for insurance if the
203-insurance is not then provided, or is not in due course to be provided subject to acceptance
204-of the risk by the insurer, in a policy issued by an insurer as authorized by this article.
205197
206- (b) (1) A person may not willfully collect a premium or charge for insurance
207-that:
198+ (iv) The statement shall state that the applicant or insured should 1
199+consult a fund producer who will fully describe the terms of each payment option. 2
208200
209- (i) exceeds or is less than the premium or charge applicable to that
210-insurance under the applicable classifications and rates as filed with and approved by the
211-Commissioner; or
201+ (H) (1) IF THE FUND MAKES A CHANGE TO IT S PLAN FOR ACCEPTING 3
202+PREMIUMS ON AN INSTA LLMENT PAYMENT BASIS , WITHIN 90 DAYS AFTER THE 4
203+CHANGE, THE COMMISSIONER SHALL SUBMIT A REPORT TO THE GENERAL 5
204+ASSEMBLY PROVIDING THE REASON FOR THE C HANGE. 6
212205
213- (ii) if classifications, premiums, or rates are not required by this
214-article to be filed with and approved by the Commissioner, exceeds or is less than the
215-premium or charge specified in the policy and set by the insurer.
206+ (2) THE REPORT REQUIRED UNDER PARAG RAPH (1) OF THIS 7
207+SUBSECTION SHALL : 8
216208
217- (2) Paragraph (1) of this subsection does not prohibit:
209+ (I) INCLUDE THE EFFECT T HE CHANGE WILL HAVE ON THE 9
210+REQUIRED FACTORS FOR CONSIDERATION UNDER (G)(1)(II)1 OF THIS SECTION; AND 10
218211
219- (i) a surplus lines broker that holds a certificate of qualification
220-under Title 3, Subtitle 3 of this article from charging and collecting applicable State and
221-federal taxes in addition to the required premium;
212+ (II) BE SUBMITTED IN ACCO RDANCE WITH § 2–1257 OF THE 11
213+STATE GOVERNMENT ARTICLE. 12
222214
223- (ii) a life insurer from charging and collecting the amount actually
224-expended for a medical examination of an applicant for life insurance or reinstatement of a
225-policy of life insurance;
215+27–216. 13
226216
227- (iii) an insurance producer from charging a fee, not exceeding 15% of
228-the premium, for services rendered in placing insurance in an insurer if commissions are
229-not payable by the insurer;
217+ (a) A person may not willfully collect a premium or charge for insurance if the 14
218+insurance is not then provided, or is not in due course to be provided subject to acceptance 15
219+of the risk by the insurer, in a policy issued by an insurer as authorized by this article. 16
230220
231- (iv) an insurer from paying commissions to licensed insurance
232-producers on a variable basis on policies issued to qualified exempt commerci al
233-policyholders, as defined in § 11–206 of this article, if:
221+ (b) (1) A person may not willfully collect a premium or charge for insurance 17
222+that: 18
234223
235- 1. the payment of the commission to the insurance producer
236-on a variable basis results in a lower total cost of the policy to the qualified exempt
237-policyholder; and
224+ (i) exceeds or is less than the premium or charge applicable to that 19
225+insurance under the applicable classifications and rates as filed with and approved by the 20
226+Commissioner; or 21
238227
239- 2. the insurance producer receiving the commission has Ch. 453 2022 LAWS OF MARYLAND
228+ (ii) if classifications, premiums, or rates are not required by this 22
229+article to be filed with and approved by the Commissioner, exceeds or is less than the 23
230+premium or charge specified in the policy and set by the insurer. 24
240231
241-– 6 –
242-agreed to the specific level of commission to be paid on the policy; or
232+ (2) Paragraph (1) of this subsection does not prohibit: 25
243233
244- (v) a fund producer from charging and collecting, as actual expenses
245-incurred in placing automobile insurance with the Maryland Automobile Insurance Fund:
234+ (i) a surplus lines broker that holds a certificate of qualification 26
235+under Title 3, Subtitle 3 of this article from charging and collecting applicable State and 27
236+federal taxes in addition to the required premium; 28
246237
247- 1. a maximum charge of $25 plus $1 more than the actual
248-charge by the Motor Vehicle Administration for a driving record required to be presented
249-with the application, unless otherwise provided by the Fund; or
238+ (ii) a life insurer from charging and collecting the amount actually 29
239+expended for a medical examination of an applicant for life insurance or reinstatement of a 30
240+policy of life insurance; 31
250241
251- 2. the amount provided in subsection (e) of this section.
