Maryland 2023 Regular Session

Maryland Senate Bill SB816 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	sb0816
6	6
7	7	SENATE BILL 816
8	8	C4 3lr3051
9	9	CF HB 314
10	10	By: Senator A. Washington
11	11	Introduced and read first time: February 6, 2023
12	12	Assigned to: Finance
13	13
14	14	A BILL ENTITLED
15	15
16	16	AN ACT concerning 1
17	17
18	18	Motor Vehicle Insurance – Rate Filings – Trade Secrets and Factors Used to 2
19	19	Establish Rates 3
20	20
21	21	FOR the purpose of repealing certain confidentiality protections for proprietary 4
22	22	rate–related information; prohibiting an insurer that uses territory as a factor in 5
23	23	establishing automobile insurance rates from using more than a certain number of 6
24	24	territories; and generally relating to motor vehicle insurance. 7
25	25
26	26	BY repealing and reenacting, with amendments, 8
27	27	Article – Insurance 9
28	28	Section 11–307 and 11–319 10
29	29	Annotated Code of Maryland 11
30	30	(2017 Replacement Volume and 2022 Supplement) 12
31	31
32	32	SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
33	33	That the Laws of Maryland read as follows: 14
34	34
35	35	Article – Insurance 15
36	36
37	37	11–307. 16
38	38
39	39	(a) (1) Except as otherwise provided in this subsection, each authorized 17
40	40	insurer and each rating organization that has been designated by an insurer for the filing 18
41	41	of rates under subsection (b) of this section shall file with the Commissioner all rates and 19
42	42	supplementary rate information and all changes and amendments of rates and 20
43	43	supplementary information made by it for use in the State on or before the date they become 21
44	44	effective. 22
45	45
46	46	(2) Rates and supplementary rate information need not be filed for inland 23
47	47	marine risks that by general custom are not written according to manual rules or rating 24
48	48	plans. 25 2 SENATE BILL 816
49	49
50	50
51	51
52	52	(b) (1) An insurer may itself establish rates and supplementary rate 1
53	53	information based on the factors in § 11–306 of this subtitle. 2
54	54
55	55	(2) Except for workers’ compensation insurance rates, an insurer may use 3
56	56	rates and supplementary rate information prepared and filed with the Commissioner by a 4
57	57	rating organization of which it is a member or subscriber, with average loss factors or 5
58	58	expense factors determined by the rating organization or with modification for its own 6
59	59	expense and loss experience as the credibility of that experience allows. 7
60	60
61	61	(3) If an insurer uses rates and supplementary rate information prepared 8
62	62	by a rating organization: 9
63	63
64	64	(i) the insurer shall notify the Commissioner that it uses rates and 10
65	65	supplementary rate information prepared and filed with the Commissioner by a designated 11
66	66	rating organization of which it is a member or subscriber and shall provide the 12
67	67	Commissioner with information about modifications of those rates and supplementary rate 13
68	68	information that is necessary to inform the Commissioner fully; and 14
69	69
70	70	(ii) subject to modifications filed by the insurer, the insurer’s rates 15
71	71	and supplementary rate information shall be those filed periodically by the rating 16
72	72	organization, including any amendments to those filings. 17
73	73
74	74	(c) (1) [In this subsection, “proprietary rate–related information”: 18
75	75
76	76	(i) means a rating model; and 19
77	77
78	78	(ii) includes the formulas, algorithms, analyses, and specific weights 20
79	79	given to variables used in the model. 21
80	80
81	81	(2) (i) Except as provided in paragraph (3) of this subsection, each] 22
82	82	EACH filing and any supporting information filed under this subtitle shall be open to public 23
83	83	inspection as soon as filed. 24
84	84
85	85	[(ii)] (2) On request and payment of a reasonable charge, a person 25
86	86	may obtain copies of a filing and any supporting information. 26
87	87
88	88	[(3) (i) Information that an insurer files with the Commissioner and 27
89	89	identifies as proprietary rate–related information: 28
90	90
91	91	1. constitutes a trade secret and confidential commercial 29
92	92	information; 30
93	93
94	94	2. subject to subparagraph (ii) of this paragraph and except 31
95	95	as provided in subparagraph (iii) of this paragraph, shall be kept confidential by the 32
96	96	Commissioner; and 33
97	97	SENATE BILL 816 3
98	98
99	99
100	100	3. is not subject to subpoena served on the Commissioner or 1
101	101	any recipient of proprietary rate–related information under subparagraph (iii) of this 2
102	102	paragraph. 3
103	103
104	104	(ii) 1. Except as provided in subsubparagraph 2 of this 4
105	105	subparagraph, if the Commissioner determines that some or all of the material that an 5
106	106	insurer files and identifies as proprietary rate–related information does not constitute 6
107	107	proprietary rate–related information as defined in paragraph (1) of this subsection, the 7
108	108	Commissioner shall: 8
109	109
110	110	A. give the insurer written notice of that determination; and 9
