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.
*hb1098*
HOUSE BILL 1098
C4 5lr1544
By: Delegates Fraser–Hidalgo and Wilson
Introduced and read first time: February 5, 2025
Assigned to: Economic Matters
Committee Report: Favorable with amendments
House action: Adopted with floor amendments
Read second time: March 6, 2025
CHAPTER ______
AN ACT concerning 1
Insurance – Automobile Insurance – Maryland Automobile Insurance Fund and 2
Affordability Study 3
FOR the purpose of requiring the Maryland Automobile Insurance Fund to calculate and 4
report its risk based capital level in accordance with certain provisions of insurance 5
law and maintain total adjusted capital in a certain amount; requiring the Maryland 6
Insurance Commissioner to review and determine the adequacy of an RBC plan filed 7
by the Fund; establishing that certain provisions of insurance law regarding prior 8
approval rate making apply to the Fund during a certain time period and under 9
certain circumstances; requiring Maryland Insurance Administration to establish a 10
workgroup to study automobile insurance affordability and submit a report to the 11
Governor and the General Assembly on or before a certain date; authorizing the 12
Board of Trustees of the Fund to certify a certain assessment in a certain manner on 13
or before a certain date; and generally relating to automobile insurance. 14
BY adding to 15
Article – Insurance 16
Section 20–306 17
Annotated Code of Maryland 18
(2017 Replacement Volume and 2024 Supplement) 19
BY repealing and reenacting, with amendments, 20
Article – Insurance 21
Section 20–507 22
Annotated Code of Maryland 23 2 HOUSE BILL 1098
(2017 Replacement Volume and 2024 Supplement) 1
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 2
That the Laws of Maryland read as follows: 3
Article – Insurance 4
20–306. 5
(A) IN THIS SECTION, “COMPANY ACTION LEVEL RBC” HAS THE MEANING 6
STATED IN § 4–301(N)(1) OF THIS ARTICLE. 7
(B) THE FUND SHALL CALCULATE AND REPORT ITS RBC LEVEL IN 8
ACCORDANCE WITH TITLE 4, SUBTITLE 3 OF THIS ARTICLE. 9
(C) (1) BEGINNING DECEMBER 31, 2026, THE FUND SHALL MAINTAIN 10
TOTAL ADJUSTED CAPIT AL, AS DEFINED IN § 4–301(R) OF THIS ARTICLE , IN AN 11
AMOUNT THAT IS GREAT ER THAN OR EQUAL TO ITS COMPANY ACTION L EVEL RBC. 12
(2) THE FUND SHALL PREPARE AN D SUBMIT AN RBC PLAN IN 13
ACCORDANCE WITH § 4–305(B) OF THIS ARTICLE IF A N RBC REPORT FILED BY THE 14
FUND UNDER SUBSECTION (B) OF THIS SECTION SHOW S THAT THE FUND’S TOTAL 15
ADJUSTED CAPITAL : 16
(I) IS LESS THAN THE FUND’S COMPANY ACTION LEV EL RBC; 17
OR 18
(II) 1. IS LESS THAN THE PRO DUCT OF 3.0 AND THE FUND’S 19
AUTHORIZED CONTROL L EVEL RBC, AS DEFINED IN § 4–301(N)(3) OF THIS ARTICLE; 20
AND 21
2. TRIGGERS THE TREND T EST CALCULATION INCL UDED 22
IN THE PROPERTY AND CASUALTY RBC INSTRUCTIONS . 23
(D) IN ACCORDANCE WITH § 4–305(D) OF THIS ARTICLE , THE 24
COMMISSIONER SHALL RE VIEW AND DETERMINE T HE ADEQUACY OF AN RBC PLAN 25
FILED BY THE FUND AS REQUIRED UNDE R THIS SECTION. 26
20–507. 27
(a) Subject to the authority of the Commissioner to determine whether rates are 28
excessive, inadequate, or unfairly discriminatory, as provided in Title 11, Subtitle 2 OR 29
SUBTITLE 3 of this article, the Executive Director shall determine the premiums to be 30
charged on policies issued by the Fund. 31
HOUSE BILL 1098 3
(b) (1) Except as provided in [subsection] SUBSECTIONS (c) AND (D) of this 1
section, the provisions of Title 11, Subtitle 3 of this article apply to the determination of 2
premiums by the Executive Director and the filing of rates with the Commissioner. 3
(2) Notwithstanding Title 11, Subtitle 2 OR SUBTITLE 3 of this article or 4
any other provision of this title, the Executive Director may base premiums on one or both 5
of the following items: 6
(i) the number of points accumulated by an insured or applicant for 7
insurance under the point system provided for in Title 16, Subtitle 4 of the Transportation 8
Article; or 9
