Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance — Subtitle 1
Statutes in effect as of October 1, 2026.
Md. Code Ann., Ins. § 13-101 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–101LinkCopy Citation
(a)
In this title the following words have the meanings indicated.
(b)
“Credit health insurance” means insurance on a debtor that provides indemnity for payments that are due on a specific loan or other credit transaction while the debtor is disabled as defined by the policy.
(c)
“Credit involuntary unemployment benefit insurance” means insurance on a debtor that provides indemnity for payments that are due on a specific loan or other credit transaction while the debtor is involuntarily unemployed as defined by the policy.
(d)
“Credit life insurance” means insurance on the life of a debtor in connection with a specific loan or other credit transaction.
(e)
“Creditor” means:
(1)
a lender of money or vendor or lessor of goods, services, or property rights or privileges for which payment is arranged through a credit transaction;
(2)
a successor to the right, title, or interest of the lender, vendor, or lessor;
(3)
an affiliate, associate, subsidiary, director, officer, or employee of the lender, vendor, or lessor; or
(4)
any other person in any way associated with the lender, vendor, or lessor.
(f)
(1)
“Debtor” means a borrower of money or purchaser or lessee of goods, services, or property rights or privileges for which payment is arranged through a credit transaction.
(2)
“Debtor” includes the husband or wife or both, as specified in the certificate of insurance, if the husband and wife are jointly liable under a contract of indebtedness.
(g)
“Indebtedness” means the total amount payable by a debtor to a creditor in connection with a loan or other credit transaction.
Md. Code Ann., Ins. § 13-102 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–102LinkCopy Citation
(a)
The purpose of this title is to promote the public welfare by regulating credit life insurance, credit health insurance, and credit involuntary unemployment benefit insurance.
(b)
This title is not intended to prohibit or discourage reasonable competition.
(c)
This title shall be construed liberally.
Md. Code Ann., Ins. § 13-103 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–103LinkCopy Citation
(a)
Except as provided in subsection (b) of this section, all credit life insurance, all credit health insurance, and all credit involuntary unemployment benefit insurance are subject to this title.
(b)
This title does not apply to insurance if:
(1)
the insurance is in connection with a loan or other credit transaction for which premiums are payable for more than 10 years; or
(2)
the issuance of the insurance is an isolated transaction by an insurer that is not related to an agreement or plan for insuring debtors of the creditor.
Md. Code Ann., Ins. § 13-104 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–104LinkCopy Citation
Each policy of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance shall be:
(1)
delivered or issued for delivery in the State only by an authorized insurer; and
(2)
issued only through a holder of a license, certificate of authority, or certificate of qualification issued by the Commissioner.
Md. Code Ann., Ins. § 13-105 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–105LinkCopy Citation
Credit life insurance, credit health insurance, and credit involuntary unemployment benefit insurance shall be issued only in the following forms:
(1)
an individual policy of life insurance issued to a debtor on a term plan;
(2)
an individual policy of health insurance issued to a debtor on a term plan;
(3)
a disability benefit provision in an individual policy of credit life insurance;
(4)
an individual policy of involuntary unemployment benefit insurance issued to a debtor on a term plan;
(5)
a group policy of life insurance issued to a creditor that provides insurance on the lives of debtors on the term plan;
(6)
a group policy of health insurance issued to a creditor on a term plan that insures debtors;
(7)
a disability benefit provision in a group policy of credit life insurance; or
(8)
a group policy of involuntary unemployment benefit insurance issued to a creditor on a term plan that insures debtors.
Md. Code Ann., Ins. § 13-106 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–106LinkCopy Citation
(a)
(1)
The initial amount of credit life insurance may not exceed the total amount repayable under the contract of indebtedness.
(2)
Notwithstanding any other provision of this title, insurance on an agricultural credit transaction commitment not exceeding a term of 1 year may be written up to the amount of the loan commitment on a nondecreasing or level term plan.
(3)
Notwithstanding any other provision of the Code, insurance on an educational credit transaction commitment may be written for the amount of that part of the commitment that has not been advanced by the creditor.
(b)
(1)
The total amount of periodic indemnity payable by credit health insurance in the event of disability may not exceed the aggregate of the periodic scheduled unpaid installments of the indebtedness.
