# Insurance (GIN)

## Title 11. Insurance Rating Law

### Subtitle 3. Competitive Rating

#### Section 11-301

(a) In this subtitle the following words have the meanings indicated.

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

(c) "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.

#### Section 11-302

(a) The purposes of this subtitle are:

  (1) to protect policyholders and the public against the adverse effect of excessive, inadequate, or unfairly discriminatory rates;

  (2) as the most effective way to produce rates that conform to the standards of paragraph (1) of this subsection, to encourage independent action by insurers and reasonable price competition among insurers;

  (3) to provide formal regulatory controls for use if price competition fails;

  (4) to authorize cooperative action among insurers in the rate making process and to regulate that cooperation in order to prevent practices that tend to bring about monopoly or to lessen or destroy competition; and

  (5) to provide rates that are responsive to competitive market conditions and to improve the availability of insurance in the State.

(b) 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.

#### Section 11-303

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

  (1) life insurance;

  (2) annuities;

  (3) health insurance;

  (4) marine insurance described in Sec. 11-202(b)(2) of this title;

  (5) aircraft insurance described in Sec. 11-202(b)(3) of this title;

  (6) reinsurance;

  (7) title insurance;

  (8) medical malpractice insurance;

  (9) any form or plan of insurance regulated under Sec. 27-217 of this article; and

  (10) surety insurance.

(b) 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.

#### Section 11-306

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

(b)

  (1) Rates may not be:

    (i) excessive or inadequate, as defined under this subtitle; or

    (ii) unfairly discriminatory.

  (2) Except as provided in paragraph (4) of this subsection, a rate may not be held to be excessive unless:

    (i) the rate is unreasonably high for the insurance provided; and

    (ii) the Commissioner has issued a ruling under Sec. 11-308(c) of this subtitle that a reasonable degree of competition does not exist in a market to which the rate is applicable.

  (3) A rate may not be held to be inadequate unless:

    (i) the rate is unreasonably low for the insurance provided and continued use of the rate would endanger the solvency of the insurer; or

    (ii) the rate is unreasonably low for the insurance provided and the use of the rate by the insurer has had, or if continued will have, the effect of destroying competition or of creating monopoly.

  (4) For personal lines property insurance and casualty insurance, the Commissioner may hold a statewide rate or a rate in a particular jurisdiction or geographic territory to be excessive without determining whether a reasonable degree of competition exists under Sec. 11-308(c) of this subtitle if the Commissioner determines that the rate:

    (i) is unreasonably high for the insurance provided; and

    (ii) is not actuarially justified based on commonly accepted actuarial principles.

  (5) If the Commissioner determines that a rate is excessive under paragraph (4) of this subsection and disapproves the rate, the disapproval is subject to Sec. 11-308(c)(4), (d), and (e) of this subtitle.

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

  (1) past and prospective loss experience within and outside the State;

  (2) conflagration or catastrophe hazards;

  (3) a reasonable margin for underwriting profit and contingencies;

  (4) dividends, savings, or unabsorbed premium deposits allowed or returned by insurers to their policyholders, members, or subscribers;

  (5) past and prospective expenses, both countrywide and those specially applicable to the State;

  (6) investment income earned or realized by insurers both from their unearned premium and from their loss reserve funds; and

  (7) all relevant factors within and outside the State.

(d) 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.

(e)

  (1) Risks may be grouped by classifications for the establishment of rates and minimum premiums.

  (2) Classification rates may be modified to produce rates for individual risks in accordance with rating plans that establish standards for measuring variations in hazards or expense provisions, or both.

  (3) The standards may measure any difference among risks that have had a direct and substantial effect on losses or expenses.

  (4) Notwithstanding any other provision of this subsection, a rate may not be based wholly or partly on geographic area itself, as opposed to underlying risk considerations, even though expressed in geographic terms.

#### Section 11-307

(a)

  (1) Except as otherwise provided in this subsection, each authorized insurer and each rating organization that has been designated by an insurer for the filing of rates under subsection (b) of this section shall file with the Commissioner all rates and supplementary rate information and all changes and amendments of rates and supplementary information made by it for use in the State on or before the date they become effective.

