Insurance (GIN) — Title 11. Insurance Rating Law

In this title the following words have the meanings indicated.

“Advisory organization” means a group, association, or other organization of insurers, located within or outside the State, that helps insurers that make their own filings or rating organizations in rate making, by collecting and providing loss or expense statistics or by submitting recommendations, but that does not make filings under this title.

“Rate” means rate of premium, policy or membership fee, or another charge made by an insurer for or in connection with an insurance contract or policy.

“Rating organization” means a person licensed under § 11-218 of this title.

“Supplementary rate information” includes a manual or plan of rates, statistical plan, classification, rating schedule, minimum premium, policy fee, rating rule, rate-related underwriting rule, minimum rate, class rate, rating plan, manual or schedule of rates or premiums, rule or regulation that governs the setting or making of rates or premiums, and any other information, not otherwise inconsistent with the purposes of this title, that the Commissioner requires by regulation.

“Working day” means a day when the Administration is open for business.

The purposes of this subtitle are:

This subtitle is not intended:

This subtitle shall be interpreted liberally to carry out the provisions of this section.

This subtitle does not apply to:

If a kind of insurance, subdivision or combination of kinds of insurance, or type of coverage is subject to this subtitle and is also subject to regulation by another rate regulatory provision of the statutes of the State, an insurer to which both provisions are otherwise applicable shall file with the Commissioner a designation as to which rate regulatory provision is applicable to it with respect to that kind of insurance, subdivision or combination of kinds of insurance, or type of coverage.

All rates shall be made in accordance with the principles set forth in this section.

Uniformity among insurers in matters within the scope of this subtitle is neither required nor prohibited.

Due consideration shall be given to:

Rates may not be excessive, inadequate, or unfairly discriminatory.

The systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of the insurer or group with respect to a kind of insurance, or with respect to a subdivision or combination of kinds of insurance for which separate expense provisions are applicable.

For fire insurance rates, consideration shall be given to experience during a period of not less than the most recent 5-year period for which experience is available.

Each filing shall include the experience of the filer.

A filing and any supporting information shall be open to public inspection as soon as filed.

An insurer may satisfy its obligation to make filings by:

The Commissioner shall review each filing as soon as reasonably possible after it is made to determine whether it meets the requirements of this subtitle.

A special filing with respect to a surety or guarantee bond required by law, by court, by executive order, or by order, rule, or regulation of a public body, not covered by a previous filing shall become effective when filed and remain effective until the Commissioner finds that the filing does not meet the requirements of this subtitle.

A regulation adopted or order issued under this section shall be made known to the insurers and rating organizations affected by the regulation or order.

The Commissioner may make any examination that the Commissioner considers advisable to determine if the rates affected by an order issued under this section meet the standards set forth in § 11-205 of this subtitle.

Unless the filer demonstrates that a proposed rate is not excessive, inadequate, or unfairly discriminatory, the Commissioner may disapprove the filing.

If, after notice and a hearing, the Commissioner finds that the rates produced are in violation of this subtitle, the Commissioner may revoke a reduction of rates made in accordance with this section.

Within a reasonable time after a filer receives a written request for information about a filing and on payment of a reasonable charge, the filer shall provide all pertinent information about the filing to an insured affected by the filing or the authorized representative of the insured.

At the time of filing a proposed rate increase with the Commissioner, an insurer that provides professional liability insurance to a physician or other health care provider shall notify each policyholder in writing that:

Each filer shall provide reasonable means within the State by which a person aggrieved by the application of its rating system may be heard in person or by an authorized representative on the person’s written request to review the manner in which the rating system has been applied in connection with the insurance afforded the aggrieved person.

If the filer fails to grant or reject the aggrieved person’s request within 30 days after it is made, the applicant may proceed as if the application had been rejected.

Within 30 days after written notice of the action of a filer on a request for review, any person affected by the action may appeal to the Commissioner.