(2)
The amount of each periodic indemnity payment under a policy of credit health insurance may not exceed the original indebtedness divided by the number of periodic installments.
Md. Code Ann., Ins. § 13-107 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–107LinkCopy Citation
(a)
(1)
Except as provided in paragraph (2) of this subsection, the term of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance subject to acceptance by the insurer, begins on the date that the debtor becomes obligated to the creditor.
(2)
If a group policy provides coverage for an existing obligation, the credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance begins on the effective date of the group policy.
(b)
If an insurer requires evidence of insurability and the evidence is provided more than 30 days after the debtor becomes obligated to the creditor:
(1)
the term of the credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance may begin on the date that the insurer determines that the evidence is satisfactory; and
(2)
the insurer shall refund or adjust any charge to the debtor for insurance as appropriate.
(c)
(1)
The term of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance may not extend more than 15 days after the scheduled maturity date of the indebtedness, unless the term is extended without additional cost to the debtor.
(2)
If the indebtedness is discharged before its scheduled maturity date due to renewal or refinancing, the insurer shall terminate the credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance in force before issuance of any new credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance for the renewed or refinanced indebtedness.
(3)
The insurer shall pay or credit a refund as provided in § 13-112 of this title in all cases of termination of the insurance before the scheduled maturity date of the indebtedness.
Md. Code Ann., Ins. § 13-108 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–108LinkCopy Citation
(a)
Credit life insurance, credit health insurance, and credit involuntary unemployment benefit insurance shall be evidenced by an individual policy or, in the case of group insurance, a group certificate of insurance.
(b)
In addition to other requirements of law, each individual policy or group certificate of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance shall include:
(1)
the name and home office address of the insurer;
(2)
the name of the insured debtor under an individual policy, or the name or other identification of the insured debtor under a group certificate;
(3)
the premium or amount of payment, if any, paid by the debtor shown separately for credit life insurance, credit health insurance, and credit involuntary unemployment benefit insurance;
(4)
a description of the coverage, including the amount and term of the coverage and any exceptions, limitations, or restrictions; and
(5)
a statement that the benefits shall be paid to the creditor to reduce or extinguish the unpaid indebtedness and, if the amount of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance exceeds the unpaid indebtedness, the excess shall be payable to a beneficiary, other than the creditor, named by the debtor or to the estate of the debtor.
Md. Code Ann., Ins. § 13-109 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–109LinkCopy Citation
(a)
Except as otherwise provided in this section, the individual policy or group certificate of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance shall be delivered to the insured debtor when the indebtedness is incurred.
(b)
(1)
If the individual policy or group certificate is not delivered to the debtor when the indebtedness is incurred, a copy of the application for the policy or a notice of proposed insurance shall be delivered to the debtor when the indebtedness is incurred.
(2)
The application for the policy or notice of proposed insurance shall:
(i)
be signed by the debtor;
(ii)
include:
(1)
the name and home office address of the insurer;
(2)
the name of the insured debtor;
(3)
the premium or amount of payment, if any, paid by the debtor shown separately for credit life insurance, credit health insurance, and credit involuntary unemployment benefit insurance;
(4)
a brief description of the coverage, including the amount and term of the coverage; and
(5)
a statement that the proposed insurance becomes effective under § 13-107 of this title on acceptance by the insurer;
(iii)
refer exclusively to insurance coverage; and
(iv)
be separate from the loan, sale, or other credit statement of account, instrument, or agreement, unless that document sets forth prominently the information required by this paragraph.
(3)
If the insurer accepts the insurance, within 30 days after the date the indebtedness is incurred, the insurer shall cause the individual policy or group certificate to be delivered to the debtor.
(c)
If the named insurer does not accept the risk:
(1)
the debtor shall receive an individual policy or group certificate that sets forth the name and home office address of the substituted insurer, if any, and the amount of the premium to be charged; and
(2)
an appropriate refund shall be made if the amount of the premium charged by the substituted insurer is less than the premium set forth in the notice of proposed insurance.
Md. Code Ann., Ins. § 13-110 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–110LinkCopy Citation
(a)
Each form for a policy, certificate of insurance, notice of proposed insurance, application for insurance, endorsement, or rider delivered or issued for delivery in the State and each related schedule of premium rates shall be filed with the Commissioner for approval.
