WES MOORE, Governor Ch. 38
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Chapter 38
(Senate Bill 725)
AN ACT concerning
Insurance – Product and Service Offerings
FOR the purpose of authorizing certain insurers, nonprofit health service plans, and health
maintenance organizations to offer and provide certain products or services in
conjunction with a policy at no charge or at a discounted price under certain
circumstances; prohibiting certain insurers, nonprofit health service plans, and
health maintenance organizations from increasing a premium or denying a claim
based on a certain action by a policyholder; and generally relating to programs and
services offered by insurers, nonprofit health service plans, and health maintenance
organizations.
BY repealing and reenacting, with amendments,
Article – Insurance
Section 27–209 and 27–212
Annotated Code of Maryland
(2017 Replacement Volume and 2022 Supplement)
BY repealing and reenacting, without amendments,
Article – Insurance
Section 27–210 and 27–211
Annotated Code of Maryland
(2017 Replacement Volume and 2022 Supplement)
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND,
That the Laws of Maryland read as follows:
Article – Insurance
27–209.
(a) Except as otherwise expressly provided by law, a person, including a health
maintenance organization, may not knowingly:
(1) allow, make, or offer to make a contract of life insurance or health
insurance or an annuity contract or an agreement as to the contract other than as plainly
expressed in the contract;
(2) pay, allow, give, or offer to pay, allow, or give directly or indirectly as
an inducement to the insurance or annuity:
(i) a rebate of premiums payable on the contract; Ch. 38 2023 LAWS OF MARYLAND
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(ii) a special favor or advantage in the dividends or other benefits
under the contract;
(iii) paid employment or a contract for services of any kind; or
(iv) any valuable consideration or other inducement not specified in
the contract;
(3) directly or indirectly give, sell, purchase, offer or agree to give, sell, or
purchase, or allow as inducement to the insurance or annuity or in connection with the
insurance or annuity, regardless of whether specified in the policy or contract, an
agreement that promises returns and profits, or stocks, bonds, or other securities, or a
present or contingent interest in or measured by stocks, bonds, or other securities, of an
insurer or other corporation, association, or partnership, or dividends or profits accrued or
to accrue on stocks, bonds, or other securities; or
(4) offer, promise, or give any valuable consideration not specified in the
contract, except for educational materials, promotional materials, or articles of
merchandise that cost no more than $50.
(b) A person may not make receipt of any educational materials, promotional
materials, or articles of merchandise under subsection (a)(4) of this section contingent on
the sale or purchase of insurance.
(C) (1) THIS SECTION DOES NOT PROHIBIT AN INSURER , A NONPROFIT
HEALTH SERVICE PLAN , OR A HEALTH MAINTENA NCE ORGANIZATION FRO M
OFFERING OR PROVIDIN G PRODUCTS OR SERVIC ES IN CONJUNCTION WI TH A POLICY
AT NO CHARGE OR AT A DISCOUNTED PRICE IF :
(I) 1. A. THE PRODUCTS OR SERVICES ARE OFFERED OR
PROVIDED TO EDUCATE PERSONS REGARDING , OR TO ASSESS, MONITOR, CONTROL,
OR PREVENT, RISK OF LOSS TO PERS ONS; AND
B. THE RISK OF LOSS TO PERSONS IS ASSOCIATE D WITH
RISKS INSURED AGAINS T BY THE POLICY OR I NSURANCE OR ANNUITY CONTRACT ; OR
2. THE PRODUCTS OR SERV ICES ARE:
A. SUBSTANTIALLY RELATE D TO THE INSURANCE
PROVIDED UNDER THE P OLICY OR CONTRACT ; OR
B. OFFERED OR PROVIDED TO ENHANCE THE HEALT H OF
THE INSURED OR BENEF ICIARY; AND
WES MOORE, Governor Ch. 38
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(II) THE OFFER OR P ROVISION OF PRODUCTS OR SERVICES IS
AVAILABLE TO ALL POL ICYHOLDERS THAT HAVE PURCHASED THE POLICY OR
CONTRACT ASSOCIATED WITH THE OFFER OR PR OVISION.
(2) AN INSURER, A NONPROFIT HEALTH S ERVICE PLAN, OR A HEALTH
MAINTENANCE ORGANIZA TION MAY INCLUDE AN OFFER OR A PROVISION OF
PRODUCTS OR SERVICES UNDER THIS SUBSECTIO N IN AN APPLICABLE C ONTRACT
OR FORM OR RATE FILI NG.