All homeowner’s insurance rates shall be made in accordance with the principles set forth in this section.

Each insurer that provides a private passenger automobile insurance policy shall provide to the policyholder at the time of issuance or renewal of the policy a statement that:

The statement must be sufficiently clear and specific so that an individual of average intelligence can identify the classifications without making further inquiry.

All automobile insurance rates shall be made in accordance with the principles set forth in this section.

An insurer’s automobile and physical damage insurance premiums shall reflect the reduction in claims, if any, attributable to the requirement that drivers under the age of 18 years must acquire a provisional driver’s license before acquiring a driver’s license.

For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider accident reports and abstracts of court convictions that relate to driving an emergency vehicle and that are on record with the Motor Vehicle Administration, as provided in § 16–117(b) of the Transportation Article.

For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider a probation before judgment disposition of a motor vehicle law offense, a civil penalty imposed pursuant to § 21–202.1, § 21–809, § 21–810, § 21–810.1, or § 24–111.3 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under § 16–205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in § 16–117(b) of the Transportation Article.

If the insured under an automobile insurance policy notifies the insurer of a change in circumstances that justifies reclassifying the insured in a different classification or territory, the insurer shall adjust the premium charged the insured from the date of notification.

For motor vehicle personal injury and property damage coverage, an insurer may provide a reduction in rates based on actuarial justification to an insured who:

the territories used by the insurer have been reviewed within the previous 3 years; and

use of the territories is actuarially justified.

A rating organization may not adopt a rule the effect of which would be to prohibit or regulate the payment of dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers.

An insurer may deviate from the rates filed by a rating organization if:

The Commissioner may approve or disapprove a deviation as if the deviation filing were a rate filing and specify the period of time during which an approval will be effective.

Each advisory organization shall file with the Commissioner:

If, after a hearing, the Commissioner finds that the provision of information or help by an advisory organization involves an act or practice that is unfair, unreasonable, or otherwise inconsistent with this subtitle, the Commissioner may issue a written order that specifies the ways in which the act or practice is unfair, unreasonable, or otherwise inconsistent with this subtitle and requires that the act or practice be discontinued.

Each group, association, or other organization of insurers that engages in joint underwriting or joint reinsurance is subject to this subtitle with respect to its joint underwriting or joint reinsurance activities.

If, after a hearing, the Commissioner finds that an activity or practice of a group, association, or other organization that engages in joint underwriting or joint reinsurance is unfair, unreasonable, or otherwise inconsistent with this subtitle, the Commissioner may issue a written order that specifies the ways in which the activity or practice is unreasonable, unfair, or otherwise inconsistent with this subtitle and requires that the activity or practice be discontinued.

The entity examined shall pay the reasonable costs of an examination on presentation to it of a detailed account of the costs.

The officers, manager, agents, and employees of the entity examined may be examined at any time under oath and shall exhibit all books, records, accounts, documents, or agreements that govern the entity’s methods of operation.

Instead of making an examination under this section, the Commissioner may accept the report of an examination made by the insurance supervisory official of another state under the laws of that state.

The Commissioner may adopt reasonable rules and plans for the interchange of data necessary for the application of rating plans.

To further uniform administration of rate regulatory laws, the Commissioner and each insurer and rating organization may:

An insurer or officer, insurance producer, or representative of an insurer may not knowingly issue or deliver or knowingly allow the issuance or delivery of a policy or endorsement, certificate, or addition to the policy, except in accordance with the filings that are in effect for the insurer as provided in this subtitle.

An insurer may pay or allow a commission to a licensed insurance producer of the insurer as compensation for procuring business.

In this subtitle the following words have the meanings indicated.

“Competitive market” means any market except those which, by application of the standards in § 11-306 of this subtitle, have been determined to be noncompetitive under § 11-308(c) of this subtitle.

“Market” means the interaction between buyers and sellers of a particular line of insurance in a geographical area consisting of not less than one entire county.