(b)
(1)
Within 60 days after a form or premium rate described in subsection (a) of this section is filed, the Commissioner shall disapprove the filing if:
(i)
the table of premium rates appears by reasonable assumptions to be excessive in relation to benefits; or
(ii)
the form contains provisions that:
(1)
are unjust, unfair, inequitable, misleading, or deceptive;
(2)
encourage misrepresentation of the coverage; or
(3)
are contrary to a provision of this article or a regulation adopted under this article.
(2)
In making a determination under paragraph (1) of this subsection, the Commissioner shall consider:
(i)
past and prospective loss experience within and outside the State;
(ii)
underwriting practice and judgment to the extent appropriate;
(iii)
a reasonable margin for underwriting profit and contingencies;
(iv)
past and prospective expenses, whether countrywide or specially applicable to the State; and
(v)
all other relevant factors within and outside the State.
(3)
If the Commissioner disapproves a form or premium rate, the Commissioner shall:
(i)
notify the insurer of the disapproval and specify in the notice the reason for disapproval; and
(ii)
state that a hearing on the disapproval will be held within 20 days after receipt of a written request by the insurer.
(4)
After notification of disapproval, an insurer may not issue or use the disapproved form or premium rate.
(c)
An insurer may not issue or use a form or premium rate filed under this section until the end of the 60–day period unless the Commissioner approves the filing in writing before the end of the period.
(d)
(1)
The Commissioner may withdraw approval of a form or premium rate if the Commissioner:
(i)
notifies the insurer in writing of the proposed withdrawal;
(ii)
specifies in the notice the reason for withdrawal;
(iii)
states that a hearing on the withdrawal will be held not less than 20 days after the date of the notice; and
(iv)
bases the withdrawal of approval on a ground set forth in subsection (b)(1) of this section.
(2)
An insurer may not issue or use a form or premium rate after the effective date of withdrawal of approval by the Commissioner.
(e)
(1)
If a group policy of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance was delivered in the State before April 28, 1970, or is delivered in another state, the insurer shall file with the Commissioner only the group certificate and notice of proposed insurance that have been delivered or issued for delivery in this State.
(2)
The Commissioner shall approve the group certificate and notice of proposed insurance if:
(i)
the group certificate and notice conform with §§ 13-108(b) and 13-109(b) of this title; and
(ii)
the schedule of premium rates for the group insurance does not exceed the schedule of premium rates that the insurer has filed with the Commissioner.
(f)
(1)
The purpose of this subsection is to ensure that the credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance operations of the insurer do not:
(i)
result in rates that are excessive in relation to benefits;
(ii)
endanger the solvency of the insurer so that its transaction of business is hazardous to its policyholders or the public; or
(iii)
adversely affect another class of business of the insurer.
(2)
To accomplish this purpose, the Commissioner may establish:
(i)
the maximum rates of commission or other compensation that may be paid to insurance producers; and
(ii)
standards for the maximum amounts of dividends, retrospective rate credits, and any other form of refund or benefit to policyholders.
(g)
An order of the Commissioner under this section is subject to judicial review in accordance with § 2-215 of this article.
Md. Code Ann., Ins. § 13-111 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–111LinkCopy Citation
(a)
(1)
In this section the following words have the meanings indicated.
(2)
“Account” means the coverage for a single plan of benefits under one premium payment method offered to a single class of business by one creditor written on a group or individual basis or both.
(3)
“Case” means an account of an insurer or, at the option of the insurer, a combination of accounts of the insurer written under an identical plan of benefits for which the premiums for the account or combination of accounts exceed, or reasonably may be expected to exceed, $50,000 in a policy year.
(4)
“Class of business” means:
(i)
cash loans made by banks and not secured by real estate;
(ii)
cash loans made by banks and secured by real estate;
(iii)
cash loans made by credit unions;
(iv)
cash loans made by creditors other than banks and credit unions and not secured by real estate;
(v)
cash loans made by creditors other than banks and secured by real estate;
(vi)
production credit association and other agricultural loans;
(vii)
installment sales finance contracts; or
(viii)
open end credit, including revolving charge agreements and credit card accounts.
(5)
“Experience period” means 2 calendar years or, at the option of the insurer, 2 policy years under a group policy issued to one creditor.