242+ (iii) an insurance producer from charging a fee, not exceeding 15% of 32 6 SENATE BILL 278
252243
253- (3) (i) Subject to subparagraphs (ii), (iii), (iv), and (v) of this paragraph,
254-paragraph (1) of this subsection does not prohibit an authorized insurer OR THE
255-MARYLAND AUTOMOBILE INSURANCE FUND from charging and collecting, if approved
256-by the Commissioner, reasonable installment fees or reasonable fees for late payment of
257-premiums by policyholders or both.
258244
259- (ii) The Commissioner:
245+the premium, for services rendered in placing insurance in an insurer if commissions are 1
246+not payable by the insurer; 2
260247
261- 1. shall review administrative expenses submitted by an
262-authorized insurer OR THE MARYLAND AUTOMOBILE INSURANCE FUND that are
263-associated with late payments or installment payments, including the cost incurred by an
264-authorized insurer or a vendor of the authorized insurer to accept late payments or
265-installment payments by credit card, debit card, electronic funds transfer, or electronic
266-check payment; and
248+ (iv) an insurer from paying commissions to licensed insurance 3
249+producers on a variable basis on policies issued to qualified exempt commercial 4
250+policyholders, as defined in § 11–206 of this article, if: 5
267251
268- 2. may approve a late fee or installment fee not to exceed $10.
252+ 1. the payment of the commission to the insurance producer 6
253+on a variable basis results in a lower total cost of the policy to the qualified exempt 7
254+policyholder; and 8
269255
270- (iii) A late fee may not be imposed:
256+ 2. the insurance producer receiving the commission has 9
257+agreed to the specific level of commission to be paid on the policy; or 10
271258
272- 1. during any grace period required by law or regulation on
273-a policy of insurance; or
259+ (v) a fund producer from charging and collecting, as actual expenses 11
260+incurred in placing automobile insurance with the Maryland Automobile Insurance Fund: 12
274261
275- 2. if no grace period is required by law or regulation on a
276-policy of insurance, until 2 business days after the date the payment amount becomes due.
262+ 1. a maximum charge of $25 plus $1 more than the actual 13
263+charge by the Motor Vehicle Administration for a driving record required to be presented 14
264+with the application, unless otherwise provided by the Fund; or 15
277265
278- (iv) An authorized insurer OR THE MARYLAND AUTOMOBILE
279-INSURANCE FUND shall credit each payment received from an insured to the premium
280-owed by the insured before crediting the payment to a late fee or installment fee owed by
281-the insured.
266+ 2. the amount provided in subsection (e) of this section. 16
282267
283- (v) A policy of insurance may not be canceled for the failure to pay a
284-single late fee or single installment fee.
268+ (3) (i) Subject to subparagraphs (ii), (iii), (iv), and (v) of this paragraph, 17
269+paragraph (1) of this subsection does not prohibit an authorized insurer OR THE 18
270+MARYLAND AUTOMOBILE INSURANCE FUND from charging and collecting, if approved 19
271+by the Commissioner, reasonable installment fees or reasonable fees for late payment of 20
272+premiums by policyholders or both. 21
285273
286- (4) (i) Subject to subparagraphs (ii) and (iii) of this paragraph,
287-paragraph (1) of this subsection does not prohibit an insurance producer from charging and LAWRENCE J. HOGAN, JR., Governor Ch. 453
274+ (ii) The Commissioner: 22
288275
289-– 7 –
290-collecting from an insured actual expenses incurred by the insurance producer for payment
291-of the premium for a policy by use of a credit card.
276+ 1. shall review administrative expenses submitted by an 23
277+authorized insurer OR THE MARYLAND AUTOMOBILE INSURANCE FUND that are 24
278+associated with late payments or installment payments, including the cost incurred by an 25
279+authorized insurer or a vendor of the authorized insurer to accept late payments or 26
280+installment payments by credit card, debit card, electronic funds transfer, or electronic 27
281+check payment; and 28
292282
293- (ii) Any point of service credit card expenses may not be considered
294-premium for any purpose under this paragraph.
283+ 2. may approve a late fee or installment fee not to exceed $10. 29
295284
296- (iii) An insurance producer that accepts alternative payment
297-methods for premiums shall disclose fully to the insured or prospective insured:
285+ (iii) A late fee may not be imposed: 30
298286
299- 1. the availability of all payment methods accepted by the
300-insurer or insurance producer; and
287+ 1. during any grace period required by law or regulation on 31
288+a policy of insurance; or 32
301289
302- 2. any charge for actual expenses incurred by the insurance
303-producer for payment of a premium by use of a credit card.