  (2) Rates and supplementary rate information need not be filed for inland marine risks that by general custom are not written according to manual rules or rating plans.

(b)

  (1) An insurer may itself establish rates and supplementary rate information based on the factors in Sec. 11-306 of this subtitle.

  (2) Except for workers' compensation insurance rates, an insurer may use rates and supplementary rate information prepared and filed with the Commissioner by a rating organization of which it is a member or subscriber, with average loss factors or expense factors determined by the rating organization or with modification for its own expense and loss experience as the credibility of that experience allows.

  (3) If an insurer uses rates and supplementary rate information prepared by a rating organization:

    (i) the insurer shall notify the Commissioner that it uses rates and supplementary rate information prepared and filed with the Commissioner by a designated rating organization of which it is a member or subscriber and shall provide the Commissioner with information about modifications of those rates and supplementary rate information that is necessary to inform the Commissioner fully; and

    (ii) subject to modifications filed by the insurer, the insurer's rates and supplementary rate information shall be those filed periodically by the rating organization, including any amendments to those filings.

(c)

  (1) In this subsection, "proprietary rate-related information":

    (i) means a rating model; and

    (ii) includes the formulas, algorithms, analyses, and specific weights given to variables used in the model.

  (2)

    (i) Except as provided in paragraph (3) of this subsection, each filing and any supporting information filed under this subtitle shall be open to public inspection as soon as filed.

    (ii) On request and payment of a reasonable charge, a person may obtain copies of a filing and any supporting information.

  (3)

    (i) Information that an insurer files with the Commissioner and identifies as proprietary rate-related information:

      (1) constitutes a trade secret and confidential commercial information;

      (2) subject to subparagraph (ii) of this paragraph and except as provided in subparagraph (iii) of this paragraph, shall be kept confidential by the Commissioner; and

      (3) is not subject to subpoena served on the Commissioner or any recipient of proprietary rate-related information under subparagraph (iii) of this paragraph.

    (ii)

      (1) Except as provided in subsubparagraph 2 of this subparagraph, if the Commissioner determines that some or all of the material that an insurer files and identifies as proprietary rate-related information does not constitute proprietary rate-related information as defined in paragraph (1) of this subsection, the Commissioner shall:

      (A) give the insurer written notice of that determination; and

      (B) make the material open to public inspection 10 business days after the date the Commissioner gives notice of the determination to the insurer.

      (2) The Commissioner may not disclose the material if:

      (A) the insurer has not put the rate filing into effect; and

      (B) within the time period described in subsubparagraph 1B of this subparagraph, the insurer withdraws the rate filing and notifies the Commissioner that the rate filing is withdrawn.

    (iii) This paragraph does not prohibit the Commissioner from disclosing an insurer's proprietary rate-related information:

      (1) in furtherance of a regulatory or legal action that the Commissioner undertakes in performing the Commissioner's duties under this article;

      (2) if the recipient enters into a written agreement to maintain the confidentiality of the proprietary rate-related information, to:

      (A) an outside consultant that the Commissioner engages to assist the Commissioner in reviewing the insurer's rate filing;

      (B) another state's insurance regulatory agency;

      (C) the National Association of Insurance Commissioners; or

      (D) a state or federal law enforcement authority, including the United States Department of Justice and the Maryland Attorney General, if acting in a law enforcement capacity; or

      (3) if the proprietary rate-related information is part of a homeowner's insurance rate filing, to the People's Insurance Counsel Division acting under Sec. 6-306 of the State Government Article.

    (iv)

      (1) Except as provided in subsubparagraph 2 of this subparagraph, the People's Insurance Counsel Division shall maintain the confidentiality of proprietary rate-related information disclosed to the Division under subparagraph (iii)3 of this paragraph.

      (2) The People's Insurance Counsel Division may disclose proprietary rate-related information to an outside consultant that the Division engages to assist the Division in reviewing a homeowner's insurance rate filing, provided that the outside consultant enters into a written agreement to maintain the confidentiality of the proprietary rate-related information.