(6)
“Loss ratio” means the ratio of incurred claims to premiums earned.
(b)
(1)
An insurer may revise its schedules of premium rates from time to time.
(2)
The insurer shall file any revised schedules with the Commissioner for approval.
(3)
An insurer may not issue a policy of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance if the premium rate exceeds the premium rate contained in the schedules of the insurer on file with the Commissioner.
(4)
If the Commissioner approves the premium rate for a policy of credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance under § 13-110 of this title, the premium rate is presumed to be reasonable in relation to benefits.
(c)
The amount charged to a debtor for credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance may not exceed the aggregate of the premiums to be charged by the insurer, as computed at the time the charge to the debtor is determined.
(d)
(1)
Within 120 days after the expiration of an experience period established for a case, the insurer shall file with the Commissioner an appropriate experience report that is signed by the actuary of the insurer certifying the loss ratio for the case.
(2)
If the loss ratio certified for a case under paragraph (1) of this subsection satisfies the loss ratio guideline adopted by the Commissioner, the insurer may continue to charge the existing premium rate.
(3)
If the loss ratio certified for a case under paragraph (1) of this subsection is less than the loss ratio guideline, the insurer shall:
(i)
reduce the premium rate appropriately with an effective date within 45 days after the experience report was filed under paragraph (1) of this subsection; or
(ii)
show cause to the Commissioner why the premium rate should not be reduced.
(4)
(i)
If the loss ratio certified for a case under paragraph (1) of this subsection is less than the loss ratio guideline, and the insurer refuses to reduce the premium rate, then after notice and an opportunity for a hearing, and within 60 days after the insurer filed the experience report, the Commissioner shall notify the insurer in writing of the premium rate authorized for use with the case.
(ii)
The insurer shall implement the premium rate authorized by the Commissioner not later than 45 days after receipt of the notice from the Commissioner.
(e)
(1)
Every 2 years the Commissioner shall adopt a prima facie acceptable premium rate applicable to each specific plan of benefits for each class of business for:
(i)
a new case;
(ii)
a case that does not satisfy the experience period requirement; and
(iii)
any business that is not a case because premiums do not exceed $50,000 in a policy year.
(2)
The prima facie premium rates shall be adopted after notice and hearing.
(3)
The prima facie premium rates shall be based on experience for each class of business reported by all insurers that write credit life insurance, credit health insurance, and credit involuntary unemployment benefit insurance in the State, excluding experience for which premium rates are established by case.
(4)
The adoption of a prima facie rate by the Commissioner does not prohibit an insurer from filing another premium rate for use with a new case in accordance with § 13-110 of this title.
(f)
This title does not authorize payments for insurance prohibited under a statute or regulation that governs credit transactions.
Md. Code Ann., Ins. § 13-112 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–112LinkCopy Citation
(a)
(1)
Subject to paragraph (3) of this subsection, each individual policy or group certificate shall provide that any refund of the amount paid by the debtor for credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance will be paid or credited promptly to the person entitled to it if the insurance is terminated before the scheduled maturity date of the indebtedness.
(2)
The formula to be used in computing a refund shall be filed with and approved by the Commissioner.
(3)
The Commissioner shall establish a minimum refund, below which an insurer need not make a refund.
(b)
If a creditor requires a debtor to make a payment for credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance and an individual policy or group certificate is not issued, the creditor immediately shall give written notice to the debtor and promptly shall make an appropriate credit to the debtor’s account.
Md. Code Ann., Ins. § 13-113 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–113LinkCopy Citation
(a)
(1)
A claimant shall report a claim promptly to the insurer or its designated claim representative.
(2)
The insurer shall maintain adequate claim files.
(3)
The insurer shall settle a claim as soon as possible and in accordance with the terms of the insurance contract.
(b)
The insurer shall pay a claim by a draft drawn on the insurer or by a check of the insurer to the order of:
(1)
the claimant to whom payment of the claim is due under the policy; or
(2)
a person to whom the claimant directs payment be made.
(c)
(1)
A plan or arrangement may not be used if it authorizes a person other than the insurer or its designated claim representative to settle or adjust claims.
(2)
The creditor may not be designated as the claim representative of the insurer to adjust a claim.