(3) (I) IF THE OFFER OR PROVI SION OF SPECIFIC PRO DUCTS OR
SERVICES UNDER THIS SUBSECTION IS INCLUD ED IN ANY POLICY OF INSURANCE,
HEALTH MAINTENANCE ORGANIZA TION CONTRACT , NONPROFIT HEALTH SER VICE
PLAN, OR ANNUITY CONTRACT , THE PRODUCTS OR SERV ICES MAY NOT BE
DISCONTINUED DURING THE TERM OF THE POLI CY OR CONTRACT UNLES S
DISCONTINUATION OF T HE PRODUCT OR SERVIC ES IS:
1. CONSENTED TO IN WRITING BY THE POLIC YHOLDER;
OR
2. THE RESULT OF A UNIF ORM MODIFICATION UND ER §
15–1212, § 15–1309, OR § 15–1409 OF THIS ARTICLE.
(II) THIS PARAGRAPH DOES N OT PROHIBIT A CARRIE R FROM
TERMINATING A CONTRA CT AS OTHERWISE AUTH ORIZED UNDER THIS AR TICLE.
(4) AN INSURER, A NONPROFIT HEALTH S ERVICE PLAN, OR A HEALTH
MAINTENANCE ORGANIZA TION MAY NOT INCREAS E THE PREMIUM OR DEN Y A CLAIM
OF A POLICYHOLDER IF THE POLICYHOLDER ACC EPTS, REJECTS, USES, OR FAILS TO
USE A PRODUCT OR SER VICE UNDER THIS SUBS ECTION.
(5) THE (I) SUBJECT TO SUBPARAGRA PH (II) OF THIS
PARAGRAPH , THE COMMISSIONER MAY DETE RMINE BY REGULATION THE TYPES OF
PRODUCTS OR SERVICES THAT MEET THE CRITER IA IN PARAGRAPH (1) OF THIS
SUBSECTION.
(II) A PRODUCT OR SERVICE O FFERED OR PROVIDED IN
CONJUNCTION WITH AN INSURANCE POLICY OR ANNUITY CONTRACT THA T IS
PRIMARILY DESIGNED T O ENHANCE FINANCIAL WELLNESS SHALL BE AL LOWED IF
THE COMMISSIONER DETERMIN ES THAT THE PRODUCT OR SERVICE INCLUDES AN
ENHANCEMENT TO THE F INANCIAL PROTECTION COMPONENT OF THE INSUR ANCE
POLICY OR ANNUITY CO NTRACT.
27–210.
Ch. 38 2023 LAWS OF MARYLAND
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(a) Sections 27–208 and 27–209 of this subtitle may not be construed to include
within the definition of discrimination or rebates any of the practices set forth in this
section.
(b) For a contract of life insurance or an annuity contract, it is not discrimination
or a rebate to pay bonuses to policyholders or otherwise abate their premiums wholly or
partly out of the surplus accumulated from nonparticipating insurance, if the bonuses or
abatement of premiums is fair, equitable to, and in the best interest of policyholders.
(c) For policies of life insurance or health insurance issued on the industrial debit,
preauthorized check, bank draft, or similar plans, it is not discrimination or a rebate to
make an allowance to policyholders who have continuously for a specified period made
premium payments directly to an office of the insurer or by preauthorized check, bank draft,
or similar plans in an amount that fairly represents the savings in collection expense.
(d) It is not discrimination or a rebate to readjust the rate of premium for a group
policy based on the loss or expense experience under the policy, at the end of any policy
year, retroactive only for that policy year.
(e) It is not discrimination or a rebate to reduce the premium rate for policies of
large amount, if the reduction does not exceed savings in issuance and administrative
expenses reasonably attributable to policies of large amount as compared with policies of
similar plan issued in smaller amounts.
(f) It is not discrimination or a rebate to issue policies of life insurance or health
insurance or annuity contracts on a salary savings or payroll deduction plan or other
distribution plan at a reduced rate reasonably commensurate with the savings made by use
of the plan.
(g) It is not discrimination or a rebate to issue policies of health insurance that
provide for increases in benefits to policyholders who maintain their policies continuously
in force without lapse for specified periods.
(h) (1) In this subsection, “wellness program” means a program that:
(i) meets the requirements of a participatory wellness program or a
health–contingent wellness program under § 15–509 of this article; and
(ii) is provided as a benefit outside of the health insurance or health
maintenance organization contract.
(2) It is not discrimination or a rebate for a carrier to provide reasonable
incentives to an individual who is an insured, a subscriber, or a member for participation
in a wellness program offered by the carrier.
(3) Any incentive offered for participation in a wellness program: WES MOORE, Governor Ch. 38
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(i) shall be reasonably related to the wellness program; and
(ii) may not have a value that exceeds any limit established in
regulations adopted by the Commissioner.
(4) The Commissioner shall adopt regulations to implement the provisions
of this subsection.
27–211.
(a) This section does not apply to:
(1) insurance on the life of a debtor in connection with a specific loan or
other credit transaction;
(2) insurance on a debtor that provides indemnity for payments that are
due on a specific loan or other credit transaction while the debtor is disabled as defined in
the policy; or
(3) life insurance or an annuity used to fund a pre–need contract as defined
in § 7–101 of the Health Occupations Article or a preneed burial contract as defined in §
5–701 of the Business Regulation Article.