    (v) The Commissioner shall notify the insurer in writing at least 10 business days before the Commissioner discloses any of the insurer's proprietary rate-related information under subparagraph (iii) of this paragraph.

    (vi) In addition to any other rights an insurer may have under any other applicable law, the insurer may seek to have any disclosure of the insurer's proprietary rate-related information under subparagraph (iii)1 of this paragraph be made under seal or other protection of confidentiality.

    (vii) There is no waiver of any applicable privilege or claim of confidentiality with regard to any proprietary rate-related information that is disclosed under subparagraph (iii) of this paragraph.

  (4) This subsection may not be construed to:

    (i) authorize an insurer to designate the rating factors used to calculate the premium as proprietary rate-related information; or

    (ii) authorize the Commissioner to keep the rating factors confidential.

(d)

  (1) The Commissioner may investigate and determine whether or not rates in the State are excessive, inadequate, or unfairly discriminatory.

  (2) In an investigation and determination under this subsection, the Commissioner shall give due consideration to the factors specified in Sec. 11-306 of this subtitle.

#### Section 11-308

(a)

  (1) If, after a hearing, the Commissioner finds that a rate is not in compliance with Sec. 11-306 of this subtitle or that a rate was set in violation of Sec. 11-342 of this subtitle, the Commissioner shall issue an order that requires that use of the rate be discontinued for each policy issued or renewed after a date specified in the order.

  (2) The order may provide prospectively for premium adjustment of each policy then in force.

  (3) Except as provided in subsection (b) of this section, the Commissioner shall issue the order within 30 days after the conclusion of the hearing or within a reasonable extension of that time set by the Commissioner.

  (4) An order issued under this subsection expires 1 year after its effective date unless it is rescinded earlier by the Commissioner.

(b)

  (1) Pending a hearing, the Commissioner may issue an order that prospectively suspends a rate filed by an insurer and reimposes the last previous rate in effect if the Commissioner has reasonable cause to believe that:

    (i) the rate is in violation of Sec. 11-306 of this subtitle;

    (ii) unless the order of suspension is issued, certain insureds will suffer irreparable harm;

    (iii) the hardship that insureds will suffer in the absence of the order of suspension outweighs the hardship that the insurer would suffer if the order of suspension were issued; and

    (iv) the order of suspension will not cause substantial harm to the public.

  (2) Unless the insurer waives a hearing, the Commissioner:

    (i) shall hold a hearing within 15 working days after issuing the order of suspension; and

    (ii) within 15 working days after the conclusion of the hearing, shall make a determination and issue an order as to whether the rate should be disapproved.

(c)

  (1)

    (i) At a hearing to determine compliance with Sec. 11-306(b)(2) of this subtitle, the Commissioner first shall determine whether a reasonable degree of competition exists within a market and shall issue a ruling to that effect.

    (ii) All insurers that operate within a market that is subject to a determination by the Commissioner under this paragraph shall have the burden of establishing that a reasonable degree of competition exists within that market.

    (iii) In determining the competitiveness of a market, the Commissioner shall consider all relevant factors including:

      (1) the number of insurers actively engaged in providing coverage in the market;

      (2) market shares;

      (3) changes in market shares; and

      (4) ease of entry.

  (2)

    (i) If the Commissioner determines that a reasonable degree of competition does not exist in a market, each insurer designated by the Commissioner shall have the burden of justifying its rate in that market.

    (ii) The Commissioner may require that an insurer file supporting data as provided under Sec. 11-312 of this subtitle.

  (3) The Commissioner shall make each determination on the basis of findings of fact and conclusions of law.

  (4) If the Commissioner disapproves a rate:

    (i) the disapproval may not take effect until at least 15 days after the date of the order of disapproval; and

    (ii) unless the Commissioner approves a rate under subsection (d) or (e) of this section, the last previous rate in effect for the insurer shall be reimposed for a period of 1 year.

(d) 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:

  (1) the rate has been filed with the Commissioner; and

  (2) the Commissioner has not disapproved the rate within 30 days after it was filed.

