# Insurance (GIN)

## Title 12. Policy Forms and Provisions

### Subtitle 1. General Provisions

#### Section 12-101

This title does not apply to reinsurance and wet marine and transportation insurance.

#### Section 12-102

(a) Except as provided in subsection (b)(1) of this section, an insurance contract or annuity contract shall contain the standard provisions required under this article.

(b)

  (1) The Commissioner may waive the required use of a provision in an insurance policy or contract form if the Commissioner:

    (i) finds that the provision is unnecessary to protect the insured or is inconsistent with the purposes of the policy; and

    (ii) approves the policy.

  (2) A required standard provision may not be waived by agreement between an insurer and another person.

(c)

  (1)

    (i) In this subsection the following words have the meanings indicated.

    (ii) "Carrier" means:

      (1) an insurer authorized to sell health insurance;

      (2) a nonprofit health service plan;

      (3) a health maintenance organization; or

      (4) any other entity providing a plan of health insurance, health benefits, or health services authorized under this article or the Affordable Care Act.

    (iii) "Enrollee" means an individual entitled to benefits from a carrier's health benefit plan.

    (iv) "Health benefit plan" has the meaning stated in Sec. 15-1301 of this article.

  (2) Each health benefit plan issued by a carrier shall include provisions that:

    (i) permit enrollees a minimum of 1 year after the date of service to submit a claim for the service;

    (ii) provide that:

      (1) an enrollee's legal incapacity shall suspend the time to submit a claim; and

      (2) the suspension period ends when legal capacity is regained; and

    (iii) provide that the failure to submit a claim within 1 year after the date of service does not invalidate or reduce the amount of the claim if:

      (1) it was not reasonably possible to submit the claim within 1 year after the date of service; and

      (2) the claim is submitted within 2 years after the date of service.

(d) The Commissioner may approve a substitute provision in an insurance policy or annuity contract if the provision is not less favorable than the required provision to the insured, annuitant, or beneficiary.

(e) Instead of a provision required by this article, a foreign insurer or alien insurer may use a substantially similar provision required by the law of the foreign insurer's or alien insurer's domicile if the substantially similar provision does not conflict with the law of this State.

(f) A policy or contract may not contain a provision that is inconsistent with a standard provision used or required to be used.

#### Section 12-103

An otherwise valid insurance policy, rider, or endorsement issued after December 31, 1963, with a condition or provision that does not comply with the requirements of this article is not invalid but is to be construed and applied in accordance with the condition or provision that would be applicable if the policy, rider, or endorsement were in full compliance with this article.

#### Section 12-104

(a) A provision in an insurance contract or surety contract that sets a shorter time to bring an action under or on the insurance contract or surety contract than required by the law of the State when the insurance contract or surety contract is issued or delivered is against State public policy, illegal, and void.

(b) If an insurance contract or surety contract contains a provision that is illegal under this section:

  (1) a State court may not give effect to the provision; and

  (2) a defense to liability under the insurance contract or surety contract may not be based upon the shorter limitation period.

#### Section 12-105

Without limitation of any right or defense of an insurer, the following acts by or on behalf of an insurer are not considered to be a waiver of a provision of a policy or of a defense of the insurer under the policy:

(1) acknowledging the receipt of notice of loss or claim under the policy;

(2) furnishing a form for:

  (i) reporting a loss or claim;

  (ii) giving information relating to a loss or claim; or

  (iii) making proof of a loss;

(3) receiving or acknowledging receipt of a form or proof listed in item (2) of this section, completed or uncompleted;

(4) investigating a loss or claim under a policy; or

(5) engaging in negotiations toward settlement of a loss or claim.

#### Section 12-106

(a)

  (1) In this section the following words have the meanings indicated.

  (2)

    (i) "Material risk factor" means a risk factor that:

      (1) was incorrectly recorded or not disclosed by the insured in an application for insurance;

      (2) was in existence on the date of the application; and

      (3) modifies the premium charged on the policy or binder in accordance with the rates and supplementary rating information filed by the insurer under Title 11, Subtitle 3 of this article.

    (ii) "Material risk factor" does not include:

      (1) information that constitutes a material misrepresentation; or

      (2) a change initiated by an insured, including any request by the insured that results in a change in coverage, change in deductible, or other change to a policy.

  (3) "Personal insurance" means property insurance or casualty insurance issued to an individual, trust, estate, or similar entity that is intended to insure against loss arising principally from the personal, noncommercial activities of the insured.

(b) This section applies only to a binder or policy, other than a renewal policy, of personal insurance, commercial property insurance, and commercial liability insurance.

(c) A binder or policy is subject to a 45-day underwriting period beginning on the effective date of coverage.

(d)

  (1) An insurer may cancel a binder or policy during the underwriting period if the risk does not meet the underwriting standards of the insurer.

  (2) If the insurer discovers a material risk factor during the underwriting period, the insurer shall recalculate the premium for the policy or binder based on the material risk factor as long as the risk continues to meet the underwriting standards of the insurer in accordance with the rates and supplementary rating information filed by the insurer under Title 11, Subtitle 3 of this article.

