EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*hb0067*
HOUSE BILL 67
C4, J5 4lr0326
(PRE–FILED) CF SB 229
By: Chair, Economic Matters Committee (By Request – Departmental – Maryland
Insurance Administration)
Requested: September 15, 2023
Introduced and read first time: January 10, 2024
Assigned to: Economic Matters
Committee Report: Favorable
House action: Adopted
Read second time: February 13, 2024
CHAPTER ______
AN ACT concerning 1
Insurance – Penalties – Unauthorized Insurers, Insurance Producers, and 2
Public Adjusters 3
FOR the purpose of altering the maximum civil penalty to which an unauthorized insurer 4
or person that violates certain provisions of State insurance law is subject for each 5
violation; altering the maximum civil penalty that the Maryland Insurance 6
Commissioner may impose, in addition to suspending or revoking the license, on the 7
holder of an insurance producer license or a public adjuster licensee for each violation 8
of State insurance law; and generally relating to penalties imposed under State 9
insurance law. 10
BY repealing and reenacting, with amendments, 11
Article – Insurance 12
Section 4–212, 10–126, and 10–410 13
Annotated Code of Maryland 14
(2017 Replacement Volume and 2023 Supplement) 15
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 16
That the Laws of Maryland read as follows: 17
Article – Insurance 18
4–212. 19 2 HOUSE BILL 67
An unauthorized insurer or person that violates this subtitle is subject to a civil 1
penalty of not less than $100 but not exceeding [$50,000] $125,000 for each violation. 2
10–126. 3
(a) The Commissioner may deny a license to an applicant under §§ 2–210 through 4
2–214 of this article, or suspend, revoke, or refuse to renew or reinstate a license after 5
notice and opportunity for hearing under §§ 2–210 through 2–214 of this article if the 6
applicant or holder of the license: 7
(1) has willfully violated this article or another law of the State that relates 8
to insurance; 9
(2) has intentionally misrepresented or concealed a material fact in the 10
application for a license; 11
(3) has obtained or attempted to obtain a license by misrepresentation, 12
concealment, or other fraud; 13
(4) has misappropriated, converted, or unlawfully withheld money 14
belonging to an insurer, insurance producer, beneficiary, or insured; 15
(5) has willfully and materially misrepresented the provisions of a policy; 16
(6) has committed fraudulent or dishonest practices in the insurance 17
business; 18
(7) has participated, with or without the knowledge of an insurer, in selling 19
motor vehicle insurance without an actual intent to sell the insurance, as evidenced by a 20
persistent pattern of filing certificates of insurance together with or closely followed by 21
cancellation notices for the insurance; 22
(8) has been convicted by final judgment in any state or federal court of a 23
felony or crime involving moral turpitude; 24
(9) has knowingly participated in writing or issuing substantial 25
over–insurance of property insurance risks; 26
(10) has failed an examination required by this subtitle; 27
(11) has willfully failed to comply with or has willfully violated a proper 28
order, subpoena, or regulation of the Commissioner or the insurance regulatory authority 29
of another state; 30
(12) has failed or refused to pay over on demand money that belongs to an 31
insurer, insurance producer, or other person entitled to the money; 32 HOUSE BILL 67 3
(13) has otherwise shown a lack of trustworthiness or competence to act as 1
an insurance producer; 2
(14) is not or does not intend to carry on business in good faith and represent 3
to the public that the person is an insurance producer; 4
(15) has been denied a license or certificate in another state or has had a 5
license or certificate suspended or revoked in another state; 6
(16) has intentionally or willfully made or issued, or caused to be made or 7
issued, a statement that materially misrepresents or makes incomplete comparisons about 8
the terms or conditions of a policy or contract issued by an authorized insurer, for the 9
purpose of inducing or attempting to induce the owner of the policy or contract to forfeit or 10
surrender it or allow it to lapse in order to replace it with another; 11
(17) has transacted insurance business that was directed to the applicant or 12
holder for consideration by a person whose license or certificate to engage in the insurance 13
business at the time was suspended or revoked, and the applicant or holder knew or should 14
have known of the suspension or revocation; 15
(18) has solicited, procured, or negotiated insurance contracts for an 16
unauthorized insurer, including contracts for nonprofit health service plans, dental plan 17
organizations, and health maintenance organizations; 18
(19) has knowingly employed or knowingly continued to employ an 19
individual acting in a fiduciary capacity who has been convicted of a felony or crime of moral 20
turpitude within the preceding 10 years; 21
(20) has forged another’s name to an application for insurance or to any 22
document related to an insurance transaction; 23
(21) has improperly used notes or any other reference material to complete 24
an examination for a license; 25
(22) has failed to pay income tax or related interest or penalty under: 26
(i) an assessment under the Tax – General Article that is final and 27
no longer subject to review by the tax court; or 28
(ii) an order of the tax court that is final and no longer subject to 29
judicial review; or 30
(23) in providing information under § 10–118 of this subtitle regarding the 31
termination of an appointment with an insurer, has made an inaccurate statement with 32
actual malice. 33
4 HOUSE BILL 67
(b) (1) The Commissioner may deny a license to an applicant business entity 1
under §§ 2–210 through 2–214 of this article, or suspend, revoke, or refuse to renew or 2
reinstate a license of a business entity after notice and opportunity for hearing under §§ 3
2–210 through 2–214 of this article, if an individual listed in paragraph (2) of this 4
subsection has: 5
(i) violated any provision of this subtitle; 6
(ii) been convicted of a felony, a crime of moral turpitude, or any 7
criminal offense involving dishonesty or breach of trust; or 8
(iii) had any professional license suspended or revoked for a 9
fraudulent or dishonest practice. 10
(2) This subsection applies in any case that involves a business entity if the 11