(e)

  (1) If an insurer does not have any legally effective rates as a result of the Commissioner's disapproval of rates or other act, the Commissioner:

    (i) on request of the insurer, shall specify interim rates for the insurer that are high enough to protect the interests of all parties; and

    (ii) may order that a specified part of the premiums be placed in a special reserve established by the insurer.

  (2)

    (i) Except as provided in subparagraph (ii) of this paragraph, when new rates become legally effective, the Commissioner shall order the specially reserved funds or any overcharge in the interim rates to be distributed appropriately.

    (ii) The Commissioner may not require refunds to policyholders if the refunds are minimal.

#### Section 11-309

(a) 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 Sec. 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.

(b) 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.

(c)

  (1) The Commissioner shall approve or disapprove the filing during the waiting period or any extension of the waiting period.

  (2) The filing is deemed approved unless disapproved by the Commissioner during the waiting period or any extension of the waiting period.

(d) 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.

#### Section 11-310

(a)

  (1) The Commissioner may adopt a rule that requires that subsequent changes in the rates or supplementary rate information for a kind or line of insurance, subdivision of a kind or line of insurance, or rating class or rating territory be filed with the Commissioner at least 30 working days before they become effective if the Commissioner finds that with respect to that kind, line, subdivision, rating class, or rating territory:

    (i) competition is not an effective regulator of the rates charged;

    (ii) a substantial number of insurers are competing irresponsibly through the rates charged; or

    (iii) there are widespread violations of this subtitle.

  (2) By written notice to the filer during the initial 30-day waiting period, the Commissioner may extend the waiting period for an additional period not exceeding 30 working days.

(b)

  (1) A rule adopted under this section may not remain in effect for more than 1 year after it is adopted.

  (2) The Commissioner may renew a rule adopted under this section after a hearing and appropriate findings under this section.

#### Section 11-311

On written application of an insurer that states its reasons for requesting the rate, accompanied by the written consent of the insured or prospective insured, filed with and approved by the Commissioner, a rate in excess of that provided by a filing otherwise applicable may be used on a specific risk.

#### Section 11-312

(a)

  (1) The Commissioner may require the filing of supporting data as to any or all kinds or lines of insurance or subdivisions of kinds or lines of insurance or classes of risks or combinations of classes of risks as the Commissioner considers necessary for the proper functioning of the rate monitoring and regulating process.

  (2) The supporting data shall include:

    (i) the experience and judgment of the filer and, to the extent the filer wishes or the Commissioner requires, the experience and judgment of other insurers or rating organizations;

    (ii) the filer's interpretation of any statistical data relied on;

    (iii) a description of the actuarial and statistical methods used in setting the rates; and

    (iv) any other relevant matters required by the Commissioner.

(b) Whenever a filing is not accompanied by the information as required by the Commissioner under Sec. 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.

#### Section 11-313

For a kind or line of insurance as to which the Commissioner has issued an order in which the Commissioner finds that a reasonable degree of competition does not exist, the Commissioner may require the insurer at the time of filing a proposed rate increase with the Commissioner to notify each policyholder in writing that:

(1) the insurer has filed a proposed rate increase with the Commissioner;

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

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

#### Section 11-314

(a) 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.

(b) 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.

(c)

  (1) Within 30 days after written notice of the action of a rating organization or insurer on a request for review, any party affected by the action may apply, in writing, for an appeal to the Commissioner.

  (2) An application under this subsection shall set forth the basis for the appeal and the grounds on which the applicant will rely.

(d)

  (1) The Commissioner shall review the application for appeal.

  (2) If the Commissioner finds that the application is made in good faith and sets forth on its face grounds that reasonably justify a hearing, the Commissioner shall hold a hearing.

  (3) The Commissioner shall give written notice of the hearing to the applicant and rating organization or insurer at least 10 days before the hearing.

  (4) After the hearing, the Commissioner shall affirm or reverse the action.

#### Section 11-315

(a) All homeowner's insurance rates shall be made in accordance with the principles set forth in this section.

(b)

  (1) An insurer under a homeowner's insurance policy may not classify or maintain an insured for a period longer than 3 years in a classification that entails a higher premium because of a specific claim.

