EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
*sb0816*
SENATE BILL 816
C4 3lr3051
CF HB 314
By: Senator A. Washington
Introduced and read first time: February 6, 2023
Assigned to: Finance
A BILL ENTITLED
AN ACT concerning 1
Motor Vehicle Insurance – Rate Filings – Trade Secrets and Factors Used to 2
Establish Rates 3
FOR the purpose of repealing certain confidentiality protections for proprietary 4
rate–related information; prohibiting an insurer that uses territory as a factor in 5
establishing automobile insurance rates from using more than a certain number of 6
territories; and generally relating to motor vehicle insurance. 7
BY repealing and reenacting, with amendments, 8
Article – Insurance 9
Section 11–307 and 11–319 10
Annotated Code of Maryland 11
(2017 Replacement Volume and 2022 Supplement) 12
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 13
That the Laws of Maryland read as follows: 14
Article – Insurance 15
11–307. 16
(a) (1) Except as otherwise provided in this subsection, each authorized 17
insurer and each rating organization that has been designated by an insurer for the filing 18
of rates under subsection (b) of this section shall file with the Commissioner all rates and 19
supplementary rate information and all changes and amendments of rates and 20
supplementary information made by it for use in the State on or before the date they become 21
effective. 22
(2) Rates and supplementary rate information need not be filed for inland 23
marine risks that by general custom are not written according to manual rules or rating 24
plans. 25 2 SENATE BILL 816
(b) (1) An insurer may itself establish rates and supplementary rate 1
information based on the factors in § 11–306 of this subtitle. 2
(2) Except for workers’ compensation insurance rates, an insurer may use 3
rates and supplementary rate information prepared and filed with the Commissioner by a 4
rating organization of which it is a member or subscriber, with average loss factors or 5
expense factors determined by the rating organization or with modification for its own 6
expense and loss experience as the credibility of that experience allows. 7
(3) If an insurer uses rates and supplementary rate information prepared 8
by a rating organization: 9
(i) the insurer shall notify the Commissioner that it uses rates and 10
supplementary rate information prepared and filed with the Commissioner by a designated 11
rating organization of which it is a member or subscriber and shall provide the 12
Commissioner with information about modifications of those rates and supplementary rate 13
information that is necessary to inform the Commissioner fully; and 14
(ii) subject to modifications filed by the insurer, the insurer’s rates 15
and supplementary rate information shall be those filed periodically by the rating 16
organization, including any amendments to those filings. 17
(c) (1) [In this subsection, “proprietary rate–related information”: 18
(i) means a rating model; and 19
(ii) includes the formulas, algorithms, analyses, and specific weights 20
given to variables used in the model. 21
(2) (i) Except as provided in paragraph (3) of this subsection, each] 22
EACH filing and any supporting information filed under this subtitle shall be open to public 23
inspection as soon as filed. 24
[(ii)] (2) On request and payment of a reasonable charge, a person 25
may obtain copies of a filing and any supporting information. 26
[(3) (i) Information that an insurer files with the Commissioner and 27
identifies as proprietary rate–related information: 28
1. constitutes a trade secret and confidential commercial 29
information; 30
2. subject to subparagraph (ii) of this paragraph and except 31
as provided in subparagraph (iii) of this paragraph, shall be kept confidential by the 32
Commissioner; and 33
SENATE BILL 816 3
3. is not subject to subpoena served on the Commissioner or 1
any recipient of proprietary rate–related information under subparagraph (iii) of this 2
paragraph. 3
(ii) 1. Except as provided in subsubparagraph 2 of this 4
subparagraph, if the Commissioner determines that some or all of the material that an 5
insurer files and identifies as proprietary rate–related information does not constitute 6
proprietary rate–related information as defined in paragraph (1) of this subsection, the 7
Commissioner shall: 8
A. give the insurer written notice of that determination; and 9
B. make the material open to public inspection 10 business 10
days after the date the Commissioner gives notice of the determination to the insurer. 11
2. The Commissioner may not disclose the material if: 12
A. the insurer has not put the rate filing into effect; and 13
B. within the time period described in subsubparagraph 1B 14
of this subparagraph, the insurer withdraws the rate filing and notifies the Commissioner 15
that the rate filing is withdrawn. 16
(iii) This paragraph does not prohibit the Commissioner from 17
disclosing an insurer’s proprietary rate–related information: 18
1. in furtherance of a regulatory or legal action that the 19
Commissioner undertakes in performing the Commissioner’s duties under this article; 20
2. if the recipient enters into a written agreement to 21
maintain the confidentiality of the proprietary rate–related information, to: 22
A. an outside consultant that the Commissioner engages to 23
assist the Commissioner in reviewing the insurer’s rate filing; 24
B. another state’s insurance regulatory agency; 25
C. the National Association of Insurance Commissioners; or 26
D. a state or federal law enforcement authority, including the 27
United States Department of Justice and the Maryland Attorney General, if acting in a law 28
enforcement capacity; or 29
3. if the proprietary rate–related information is part of a 30
homeowner’s insurance rate filing, to the People’s Insurance Counsel Division acting under 31
§ 6–306 of the State Government Article. 32
4 SENATE BILL 816
(iv) 1. Except as provided in subsubparagraph 2 of this 1
subparagraph, the People’s Insurance Counsel Division shall maintain the confidentiality 2
of proprietary rate–related information disclosed to the Division under subparagraph (iii)3 3
of this paragraph. 4
2. The People’s Insurance Counsel Division may disclose 5
proprietary rate–related information to an outside consultant that the Division engages to 6
assist the Division in reviewing a homeowner’s insurance rate filing, provided that the 7
outside consultant enters into a written agreement to maintain the confidentiality of the 8
proprietary rate–related information. 9
(v) The Commissioner shall notify the insurer in writing at least 10 10
business days before the Commissioner discloses any of the insurer’s proprietary 11
rate–related information under subparagraph (iii) of this paragraph. 12
(vi) In addition to any other rights an insurer may have under any 13
other applicable law, the insurer may seek to have any disclosure of the insurer’s 14
proprietary rate–related information under subparagraph (iii)1 of this paragraph be made 15
under seal or other protection of confidentiality. 16
(vii) There is no waiver of any applicable privilege or claim of 17
confidentiality with regard to any proprietary rate–related information that is disclosed 18
under subparagraph (iii) of this paragraph. 19
(4) This subsection may not be construed to: 20
(i) authorize an insurer to designate the rating factors used to 21
calculate the premium as proprietary rate–related information; or 22
(ii) authorize the Commissioner to keep the rating factors 23
confidential.] 24
(d) (1) The Commissioner may investigate and determine whether or not rates 25
in the State are excessive, inadequate, or unfairly discriminatory. 26
(2) In an investigation and determination under this subsection, the 27
Commissioner shall give due consideration to the factors specified in § 11–306 of this 28
subtitle. 29
11–319. 30
(A) AN INSURER THAT USES TERRITORY AS A FACTO R IN ESTABLISHING 31
AUTOMOBILE INSURANCE RATES MAY NOT USE MO RE THAN FIVE TERRITO RIES. 32
(B) An insurer that uses territory as a factor in establishing automobile insurance 33
rates shall submit a statement to the Commissioner certifying that: 34
SENATE BILL 816 5
(1) the territories used by the insurer have been reviewed within the 1
previous 3 years; [and] 2
(2) use of the territories is actuarially justified; AND 3
(3) THE INSURER DID NOT USE MORE THAN FIVE T ERRITORIES. 4
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall apply to all 5
policies of motor vehicle insurance offered, issued, or delivered in the State on or after 6
January 1, 2024. 7
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect 8
October 1, 2023. 9