The purposes of this subtitle are:

This subtitle shall be construed liberally to achieve the purposes stated in subsection (a) of this section, which shall constitute an aid and guide to interpretation of this subtitle but not an independent source of power.

Notwithstanding Subtitle 2 of this title, this subtitle applies to the establishment of rates for all types of insurance except:

If and to the extent that the Commissioner finds that the application of any or all of the provisions of this subtitle is unnecessary to achieve the purposes of this subtitle, the Commissioner by rule may exempt a person or class of persons or a line or lines of insurance from any or all of those provisions.

The standards set forth in this section apply to the making and use of rates under this subtitle.

In determining whether rates comply with the standards set forth in subsection (b) of this section, due consideration shall be given to:

The systems of expense provisions included in the rates for use by an insurer or group of insurers may differ from those of other insurers or groups of insurers to reflect the requirements of the operating methods of the insurer or group of insurers with respect to a kind of insurance, or with respect to a subdivision or combination of insurance for which separate expense provisions are applicable.

During the 1-year period after the effective date of an order of disapproval, a rate adopted to replace a rate disapproved under the order may not be used until:

If, after a hearing, the Commissioner finds that the protection of the interests of the insureds of a particular insurer and the public in the State requires closer supervision of the insurer’s rates because of the insurer’s financial condition or repetitive filing of rates that are not in compliance with § 11-306 of this subtitle, the Commissioner may issue an order that requires the insurer to file any or all of the insurer’s rates and supplementary rate information 30 days before they become effective.

By written notice to the insurer during the initial 30-day waiting period, the Commissioner may extend the waiting period for an additional period not exceeding 30 days.

An insurer affected by an action of the Commissioner under this section may not request a rehearing by the Commissioner until 12 months after the date of an order of the Commissioner under subsection (a) of this section.

Whenever a filing is not accompanied by the information as required by the Commissioner under § 11-310(a) of this subtitle, the Commissioner may so inform the insurer and the filing will be deemed to be made when the information is provided.

the insurer has filed a proposed rate increase with the Commissioner;

a hearing may be requested with respect to the filing; and

an order, hearing, or refusal of a hearing by the Commissioner may be appealed under Subtitle 5 of this title.

Each rating organization and each insurer subject to this subtitle that makes its own rates shall provide reasonable means within the State by which a person aggrieved by the application of its rating system may be heard in person or by an authorized representative on the person’s written request to review the manner in which the rating system has been applied in connection with the insurance afforded the aggrieved person.

If the rating organization or insurer fails to grant or reject the aggrieved person’s request within 30 days after it is made, the applicant may proceed as if the application had been rejected.

All homeowner’s insurance rates shall be made in accordance with the principles set forth in this section.

In this section, “increase in a policy premium” includes an increase in premium due to:

Each insurer that provides a private passenger automobile insurance policy shall provide to the policyholder at the time of issuance or renewal of the policy a statement that:

The statement must be sufficiently clear and specific so that an individual of average intelligence can identify the classifications without making further inquiry.

An insurer that markets private passenger automobile insurance through insurance producers shall make available to its producers a copy of the statement required under this section.

All automobile insurance rates shall be made in accordance with the principles set forth in this section.

An insurer’s automobile and physical damage insurance premiums shall reflect the reduction in claims, if any, attributable to the requirement that drivers under the age of 18 years must acquire a provisional driver’s license before acquiring a driver’s license.

For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider accident reports and abstracts of court convictions that relate to driving an emergency vehicle and that are on record with the Motor Vehicle Administration, as provided in § 16–117(b) of the Transportation Article.

For purposes of reclassifying an insured in a classification that entails a higher premium, an insurer under an automobile insurance policy may not consider a probation before judgment disposition of a motor vehicle law offense, a civil penalty imposed pursuant to § 21–202.1, § 21–809, § 21–810, § 21–810.1, or § 24–111.3 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under § 16–205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in § 16–117(b) of the Transportation Article.