(b) An insurer may not directly or indirectly, or by an insurance producer or
representative of the insurer, participate in a plan to offer or effect a kind or kinds of life
insurance, health insurance, or annuities in the State as an inducement to, or in
combination with, the purchase by the public of goods, securities, commodities, services or
subscriptions to periodicals.
27–212.
(a) This section does not apply to life insurance, health insurance, and annuities.
(b) Except to the extent provided for in an applicable filing with the
Commissioner as provided by law, an insurer, employee or representative of an insurer or
insurance producer may not pay, allow, give, or offer to pay, allow, or give directly or
indirectly as an inducement to insurance or after insurance has become effective:
(1) a rebate, discount, abatement, credit, or reduction of the premium
stated in the policy;
(2) a special favor or advantage in the dividends or other benefits to accrue
on the policy; or
Ch. 38 2023 LAWS OF MARYLAND
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(3) any valuable consideration or other inducement not specified in the
policy.
(c) An insured named in a policy or an employee of the insured may not knowingly
receive or accept directly or indirectly a rebate, discount, abatement, credit, reduction of
premium, special favor, advantage, valuable consideration, or inducement described in
subsection (b) of this section.
(d) (1) Except as otherwise provided by law, a person may not knowingly offer,
promise, or give any valuable consideration not specified in the policy, except for
educational materials, promotional materials, or articles of merchandise that cost no more
than $50.
(2) A person may not make receipt of any educational materials,
promotional materials, or articles of merchandise under this subsection contingent on the
sale or purchase of insurance.
(e) (1) An insurer may not make or allow unfair discrimination between
insureds or properties having like insuring or risk characteristics in:
(i) the premium or rates charged for insurance;
(ii) the dividends or other benefits payable on the insurance; or
(iii) any of the other terms or conditions of the insurance.
(2) Notwithstanding any other provision of this section, an insurer may not
make or allow a differential in ratings, premium payments, or dividends for a reason based
on the sex, physical handicap, or disability of an applicant or policyholder unless there is
actuarial justification for the differential.
(f) (1) This section does not prohibit an insurer from:
[(1)] (I) paying commissions or other compensation to licensed insurance
producers;
[(2)] (II) paying commissions to licensed insurance producers on a
variable basis on policies issued to qualified exempt commercial policyholders, as defined
in § 11–206 of this article, if:
[(i)] 1. the payment of the commission to the insurance producer
on a variable basis results in a lower total cost of the policy to the qualified exempt
commercial policyholder; and
[(ii)] 2. the insurance producer receiving the commission has
agreed to the specific level of commission to be paid on the policy; [or] WES MOORE, Governor Ch. 38
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[(3)] (III) allowing or returning to its participating policyholders,
members, or subscribers lawful dividends, savings, or unabsorbed premium deposits[.]; OR
(IV) OFFERING OR PROVIDIN G PRODUCTS OR SERVIC ES IN
CONJUNCTION WITH A P OLICY AT NO CHARGE O R AT A DISCOUNTED PRICE TO
EDUCATE A PERSON REG ARDING, OR TO ASSESS, MONITOR, CONTROL, OR PREVENT,
RISK OF LOSS TO PERS ONS OR PROPERTY IF :
1. THE RISK OF LOSS TO PERSONS OR PROPERTY IS
ASSOCIATED WITH THE RISKS INSURED AGAINS T BY THE POLICY; AND
2. THE OFFER OR PROVISION O F PRODUCTS OR
SERVICES IS AVAILABL E TO ALL POLICYHOLDE RS THAT HAVE PURCHAS ED THE
POLICY ASSOCIATED WI TH THE OFFER OR PROV ISION.
(2) AN INSURER MAY INCLUD E IN AN APPLICABLE C ONTRACT OR
FORM OR RATE FILING AN OFFER OR A PROVIS ION OF PRODUCTS OR SERVICES
UNDER THIS SUBSECTIO N.
(3) AN INSURER MAY NOT IN CREASE THE PREMIUM O R DENY A CLAIM
OF A POLICYHOLDER IF THE POLICYHOLDER ACC EPTS, REJECTS, USES, OR FAILS TO
USE A PRODUCT OR SER VICE UNDER THIS SUBS ECTION.
(4) THE COMMISSIONER MA Y DETERMINE BY REGUL ATION THE
TYPES OF PRODUCTS OR SERVICES THAT MEET T HE CRITERIA IN PARAG RAPH (1)(IV)
OF THIS SUBSECTION .
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall be construed to
apply only prospectively and may not be applied or interpreted to have any effect on or
application to any policies, contracts, and health benefit plans issued, delivered, or renewed
in the State before the effective date of this Act.
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July
1, 2023.
Approved by the Governor, April 11, 2023.