  (2) For the purpose of determining whether to classify an insured in a classification that entails a higher premium, an insurer may review only a period not greater than 3 years before:

    (i) if the policy has not yet been issued:

      (1) the date of the application; or

      (2) the proposed effective date of the policy; or

    (ii) on renewal of a policy, the effective date of the renewal.

  (3)

    (i) The removal of, reduction of, or refusal to apply a discount is not a violation of this subsection if the claim resulting in the removal of, reduction of, or refusal to apply the discount was filed not more than 5 years before the removal, reduction, or refusal.

    (ii) Subparagraph (i) of this paragraph may not be construed to prevent an insurer from granting a claim-free discount to an insured.

#### Section 11-317

(a) In this section, "increase in a policy premium" includes an increase in premium due to:

  (1) a surcharge;

  (2) retiering or other reclassification of an insured; or

  (3) removal or reduction of a discount.

(b) 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:

  (1) defines the policyholder's rate classifications;

  (2) if the insurer is an authorized insurer includes a summary, in a form approved by the Commissioner, of the insurer's approved surcharge plan or driver record point plan for that policy; and

  (3) includes a section that provides a general description of the factors, including credit information if applicable, that may cause or contribute to an increase in a policy premium.

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

(d) 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.

#### Section 11-318

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

(b)

  (1) An insurer under an automobile liability insurance policy may not classify or maintain an insured for a period longer than 3 years in a classification that entails a higher premium:

    (i) because of a specific claim; or

    (ii) because of the insured's driving record.

  (2) For the purpose of determining whether to classify an insured in a classification that entails a higher premium, an insurer may review only a period not greater than 3 years before:

    (i) if the policy has not yet been issued:

      (1) the date of the application; or

      (2) the proposed effective date of the policy; or

    (ii) on renewal of a policy, the effective date of the renewal.

  (3)

    (i) The removal of a discount is not a violation of this subsection.

    (ii) The application of a program that measures the operation of an insured vehicle during the current policy period is not a violation of this subsection.

    (iii) Subparagraph (i) of this paragraph may not be construed to prevent an insurer from granting a claim-free discount to an insured.

(c) 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.

(d) 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 Sec. 16-117(b) of the Transportation Article.

(e) 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 Sec. 21-202.1, Sec. 21-809, Sec. 21-810, Sec. 21-810.1, or Sec. 24-111.3 of the Transportation Article, or a first offense of driving with an alcohol concentration of 0.08 or more under Sec. 16-205.1 of the Transportation Article on record with the Motor Vehicle Administration, as provided in Sec. 16-117(b) of the Transportation Article.

(f) 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.

(g) 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:

  (1) is at least 55 years old; and

  (2) within the last 2 years, has completed successfully a course in accident prevention:

    (i) that is approved by the Motor Vehicle Administration;

    (ii) that includes classroom instruction or practice driving of the number of hours that the Motor Vehicle Administration requires; and

    (iii) for which the insured has received a certificate that certifies the completion of the course.

#### Section 11-319

An insurer that uses territory as a factor in establishing automobile insurance rates shall submit a statement to the Commissioner certifying that:

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

(2) use of the territories is actuarially justified.

#### Section 11-321

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

(b) "Affiliate" has the meaning stated in Sec. 7-101 of this article.

(c) "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.

(d) "Private passenger premium" means the direct written premium derived from the sale of private passenger motor vehicle insurance policies in a calendar year.

(e) "Subsidiary" has the meaning stated in Sec. 7-101 of this article.

#### Section 11-322

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

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

#### Section 11-323

(a) 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.

(b) The data required under this section shall:

  (1) be filed with the Commissioner in the form required by the Commissioner; and

  (2) at a minimum, detail the amount of private passenger premium written by the insurer and the Maryland Automobile Insurance Fund in the preceding calendar year and the number of policies represented by that premium:

    (i) in the State as a whole; and

    (ii) in Baltimore City.

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

(d) 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 Sec.Sec. 4-113 and 4-114 of this article.

#### Section 11-324

On or before August 15 of each year, the Commissioner shall:

(1) prepare a list of insurers that are major insurers;

(2) compute each insurer's market share in the State in the preceding calendar year;

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

(4) compute each insurer's market share in Baltimore City.