If the insured under an automobile insurance policy notifies the insurer of a change in circumstances that justifies reclassifying the insured in a different classification or territory, the insurer shall adjust the premium charged the insured from the date of notification.

For motor vehicle personal injury and property damage coverage, an insurer may provide a reduction in rates based on actuarial justification to an insured who:

the territories used by the insurer have been reviewed within the previous 3 years; and

use of the territories is actuarially justified.

In Part IV of this subtitle the following words have the meanings indicated.

“Affiliate” has the meaning stated in § 7-101 of this article.

“Major insurer” means an insurer or affiliate or subsidiary of that insurer that has written an amount of private passenger premium in the State that totals 1% or more of the total premium of private passenger premium written in the State by all insurers, including the Maryland Automobile Insurance Fund.

“Private passenger premium” means the direct written premium derived from the sale of private passenger motor vehicle insurance policies in a calendar year.

“Subsidiary” has the meaning stated in § 7-101 of this article.

Part IV of this subtitle applies to each authorized insurer that writes private passenger motor vehicle insurance in the State.

Except as expressly provided otherwise, Part IV of this subtitle does not apply to the Maryland Automobile Insurance Fund.

On or before July 1 of each year, each insurer and the Maryland Automobile Insurance Fund shall file data about the geographic distribution of private passenger premium written by it in the State for the preceding calendar year.

The data required under this section shall:

The data shall be submitted by each rating territory or each zip code, or both.

Failure by the insurer or the Maryland Automobile Insurance Fund to submit the data required under this section on a timely basis is grounds for the imposition of the penalties provided in §§ 4-113 and 4-114 of this article.

prepare a list of insurers that are major insurers;

compute each insurer’s market share in the State in the preceding calendar year;

notify in writing each insurer that has been designated as a major insurer; and

compute each insurer’s market share in Baltimore City.

On or before October 1 of each year, each insurer that has been designated a major insurer on or before August 15 of the same year shall file a marketing plan with the Commissioner.

The goal of the marketing plan shall be to ensure that the insurer markets and otherwise makes available insurance to those persons who reside in Baltimore City in the same manner as to persons who reside in other jurisdictions in the State.

Unless otherwise exempted from the requirements of this section, the failure of a major insurer to file or substantially implement a marketing plan for Baltimore City or to market and otherwise make available insurance to those persons who reside in Baltimore City in the same manner as to persons who reside in other jurisdictions in the State as required under this section is, after notice and opportunity for a hearing, grounds for the imposition of the penalties provided under §§ 4-113 and 4-114 of this article.

This section does not authorize the Commissioner to require that an insurer place an insurance producer in a particular location or jurisdiction.

If the market share of private passenger premium written by a major insurer in Baltimore City equals or exceeds 75% of the market share of private passenger premium written by the major insurer in any year in the State, excluding Baltimore City, the major insurer is not required to file a marketing plan under this section for the following year.

Notwithstanding any other provision of law, any data, documents, or other information filed with the Commissioner under Part IV of this subtitle about a particular insurer or that insurer’s market share or plan:

The Commissioner:

Each workers’ compensation insurer shall:

Each workers’ compensation insurer shall record and report its workers’ compensation experience to a rating organization as set forth in the uniform statistical plan approved by the Commissioner.

The experience rating plan methodology required under § 11–330(d)(4) of this subtitle shall be based on:

In this section, “provision for claim payment” means an estimate, expressed on a per unit of exposure basis, of the monetary amount ultimately to be needed to pay workers’ compensation insurance claims, excluding all loss adjustment or claim management expenses, other operating expenses, assessments, taxes, and profit or contingency allowances.

Except as provided in subsection (e) of this section, the Commissioner shall review each workers’ compensation insurance filing as soon as reasonably possible after it is made to determine whether it meets the requirements of this subtitle.