  (3) An insurer that recalculates a premium under paragraph (2) of this subsection shall provide a written notice to the insured on a form approved by the Commissioner that states:

    (i) the amount of the recalculated premium;

    (ii) the reason for the increase or reduction in the premium; and

    (iii) the insured's right to terminate the policy.

(e) If applicable, at the time of application or when a binder or policy is issued, an insurer shall provide written notice of its ability to cancel a binder or policy or recalculate the premium from the effective date of the policy during the underwriting period.

(f)

  (1) Except as provided in paragraph (2) of this subsection, a notice of cancellation under this section shall:

    (i) be in writing;

    (ii) have an effective date not less than 15 days after mailing;

    (iii) state clearly and specifically the insurer's actual reason for the cancellation; and

    (iv) be sent by a first-class mail tracking method to the named insured's last known address.

  (2) A notice of cancellation under this section for nonpayment of premium shall:

    (i) be in writing;

    (ii) have an effective date of not less than 10 days after mailing;

    (iii) state the insurer's intent to cancel for nonpayment of premium; and

    (iv) be sent by a first-class mail tracking method to the named insured's last known address.

  (3) With respect to a workers' compensation insurance policy or binder, the insurer shall file a copy of the notice of cancellation required under paragraph (1) or (2) of this subsection with the designee of the Workers' Compensation Commission.

(g) A binder or other contract for temporary insurance:

  (1) may be made orally or in writing; and

  (2) except as superseded by the clear and express terms of the binder, is considered to include:

    (i) all the usual terms of the policy as to which the binder was given; and

    (ii) the applicable endorsements designated in the binder.

(h) A binder is no longer valid after the policy as to which it was given is issued.

(i)

  (1) If a binder is given to a consumer borrower to satisfy a lender's requirement that the borrower obtain property insurance or credit loss insurance as a condition of making a loan secured by a first mortgage or first deed of trust on an interest in owner-occupied residential real property, the insurer or its insurance producer shall include in or with the binder:

    (i) the name and address of the insured consumer borrower;

    (ii) the name and address of the lender;

    (iii) a description of the insured residential real property;

    (iv) a provision that the binder may not be canceled within the term of the binder unless the lender and the insured borrower receive written notice at least 15 days before the cancellation;

    (v) except in the case of the renewal of a policy after the closing of a loan, a paid receipt for the full amount of the applicable premium; and

    (vi) the amount of coverage.

  (2) With respect to a binder given under this subsection, an insurer:

    (i) if the binder is to be canceled, shall give the lender and the insured consumer borrower at least 15 days' written notice before the cancellation; and

    (ii) within 45 days after the date the binder was given, shall issue a policy of insurance or provide the required notice of cancellation of the binder.

(j)

  (1) Subject to paragraph (2) of this subsection, an insurer may rescind a policy or binder of personal automobile insurance if:

    (i) the applicant's initial premium payment for the policy or binder is made by a check or other remittance that is not honored on presentation to the financial institution where the check or other remittance is drawn; and

    (ii) the insurer has disclosed to the applicant at the time of application that no coverage will be in effect if the initial premium payment is not honored on presentation to the financial institution.

  (2) An insurer shall continue or reinstate a policy or binder under paragraph (1) of this subsection without a lapse in coverage if:

    (i)

      (1) the financial institution erroneously failed to honor the check or other remittance; and

      (2) the applicant:

      (A) promptly notifies the insurer of the error; and

      (B) provides documentation of the error to the insurer as it becomes available and on request of the insurer; or

    (ii) the applicant or any secured creditor pays the insurer the amount of the initial premium within 5 business days after the insurer has sent notice, as provided in paragraph (3) of this subsection, to the applicant and any secured creditor that the check or other remittance for the initial premium payment was not honored.

  (3) To rescind a policy or binder, an insurer shall send, immediately or the next business day after receipt of a notice that the check or other remittance for the initial premium payment was not honored on presentation to the financial institution, written notice to the applicant and any secured creditor, by a first-class mail tracking method and, if available, by electronic mail or other electronic means, to the applicant's and any secured creditor's last known address, stating that:

    (i)

      (1) the policy or binder is rescinded as of its proposed effective date because the applicant's check or other remittance for the initial premium payment was not honored on presentation to the financial institution; and

      (2) no coverage is in effect under the policy or binder; but

    (ii) the insurer shall continue or reinstate the policy or binder without a lapse in coverage if:

      (1) the financial institution erroneously failed to honor the check or other remittance and the applicant:

      (A) promptly notifies the insurer of the error; and

      (B) provides documentation of the financial institution's error to the insurer as it becomes available and on request of the insurer; or

      (2) the applicant or any secured creditor pays the insurer the amount of the initial premium within 5 business days after the insurer has sent notice to the applicant and any secured creditor that the check or other remittance for the initial premium payment was not honored.

#### Section 12-107

(a) Notwithstanding any provision of this article or other law that specifies the content of policies, the Commissioner may approve and insurers may issue simplified policies of insurance that provide broad coverage of all or various combinations of risks.

(b) The Commissioner shall adopt regulations that:

  (1) specify the standards that must be met by insurers for issuing simplified policies; and

  (2) ensure protections to policyholders and claimants that are not less favorable than protections to which they would be entitled under a substantially similar policy that is not subject to this section.

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