#### Section 11-325

(a) 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.

(b) 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.

(c)

  (1) The Commissioner shall review the marketing plan to determine whether the plan will achieve the goal stated in subsection (b) of this section.

  (2) A marketing plan is deemed approved unless disapproved by the Commissioner within 30 days after submission.

  (3)

    (i) If the marketing plan does not contain sufficient information for the Commissioner to determine if the plan will achieve the goal stated in subsection (b) of this section, the Commissioner shall require the major insurer to provide the needed information within 30 days after the Commissioner requests the information.

    (ii) If additional information is required by the Commissioner under this paragraph, the time period for approval, disapproval, or deemed approval begins on the date the additional information is submitted.

  (4) If the Commissioner determines that the marketing plan will not achieve the goal stated in subsection (b) of this section, the Commissioner shall require the major insurer to file for review and approval a revised marketing plan for Baltimore City.

(d)

  (1) On or before September 1 of each year, a major insurer may file a written request with the Commissioner for a 1-year exemption from the requirements of this section.

  (2) The Commissioner may grant an exemption under this subsection if the Commissioner determines that for calendar year 1994 the major insurer wrote a de minimus amount of total yearly private passenger motor vehicle insurance, as determined by the Commissioner, in the Baltimore standard metropolitan statistical area.

  (3) On or before September 15 of each year in which a request is filed, the Commissioner shall determine whether the exemption should be granted.

(e)

  (1) Subject to paragraph (2) of this subsection, the Commissioner shall exempt from the requirements of this section an insurer that:

    (i) on or after January 1, 1995, has limited the availability of its insurance to persons who are members of a club, group, or organization; and

    (ii) uniformly requires eligibility for that club, group, or organization as a condition of providing insurance.

  (2) On or before October 1 of each year, each major insurer exempted under this subsection shall file a marketing plan for Baltimore City.

  (3) 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 and who otherwise satisfy the eligibility conditions of the insurer, in the same manner as to persons who reside in other jurisdictions in the State.

(f) 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 Sec.Sec. 4-113 and 4-114 of this article.

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

(h) 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.

#### Section 11-326

(a) 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:

  (1) shall be considered confidential commercial information;

  (2) shall be kept confidential by the Commissioner; and

  (3) may not be made public or be subject to subpoena, other than by the Commissioner for the purpose of enforcement of Part IV of this subtitle by the Commissioner.

(b) The Commissioner:

  (1) may release a list of the names of all insurers designated as major insurers; and

  (2) may not release the particular market share of a major insurer in Baltimore City unless authorized by the insurer.

#### Section 11-329

(a) Each workers' compensation insurer shall:

  (1) be a member of a workers' compensation rating organization; and

  (2) adhere to the policy forms filed by the rating organization.

(b)

  (1) Each workers' compensation insurer shall adhere to a uniform classification system and uniform experience rating plan filed with the Commissioner by a rating organization designated by and subject to disapproval by the Commissioner.

  (2)

    (i) An insurer may develop subclassifications of the uniform classification system on which a rate may be made.

    (ii) Any subclassification developed under subparagraph (i) of this paragraph shall be filed with the Commissioner at least 30 days before its use.

    (iii) If the insurer fails to demonstrate that the data produced under a subclassification can be reported in a manner consistent with the uniform classification system and uniform statistical plan, the Commissioner shall disapprove the subclassification.

  (3)

    (i) An insurer may develop a tiered rating plan containing two or more risk tiers to be applied to the insurer's acceptance of risks under the uniform classification system on which a rate may be made.

    (ii) A tiered rating plan under subparagraph (i) of this paragraph shall:

      (1) establish discrete tiers for the acceptance of risks based on defined risk attributes that:

      (A) are not arbitrary, capricious, or unfairly discriminatory; and

      (B) are reasonably related to the insurer's business and economic purposes; and

      (2) require that each insured be placed in the highest quality tier for which that insured qualifies.

    (iii) An insurer shall file a tiered rating plan developed under subparagraph (i) of this paragraph with the Commissioner at least 30 days before the tiered rating plan's use.