Subject to approval or disapproval under subsection (c) of this section, each workers’ compensation rating organization shall file with the Commissioner:

Notwithstanding subsection (c) of this section, if each rate in a schedule of workers’ compensation rates for specific classifications of risks filed by an insurer is not lower than the provision for claim payment contained in the schedule of workers’ compensation rates for those classifications filed by a rating organization under subsection (d) of this section and approved by the Commissioner, the schedule of rates filed by the insurer may become effective as soon as it is filed.

Notwithstanding subsection (e) of this section, the Commissioner shall investigate and evaluate all workers’ compensation filings to determine whether they meet the requirements of this subtitle.

Notwithstanding § 11-307 of this subtitle, the Commissioner may require an insurer or rating organization to comply with the requirements of subsection (c) of this section if the Commissioner has good cause to believe that a reasonable degree of competition does not exist within a workers’ compensation insurance market.

A rating organization may not provide a service that relates to the rates of insurance subject to this subtitle, and an insurer may not utilize the service of the rating organization for those purposes, unless the rating organization has obtained a license under § 11-218 of this title.

A rating organization may not refuse to supply services for which it is licensed in the State to an authorized insurer that offers to pay the fair and usual compensation for the services.

An advisory organization has the same authority and functions under this subtitle as under § 11-221 of this title.

Cooperation among rating organizations or among rating organizations and insurers in rate making or in other matters within the scope of this subtitle is authorized, if the filings that result from cooperation are subject to all provisions of this subtitle that are applicable to filings generally.

The Commissioner and each insurer and rating organization may:

Rating organizations shall collect all relevant information from member insurers.

In this section, “insurer” includes two or more affiliated insurers under common management or under common controlling ownership or other common effective legal control and in fact engaged in joint or cooperative underwriting, investment management, marketing, servicing, or administration of their business and affairs as insurers.

An insurer or rating organization may not:

An insurer may not acquire or retain the capital stock or assets of, or have any common management with, another insurer if the acquisition, retention, or common management substantially lessens competition in the business of a kind of insurance, subdivision, or class of insurance.

A rating organization or member or subscriber of a rating organization may not interfere with the right of an insurer to make its rates independently of the rating organization or to charge different rates from the rates made by the rating organization.

A rating organization may not adopt a rule, require an agreement, or formulate or engage in a program that would require a member, subscriber, or insurer to:

The Commissioner may maintain an action to enjoin a violation of this section.

A person may not willfully withhold information from or knowingly give false or misleading information to the Commissioner, a statistical agency designated by the Commissioner, a rating organization, or an insurer if the information will affect the rates or premiums chargeable under this subtitle.

A person that violates this section:

If, after notice and a hearing, the Commissioner finds that a person has violated a provision of this subtitle or a regulation of the Commissioner adopted under this subtitle, the Commissioner may impose a monetary penalty as provided in § 4-113(d) of this article.

This subtitle applies to all kinds and classes of insurance that:

This subtitle applies to a person that makes guarantees or issues insurance described in subsection (a) of this section.

All title insurance rates shall be made in accordance with this section.

Rates shall be reasonable and adequate for the class of risks to which they apply.

Rates may not discriminate unfairly between risks that involve essentially the same hazards and expense elements.

Due consideration shall be given to:

Each filing shall indicate the character or extent of coverage contemplated under the rates and premiums for which it is made.

A title insurer may not make a change in rates or premiums or in the forms of contracts, policies, or guarantees of insurance unless a report that indicates the change has been filed with and approved by the Commissioner.

A title insurer may satisfy its obligation to make filings by:

The Commissioner shall require that each title insurer subject to this subtitle provide to the Commissioner on a uniform basis financial data and any other information that the Commissioner requires in the regulation of rates.

The financial data to be provided shall include:

The information to be provided under this section shall be supplied on forms provided by the Commissioner.

exchange information and experience data with each other, with insurance supervisory officials and insurers in other states, and with national organizations and associations; and

consult and cooperate with them about rate and premium making and forms of contracts, policies, and guarantees of insurance.