(ii) the prior claims experience of an insured or applicant for 10
insurance. 11
(C) THE PROVISIONS OF TITLE 11, SUBTITLE 2 OF THIS ARTICLE APPL Y TO 12
THE DETERMINATION OF PREMIUMS BY THE EXECUTIVE DIRECTOR AND THE FILING 13
OF RATES WITH THE COMMISSIONER : 14
(1) BETWEEN JULY 1, 2025, AND DECEMBER 31, 2025, BOTH 15
INCLUSIVE; AND 16
(2) BEGINNING JANUARY 1, 2026, IF THE RBC REPORT MOST 17
RECENTLY FILED BY TH E FUND SHOWS THAT THE FUND’S TOTAL ADJUSTED 18
CAPITAL IS LESS THAN THE AMOUNT REQUIRED UNDER § 20–306(C)(1) § 20–306(C) 19
OF THIS TITLE. 20
[(c)] (D) (1) Premiums for all commercial coverage shall be determined in 21
accordance with this section and § 20–508 of this subtitle. 22
(2) Notwithstanding paragraph (1) of this subsection, the rating principles 23
under subsection [(d)] (E) of this section may not be used to determine the premium for 24
commercial coverage. 25
[(d)] (E) In reviewing rates filed by the Fund, the Commissioner shall consider 26
not only the rating principles under Title 11, Subtitle 2 OR SUBTITLE 3 of this article but 27
also the statutory purpose of the Fund under § 20–301 of this title. 28
[(e)] (F) (1) The Motor Vehicle Administration and Executive Director may 29
arrange for the Motor Vehicle Administration to collect premiums on policies issued by the 30
Fund when the Motor Vehicle Administration issues a driver’s license or certificate of 31
registration. 32
(2) A premium collected under this subsection shall be paid to the State 33
Treasurer for the account of the Fund. 34
4 HOUSE BILL 1098
[(f)] (G) (1) The Fund may not provide directly or indirectly for the financing 1
of premiums. 2
(2) A premium may be financed only by a premium finance company 3
registered with the Commissioner in accordance with § 23–201 of this article. 4
(3) If a prospective insured’s initial payment to the Fund, a fund producer, 5
or premium finance company is not honored, a policy or endorsement issued in reliance on 6
that payment is void. 7
[(g)] (H) (1) (i) Subject to the approval of the Commissioner and in 8
accordance with this subsection, the Fund may accept premiums on an installment 9
payment basis. 10
(ii) In approving the Fund’s plan for accepting premiums on an 11
installment payment basis, the Commissioner shall: 12
1. consider as factors: 13
A. the percentage of the initial premium payment in 14
comparison to the total premium under the policy; 15
B. the number of installment premium payments accepted on 16
a policy under the installment payment plan; and 17
C. the overall affordability of the installment payment plan 18
in comparison to other payment options available to the policyholder; and 19
2. ensure that the Fund’s installment payment plan 20
meets the requirements of § 27–216 of this article. 21
(2) The Fund may not discriminate among insureds by charging different 22
premiums to insureds who select, as a payment option, the Fund’s installment payment 23
plan instead of a premium finance agreement. 24
(3) In determining commissions paid to a fund producer, the Fund may not 25
consider whether the fund producer placed an insured in an installment payment plan. 26
(4) (i) In accordance with this paragraph, written and electronic 27
communications, including the Fund’s website, affecting the placement of coverage by the 28
Fund or a fund producer shall include a statement, on a form approved by the 29
Commissioner, advising an applicant or an insured of the payment options available to the 30
applicant or insured. 31
(ii) The statement shall state that the applicant or insured has the 32
following payment options: 33
HOUSE BILL 1098 5
1. the Fund’s installment payment plan; 1
2. a premium finance agreement; or 2
3. payment of the policy in full. 3
(iii) The statement shall be included on written or electronic 4
communications at the time the applicant or insured: 5
1. is issued a new policy; or 6
2. is issued a reissuance, rewrite, or renewal of an existing 7
policy. 8
(iv) The statement shall state that the applicant or insured should 9