    (iv) If an insurer fails to demonstrate that the data produced under a tiered rating plan can be reported in a manner consistent with the uniform classification system and the uniform statistical plan, the Commissioner shall disapprove the tiered rating plan.

(c) 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.

(d)

  (1) Subject to the approval of the Commissioner, each rating organization shall develop and file rules reasonably related to the recording and reporting of data under the uniform classification system, uniform statistical plan, and uniform experience rating plan.

  (2) In writing and reporting its business, each workers' compensation insurer shall adhere to the approved rules and experience rating plan.

  (3) An insurer may not agree with another insurer or rating organization to adhere to rules that are not reasonably related to the recording and reporting of data under the uniform classification system or uniform statistical plan.

(e) The experience rating plan methodology required under Sec. 11-330(d)(4) of this subtitle shall be based on:

  (1) reasonable eligibility standards;

  (2) adequate incentives for loss prevention; and

  (3) sufficient premium differentials so as to encourage safety.

(f)

  (1) Except as provided in paragraphs (2), (3), and (4) of this subsection, the uniform experience rating plan shall be the exclusive means of providing prospective premium adjustment based on measurement of the loss-producing characteristics of an individual insured.

  (2) In addition to any premium adjustment allowed under paragraph (1) of this subsection and pursuant to a filing made by a rating organization and approved by the Commissioner, an insurer may file a rating plan with the Commissioner that provides for prospective premium adjustments up to 25% based upon characteristics of a risk that are not reflected in the uniform experience rating plan.

  (3) An insurer may file a rating plan with the Commissioner that provides for prospective premium adjustments based on merit for an insured that does not meet minimum premium requirements to qualify for a uniform experience rating plan.

  (4)

    (i) Except as provided in subparagraph (ii) of this paragraph, in addition to any premium adjustment allowed under paragraphs (1), (2), and (3) of this subsection and pursuant to a filing made by a rating organization and approved by the Commissioner, an insurer may file a rating plan with the Commissioner that provides for a premium discount for appropriate classifications or subclassifications of a risk of up to 4% to an insured that has an alcohol- and drug-free workplace policy that may include one or more of the following programs:

      (1) an alcohol and drug testing program;

      (2) an employee education program on alcohol and drug abuse;

      (3) a supervisor education program on alcohol and drug abuse;

      (4) an employee assistance program that includes referrals of employees for appropriate diagnosis, treatment, and assistance;

      (5) a program requiring an employee who has caused or contributed to an accident while at work to undergo alcohol or drug testing; and

      (6) any other program that the insurer deems effective to encourage an alcohol- and drug-free workplace.

    (ii) An insurer is not required to provide a premium discount under this paragraph if the insured is required under federal or State law to test its employees for drugs or otherwise provide an alcohol- and a drug-free workplace.

  (5) An insurer may file a rating plan that provides for retrospective premium adjustments based on an insured's past experience.

#### Section 11-330

(a) 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.

(b) 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.

(c)

  (1)

    (i) Except as otherwise provided in this subsection, the effective date of a workers' compensation insurance filing is the date specified in the filing.

    (ii) The effective date of a workers' compensation insurance filing may not be earlier than 30 days after:

      (1) the date on which the Commissioner receives the filing; or

      (2) the date on which the Commissioner receives information in support of the filing, if the Commissioner requires information to be provided in support of the filing.

  (2) By written notice to the filer during the initial 30-day waiting period that the Commissioner needs additional time for consideration of the filing, the Commissioner may extend the waiting period for an additional period not exceeding 30 days.

  (3) On written application by the filer, the Commissioner may authorize a filing that the Commissioner has reviewed to become effective before the expiration of the waiting period or any extension of the waiting period.

  (4) A filing is deemed approved unless disapproved by the Commissioner during the waiting period or any extension of the waiting period.

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

  (1) workers' compensation rates and rating plans that are limited to provision for claim payment;

  (2) each workers' compensation policy form to be used by its members or subscribers;

  (3) the uniform classification;

  (4) the uniform experience rating plan and rules; and

  (5) any other information that the Commissioner requests and is otherwise entitled to receive under this subtitle.