111	111
112	112	B. make the material open to public inspection 10 business 10
113	113	days after the date the Commissioner gives notice of the determination to the insurer. 11
114	114
115	115	2. The Commissioner may not disclose the material if: 12
116	116
117	117	A. the insurer has not put the rate filing into effect; and 13
118	118
119	119	B. within the time period described in subsubparagraph 1B 14
120	120	of this subparagraph, the insurer withdraws the rate filing and notifies the Commissioner 15
121	121	that the rate filing is withdrawn. 16
122	122
123	123	(iii) This paragraph does not prohibit the Commissioner from 17
124	124	disclosing an insurer’s proprietary rate–related information: 18
125	125
126	126	1. in furtherance of a regulatory or legal action that the 19
127	127	Commissioner undertakes in performing the Commissioner’s duties under this article; 20
128	128
129	129	2. if the recipient enters into a written agreement to 21
130	130	maintain the confidentiality of the proprietary rate–related information, to: 22
131	131
132	132	A. an outside consultant that the Commissioner engages to 23
133	133	assist the Commissioner in reviewing the insurer’s rate filing; 24
134	134
135	135	B. another state’s insurance regulatory agency; 25
136	136
137	137	C. the National Association of Insurance Commissioners; or 26
138	138
139	139	D. a state or federal law enforcement authority, including the 27
140	140	United States Department of Justice and the Maryland Attorney General, if acting in a law 28
141	141	enforcement capacity; or 29
142	142
143	143	3. if the proprietary rate–related information is part of a 30
144	144	homeowner’s insurance rate filing, to the People’s Insurance Counsel Division acting under 31
145	145	§ 6–306 of the State Government Article. 32
146	146	4 SENATE BILL 816
147	147
148	148
149	149	(iv) 1. Except as provided in subsubparagraph 2 of this 1
150	150	subparagraph, the People’s Insurance Counsel Division shall maintain the confidentiality 2
151	151	of proprietary rate–related information disclosed to the Division under subparagraph (iii)3 3
152	152	of this paragraph. 4
153	153
154	154	2. The People’s Insurance Counsel Division may disclose 5
155	155	proprietary rate–related information to an outside consultant that the Division engages to 6
156	156	assist the Division in reviewing a homeowner’s insurance rate filing, provided that the 7
157	157	outside consultant enters into a written agreement to maintain the confidentiality of the 8
158	158	proprietary rate–related information. 9
159	159
160	160	(v) The Commissioner shall notify the insurer in writing at least 10 10
161	161	business days before the Commissioner discloses any of the insurer’s proprietary 11
162	162	rate–related information under subparagraph (iii) of this paragraph. 12
163	163
164	164	(vi) In addition to any other rights an insurer may have under any 13
165	165	other applicable law, the insurer may seek to have any disclosure of the insurer’s 14
166	166	proprietary rate–related information under subparagraph (iii)1 of this paragraph be made 15
167	167	under seal or other protection of confidentiality. 16
168	168
169	169	(vii) There is no waiver of any applicable privilege or claim of 17
170	170	confidentiality with regard to any proprietary rate–related information that is disclosed 18
171	171	under subparagraph (iii) of this paragraph. 19
172	172
173	173	(4) This subsection may not be construed to: 20
174	174
175	175	(i) authorize an insurer to designate the rating factors used to 21
176	176	calculate the premium as proprietary rate–related information; or 22
177	177
178	178	(ii) authorize the Commissioner to keep the rating factors 23
179	179	confidential.] 24
180	180
181	181	(d) (1) The Commissioner may investigate and determine whether or not rates 25
182	182	in the State are excessive, inadequate, or unfairly discriminatory. 26
183	183
184	184	(2) In an investigation and determination under this subsection, the 27
185	185	Commissioner shall give due consideration to the factors specified in § 11–306 of this 28
186	186	subtitle. 29
187	187
188	188	11–319. 30
189	189
190	190	(A) AN INSURER THAT USES TERRITORY AS A FACTO R IN ESTABLISHING 31
191	191	AUTOMOBILE INSURANCE RATES MAY NOT USE MO RE THAN FIVE TERRITO RIES. 32
192	192
193	193	(B) An insurer that uses territory as a factor in establishing automobile insurance 33
194	194	rates shall submit a statement to the Commissioner certifying that: 34
195	195	SENATE BILL 816 5
196	196
197	197
198	198	(1) the territories used by the insurer have been reviewed within the 1
199	199	previous 3 years; [and] 2
200	200
201	201	(2) use of the territories is actuarially justified; AND 3
202	202
203	203	(3) THE INSURER DID NOT USE MORE THAN FIVE T ERRITORIES. 4
204	204
205	205	SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 5
206	206	policies of motor vehicle insurance offered, issued, or delivered in the State on or after 6
207	207	January 1, 2024. 7
208	208
209	209	SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 8
210	210	October 1, 2023. 9
211	211