consult a fund producer who will fully describe the terms of each payment option. 10
[(h)] (I) (1) If the Fund makes a change to its plan for accepting premiums 11
on an installment payment basis, within 90 days after the change, the Commissioner shall 12
submit a report to the General Assembly providing the reason for the change. 13
(2) The report required under paragraph (1) of this subsection shall: 14
(i) include the effect the change will have on the required factors for 15
consideration under [(g)(1)(ii)1] SUBSECTION (H)(1)(II)1 of this section; and 16
(ii) be submitted in accordance with § 2 –1257 of the State 17
Government Article. 18
SECTION 2. AND BE IT FURTHER ENACTED, That: 19
(a) (1) The Maryland Insurance Administration shall establish a workgroup 20
to study: 21
(1) (i) the affordability of private passenger automobile insurance in 22
the State, including factors that contribute to premium rate increases and trends in rate 23
increases; 24
(2) (ii) policy options to provide greater transparency regarding 25
automobile insurance premiums and to increase the affordability of automobile insurance 26
in the State; 27
(3) (iii) ways in which the term “affordability” has been or may be 28
defined in the context of the establishment of private passenger automobile insurance 29
premium rates; and 30
6 HOUSE BILL 1098
(4) (iv) methodologies by which affordability can be considered in 1
establishing private passenger automobile insurance rates consistent with rate making 2
principles codified in the Insurance Article; and 3
(v) the current financial status of private passenger automobile 4
insurers in the State and potential options to address excess profits. 5
(2) In conducting the study under paragraph (1) of this subsection, the 6
workgroup shall seek and consider input from relevant stakeholders, including the 7
reinsurance industry. 8
(b) The workgroup consists of the following members: 9
(1) one member of the Senate of Maryland who is a member of the Finance 10
Committee, appointed by the President of the Senate; 11
(2) one member of the House of Delegates who is a member of the Economic 12
Matters Committee, appointed by the Speaker of the House; 13
(3) the Maryland Insurance Commissioner or the Commissioner’s 14
designee; 15
(4) the Executive Director of the Maryland Automobile Insurance Fund, or 16
the Executive Director’s designee; and 17
(5) the following members, appointed by the chair of the workgroup: 18
(i) one representative of an automobile insurer or automobile 19
insurer trade association; and 20
(ii) one representative of a consumer advocacy group that is active 21
in the area of automobile insurance; and 22
(iii) one representative of private passenger automobile insurance 23
producers in the State. 24
(c) The Maryland Insurance Commissioner or the Commissioner’s designee shall 25
chair the workgroup. 26
(d) On or before January 1, 2026, the workgroup shall report its findings and 27
recommendations to the Governor and, in accordance with § 2–1257 of the State 28
Government Article, the General Assembly. 29
SECTION 3. AND BE IT FURTHER ENACTED, That, on or before March 15, 2026, 30
for calendar year 2025 operating results only, the Board of Trustees of the Maryland 31
Automobile Insurance Fund may certify the greater of: 32
HOUSE BILL 1098 7
(1) the calculation yielded under § 20–404(b) and (c) of the Insurance 1
Article; and 2
(2) an amount not to exceed $20,000,000. 3
SECTION 3. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2025. Section 2 of this Act shall remain effective for a period of 1 year and, at the end of 5
June 30, 2026, Section 2 of this Act, with no further action required by the General 6
Assembly, shall be abrogated and of no further force and effect. 7
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
Speaker of the House of Delegates.
________________________________________________________________________________
President of the Senate.