(e) 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.

(f) 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.

(g) Notwithstanding Sec. 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.

#### Section 11-332

#### Section 11-333

(a) 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 Sec. 11-218 of this title.

(b) 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.

(c) An advisory organization has the same authority and functions under this subtitle as under Sec. 11-221 of this title.

#### Section 11-334

(a) 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.

(b)

  (1) The Commissioner may review cooperative activities and practices among rating organizations and among rating organizations and insurers.

  (2) If, after a hearing, the Commissioner finds that an activity or practice 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 unfair, unreasonable, or otherwise inconsistent with this subtitle and requires that the activity or practice be discontinued.

#### Section 11-337

(a)

  (1) Each insurer shall file with the Commissioner, and the Commissioner shall review, reasonable rules and plans for the recording and reporting of loss and expense experience in appropriate form and detail.

  (2) An insurer may not be required to record or report its experience on a classification basis that is inconsistent with its own rating system.

  (3) The Commissioner may designate one or more rating organizations to help in gathering and compiling experience information.

(b) The Commissioner and each insurer and rating organization may:

  (1) exchange information and experience data with each other and with insurance supervisory officials, insurers, and rating organizations in other states; and

  (2) consult with them about rate making and the application of rating systems.

(c) Rating organizations shall collect all relevant information from member insurers.

#### Section 11-341

An insurer may not make or issue an insurance contract or policy of insurance of a kind to which this subtitle applies, except in accordance with the filings that are in effect for the insurer as provided in this subtitle.

#### Section 11-342

(a) 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.

(b) An insurer or rating organization may not:

  (1) monopolize, attempt to monopolize, or combine or conspire with another person or persons to monopolize the business of a kind of insurance, subdivision, or class of insurance;

  (2) agree with another insurer or rating organization to charge or adhere to a rate, although insurers and rating organizations may continue to exchange statistical information;

  (3) make an agreement with another insurer, rating organization, or other person to unreasonably restrain trade;

  (4) make an agreement with another insurer, rating organization, or other person if the effect of the agreement may be substantially to lessen competition in the business of a kind of insurance, subdivision, or class of insurance; or

  (5) make an agreement with another insurer or rating organization to refuse to deal with a person in connection with the sale of insurance.

(c) 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.

(d) 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.

(e) 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:

  (1) use some or all of its services;

  (2) adhere to its rates, rating plan, rating systems, underwriting rules, or policy forms; or

  (3) prevent an insurer from acting independently.

(f)

  (1) The Commissioner shall disapprove a rate in violation of this section in accordance with the procedures required by Sec. 11-308(a) of this subtitle.

  (2) A person that violates this section is subject to the penalties provided in Sec. 11-344 of this subtitle.

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

#### Section 11-343

(a) 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.

(b) A person that violates this section:

  (1) is subject to the penalties provided in Sec. 11-344 of this subtitle; and

  (2) if the violation is committed with intent to deceive, is guilty of perjury and subject to prosecution for perjury in a court of competent jurisdiction.

#### Section 11-344

(a) 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 Sec. 4-113(d) of this article.

(b)

  (1) The Commissioner may suspend, revoke, or refuse to renew a license or certificate of authority for a violation of this subtitle.

  (2) The Commissioner may determine when the suspension or revocation of a license or certificate of authority becomes effective.

  (3) The suspension or revocation shall remain in effect for the period set by the Commissioner unless the Commissioner modifies or rescinds the suspension or revocation or until the order on which the suspension or revocation is based is modified or reversed as the result of an appeal.

(c)

  (1) Before the Commissioner imposes a penalty or suspends or revokes a license or certificate of authority under this section, the Commissioner shall issue a written order that states the findings of the Commissioner.

  (2) The Commissioner shall hold a hearing before issuing an order under paragraph (1) of this subsection.

  (3) The Commissioner shall give written notice of the hearing to the person at least 10 days before the hearing.

  (4) The notice shall specify the alleged violation.

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Md. Code Ann., Ins. (as displayed at mgaleg.maryland.gov, October 16, 2026)