290+ 2. if no grace period is required by law or regulation on a 33
291+policy of insurance, until 2 business days after the date the payment amount becomes due. 34 SENATE BILL 278 7
304292
305- (5) (i) Paragraph (1) of this subsection does not prohibit an authorized
306-motor vehicle insurer or the Maryland Automobile Insurance Fund from charging and
307-collecting a reasonable fee approved by the Commissioner under subparagraph (iii) of this
308-paragraph for the reinstatement of a private passenger motor vehicle liability insurance
309-policy in accordance with § 19–519 of this article.
310293
311- (ii) Paragraph (1) of this subsection does not prohibit a licensed
312-insurance producer or a fund producer from charging and collecting a reasonable fee
313-approved by the Commissioner under subparagraph (iii) of this paragraph for the
314-reinstatement of a private passenger motor vehicle liability insurance policy in accordance
315-with § 19–519 of this article.
316294
317- (iii) The Commissioner:
295+ (iv) An authorized insurer OR THE MARYLAND AUTOMOBILE 1
296+INSURANCE FUND shall credit each payment received from an insured to the premium 2
297+owed by the insured before crediting the payment to a late fee or installment fee owed by 3
298+the insured. 4
318299
319- 1. shall review the administrative expenses submitted by an
320-authorized motor vehicle insurer or the Maryland Automobile Insurance Fund that are
321-associated with reinstatements under § 19–519 of this article; and
300+ (v) A policy of insurance may not be canceled for the failure to pay a 5
301+single late fee or single installment fee. 6
322302
323- 2. may approve a reinstatement fee not to exceed:
303+ (4) (i) Subject to subparagraphs (ii) and (iii) of this paragraph, 7
304+paragraph (1) of this subsection does not prohibit an insurance producer from charging and 8
305+collecting from an insured actual expenses incurred by the insurance producer for payment 9
306+of the premium for a policy by use of a credit card. 10
324307
325- A. $10 to be charged and collected by the insurer or the Fund;
326-and
308+ (ii) Any point of service credit card expenses may not be considered 11
309+premium for any purpose under this paragraph. 12
327310
328- B. $15 to be charged and collected by the insurance producer
329-or the fund producer.
311+ (iii) An insurance producer that accepts alternative payment 13
312+methods for premiums shall disclose fully to the insured or prospective insured: 14
330313
331- (c) An insurer may not raise the policy limits of coverage, if the effect could be an
332-increase in the premium without the prior consent of the insured.
314+ 1. the availability of all payment methods accepted by the 15
315+insurer or insurance producer; and 16
333316
334- SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect
335-October 1, 2022. Ch. 453 2022 LAWS OF MARYLAND
317+ 2. any charge for actual expenses incurred by the insurance 17
318+producer for payment of a premium by use of a credit card. 18
336319
337-– 8 –
320+ (5) (i) Paragraph (1) of this subsection does not prohibit an authorized 19
321+motor vehicle insurer or the Maryland Automobile Insurance Fund from charging and 20
322+collecting a reasonable fee approved by the Commissioner under subparagraph (iii) of this 21
323+paragraph for the reinstatement of a private passenger motor vehicle liability insurance 22
324+policy in accordance with § 19–519 of this article. 23
338325
339-Approved by the Governor, May 16, 2022.
326+ (ii) Paragraph (1) of this subsection does not prohibit a licensed 24
327+insurance producer or a fund producer from charging and collecting a reasonable fee 25
328+approved by the Commissioner under subparagraph (iii) of this paragraph for the 26
329+reinstatement of a private passenger motor vehicle liability insurance policy in accordance 27
330+with § 19–519 of this article. 28
331+
332+ (iii) The Commissioner: 29
333+
334+ 1. shall review the administrative expenses submitted by an 30
335+authorized motor vehicle insurer or the Maryland Automobile Insurance Fund that are 31
336+associated with reinstatements under § 19–519 of this article; and 32
337+
338+ 2. may approve a reinstatement fee not to exceed: 33
339+
340+ A. $10 to be charged and collected by the insurer or the Fund; 34 8 SENATE BILL 278
341+
342+
343+and 1
344+
345+ B. $15 to be charged and collected by the insurance producer 2
346+or the fund producer. 3
347+
348+ (c) An insurer may not raise the policy limits of coverage, if the effect could be an 4
349+increase in the premium without the prior consent of the insured. 5
350+
351+ SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 6
352+October 1, 2022. 7
353+
354+
355+
356+Approved:
357+________________________________________________________________________________
358+ Governor.
359+________________________________________________________________________________
360+ President of the Senate.
361+________________________________________________________________________________
362+ Speaker of the House of Delegates.