violation was committed by an individual who is: 12
(i) an insurance producer; 13
(ii) 1. in the case of a limited liability company, an officer, 14
director, member, or manager; 15
2. in the case of a partnership, a partner; and 16
3. in the case of a corporation, a director, officer, or owner; or 17
(iii) an individual with direct control over the fiscal management of 18
the business entity. 19
(c) Instead of or in addition to suspending or revoking the license, the 20
Commissioner may impose on the holder of the license a penalty of not less than $100 but 21
not exceeding [$500] $5,000 for each violation of this article. 22
(d) Instead of or in addition to suspending or revoking the license, the 23
Commissioner may require that restitution be made to any citizen who has suffered 24
financial injury because of the violation of this article. 25
(e) If the license is suspended under this section, the Commissioner may require 26
the individual to pass an examination and file a new application before the suspension is 27
lifted. 28
(f) (1) Within 30 days after the final disposition of the matter, an insurance 29
producer shall report to the Commissioner any adverse administrative action taken against 30
the insurance producer: 31
(i) in another jurisdiction; or 32
HOUSE BILL 67 5
(ii) by another governmental unit in this State. 1
(2) The report shall include a copy of the order, consent order, and any 2
other relevant legal documents. 3
(g) (1) (i) In this subsection, the term “charging document” means a 4
written accusation alleging that a defendant has committed an offense. 5
(ii) In this subsection, the term “charging document” includes: 6
1. a citation; 7
2. an indictment; 8
3. an information; and 9
4. a statement of charges. 10
(2) This subsection does not apply to a misdemeanor violation of the 11
Maryland Vehicle Law or the vehicle law of another jurisdiction. 12
(3) If an insurance producer is prosecuted for a crime in any jurisdiction, 13
the insurance producer shall report the prosecution to the Commissioner within 30 days 14
after the insurance producer’s initial appearance before a court, including an appearance 15
before: 16
(i) a judicial officer of the District Court due to an arrest; 17
(ii) the District Court in response to a summons; 18
(iii) the circuit court due to execution of a warrant; or 19
(iv) the circuit court in person or by written notice of counsel in 20
response to a summons. 21
(4) The report shall include a copy of: 22
(i) the charging document; 23
(ii) any order issued by a court; and 24
(iii) any other relevant legal documents. 25
(h) An individual is subject to denial or suspension of a license under § 10–119.3 26
of the Family Law Article if the individual: 27
(1) is in arrears in the payment of child support amounting to more than 28 6 HOUSE BILL 67
120 days under the most recent order; or 1
(2) has failed to comply with a subpoena issued by the Child Support 2
Administration under § 10–108.6 of the Family Law Article. 3
10–410. 4
(a) The Commissioner may deny a license to an applicant or suspend, revoke, or 5
refuse to renew or reinstate a license after notice and opportunity for a hearing under §§ 6
2–210 through 2–214 of this article if the applicant or licensee: 7
(1) has violated this article; 8
(2) has made a material misstatement in the application for the license; 9
(3) has engaged in fraudulent or dishonest practices; 10
(4) has demonstrated incompetency or untrustworthiness to act as a public 11
adjuster; 12
(5) has misappropriated, converted, or unlawfully withheld money that 13
belongs to an insurer, insurance producer, insured, or other person; 14
(6) has willfully and materially misrepresented the provisions of a policy; 15
(7) has been convicted of a felony, a crime of moral turpitude, or any 16
criminal offense involving dishonesty or breach of trust; 17
(8) has willfully failed to comply with or has willfully violated a proper 18
order or regulation of the Commissioner; 19
(9) has failed or refused to pay on demand money that belongs to an 20
insurer, insurance producer, insured, or other person entitled to the money; 21
(10) is not carrying on or does not intend to carry on business in good faith 22
while representing to the public that the person is a public adjuster; 23
(11) has been denied a license or has had a license suspended or revoked in 24
another state; or 25
(12) has knowingly employed or knowingly con tinued to employ an 26
individual acting in a fiduciary capacity who has been convicted within the preceding 10 27
years of a felony or crime of moral turpitude. 28
(b) (1) The Commissioner may deny a license to a business entity applicant or 29
suspend, revoke, or refuse to renew or reinstate the license of a business entity after notice 30
and opportunity for a hearing under §§ 2–210 through 2–214 of this article, if an individual 31 HOUSE BILL 67 7
listed in paragraph (2) of this subsection: 1
(i) violates any provision of this article; 2
(ii) is convicted of a felony, a crime of moral turpitude, or any 3
criminal offense involving dishonesty or breach of trust; or 4
(iii) has any professional license suspended or revoked for a 5
fraudulent or dishonest practice. 6
(2) The sanctions provided for under this subsection may be imposed on a 7
business entity if the violation was committed by an individual who: 8
(i) is a public adjuster employed by the business entity; 9
(ii) 1. in the case of a limited liability company, is an officer, 10
director, member, or manager; 11
2. in the case of a partnership, is a partner; and 12
3. in the case of a corporation, is a director, officer, or 13
controlling owner; or 14
(iii) has direct control over the fiscal management of the business 15
entity. 16
(c) Instead of or in addition to suspending or revoking the license of a public 17
adjuster, the Commissioner may impose on the licensee a penalty of not less than $100 but 18
not exceeding [$500] $5,000 for each violation of this article. 19
(d) Instead of or in addition to suspending or revoking the license, the 20
Commissioner may require that restitution be made to any citizen who has suffered 21
financial injury because of the violation of this article. 22
(e) If the license is suspended under this section, the Commissioner may require 23
the individual to pass an examination and file a new application before the suspension is 24
lifted. 25
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect 26
October 1, 2024. 27