A title insurer may not make or issue a contract, policy, or guarantee of insurance except in accordance with filings approved as provided in this subtitle, except for special or unusual risks for which a filing has not yet been provided.

Each title insurer must hold to the rates or premiums as approved by the Commissioner and may not deviate from the rates or premiums or allow to or for the account of an insured a rebate or discount on the rates or premiums payable.

A title insurer may pay or allow a commission to a licensed insurance producer of the title insurer as compensation for procuring business.

Notwithstanding subsection (a) of this section, an order, decision, ruling, or finding of the Commissioner under § 11-344 of this title:

Within 30 days after notice of an order or decision of the Commissioner under this title made without a hearing, an insurer or rating organization aggrieved by the order or decision may make a written request to the Commissioner for a hearing on the order or decision.

After a request for a hearing under this section, the Commissioner may suspend or postpone the effective date of the challenged order or decision until the hearing is concluded and the Commissioner issues an order.

If the Commissioner fails to hold or conclude the hearing or issue an order within the time required under this section, the filing or application at issue is deemed to meet the requirements of this title and is deemed approved.

This subtitle does not require the observance of formal rules of pleading or evidence at any hearing.

An order or decision of the Commissioner under this title is subject to judicial review by appeal to the Circuit Court for Baltimore City.

In this subtitle the following words have the meanings indicated.

“Carrier” means a person that:

“Contract holder” means a person to which a carrier has issued a health benefit plan.

“Medical care” means:

A carrier subject to this subtitle may not charge a premium to a contract holder or to an individual covered under a health benefit plan before the applicable premium rate is filed with and approved by the Commissioner.

A carrier subject to this subtitle may not change the premium charged to a contract holder or to an individual covered under a health benefit plan until the applicable premium rate change has been filed with and approved by the Commissioner.

Notwithstanding the Commissioner’s previous approval of a premium rate filing of a carrier subject to this section, the Commissioner, at any time, may require the carrier to demonstrate that, based on statistical analysis and reasonable assumptions and considering the factors listed in subsection (c)(2) of this section, its premium rates for a health benefit plan are not inadequate, unfairly discriminatory, or excessive in relation to benefits.

Each decision or finding of the Commissioner about premium rates made under this subtitle is subject to judicial review in accordance with Subtitle 5 of this title.

In this subtitle the following words have the meanings indicated.

“Carrier” means an insurer, a nonprofit health service plan, or a preferred provider organization that offers, issues, or delivers a policy, contract, or certificate of long–term care insurance in the State.

“Certificate” has the meaning stated in § 18–101 of this article.

“Long–term care insurance” has the meaning stated in § 18–101 of this article.

the factors that carriers use to determine premium rates for policies or contracts of long–term care insurance; and

the process and factors that the Administration uses in reviewing and approving premium rates for policies or contracts of long–term care insurance.

A carrier may not charge a premium to an insured under a policy or contract of long–term care insurance before the applicable premium rate is filed with and approved by the Commissioner.

A carrier may not change the premium charged to an insured under a policy or contract of long–term care insurance until the applicable premium rate change has been filed with and approved by the Commissioner.

The Commissioner shall provide all individuals present at a public hearing held under this subtitle who wish to testify an opportunity to do so, but may limit repetitious testimony.

Each decision or finding of the Commissioner about premium rates made under this subtitle is subject to judicial review in accordance with Subtitle 5 of this title.

A carrier shall provide a one–time written notice to its insureds that an insured may access information about proposed rate increases on the Administration’s Web site.

In this section, “travel insurance” has the meaning stated in § 10–101 of this article.

Notwithstanding any other provision of this article, travel insurance shall be classified and filed for purposes of rates and forms under an inland marine line of insurance.

Travel insurance may be in the form of an individual, a group, or a blanket policy.