(3)
Notwithstanding paragraph (2) of this subsection, by arrangement with the group insurer, a group policyholder may draw a draft or check in payment of a claim due to the group policyholder subject to audit and review by the group insurer.
Md. Code Ann., Ins. § 13-114 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–114LinkCopy Citation
(a)
(1)
If a creditor requires credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance as additional security for an indebtedness, the debtor may:
(i)
provide the required coverage through existing policies that the debtor owns or controls; or
(ii)
procure and provide the required coverage through any authorized insurer.
(2)
At any time during the credit transaction by giving notice to the creditor, the debtor may choose to provide the required coverage.
(b)
(1)
On consummation of a credit transaction in which a creditor requires as additional security for an indebtedness, and a debtor agrees to buy, credit life insurance, credit health insurance, or credit involuntary unemployment benefit insurance, the creditor shall notify the debtor in writing of the option referred to in subsection (a) of this section.
(2)
The debtor shall acknowledge in writing that the debtor has received notice under paragraph (1) of this subsection.
Md. Code Ann., Ins. § 13-115 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–115LinkCopy Citation
A creditor may not require that both a husband and wife be insured unless the debtor expressly authorizes that coverage in writing.
Md. Code Ann., Ins. § 13-116 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–116LinkCopy Citation
(a)
An authorized insurer that issues coverage under this title may not engage in fronting agreements with unauthorized insurers with respect to any insurance written or issued in the State under which the authorized insurer by reinsurance or otherwise transfers to one or more unauthorized insurers:
(1)
substantially the entire risk of loss under substantially all of the insurance written by the authorized insurer in the State;
(2)
all of a kind, line, type, or class of insurance;
(3)
all of the business produced through an insurance producer or agency;
(4)
all of the business in a designated geographical area; or
(5)
all of the business written on a policy form.
(b)
(1)
This section does not apply to an unauthorized insurer if the unauthorized insurer:
(i)
files an annual statement with the Commissioner in accordance with § 4–116 of this article;
(ii)
maintains reserves on its life insurance and health insurance business in accordance with § 5–203 and Title 5, Subtitle 3 of this article;
(iii)
meets the requirements of Title 5, Subtitles 1 through 5 of this article with regard to the valuation of its assets and liabilities;
(iv)
allows examination by the Commissioner in accordance with §§ 2–205 through 2–209 of this article; and
(v)
has maintained on its behalf security on deposit with the Commissioner equal to the amount by which the capital and surplus required of an authorized insurer under §§ 4–104 and 4–105 of this article exceeds the actual capital and surplus of the unauthorized insurer.
(2)
The security required under paragraph (1)(v) of this subsection may consist of:
(i)
cash;
(ii)
an irrevocable letter of credit issued by a bank domiciled in the State that may be terminated only after 30 days’ written notice sent by certified mail or electronic means in accordance with § 2–116 of this article to the Commissioner;
(iii)
obligations, valued at the lower of market value or par value, that are general obligations of, or obligations guaranteed by, the federal government, the State, or a political subdivision of the State; or
(iv)
any other type of security that would be acceptable to the Commissioner if posted by a domestic insurer or foreign insurer.
Md. Code Ann., Ins. § 13-117 (2026)
Title 13. Credit Life, Health, and Involuntary Unemployment Benefit Insurance
Subtitle 1
§ 13–117LinkCopy Citation
(a)
After notice and hearing, the Commissioner may adopt regulations to carry out this title.
(b)
If the Commissioner finds that an insurer or other person authorized or licensed by the Commissioner has violated this title or a regulation adopted under this title, then after written notice and a hearing, the Commissioner shall:
(1)
set forth the details of the findings; and
(2)
issue an order for compliance by a specified date.
(c)
An order issued under subsection (b) of this section binds the insurer or other person authorized or licensed by the Commissioner on the date specified unless:
(1)
the Commissioner withdraws the order before the specified date; or
(2)
a court of competent jurisdiction orders a stay of the order of the Commissioner.
(d)
(1)
A party to a proceeding under this title that is aggrieved by an order of the Commissioner is entitled to judicial review in accordance with § 2-215 of this article.
(2)
The filing of an appeal from the withdrawal of approval of a form or rate previously in use operates as a stay, unless the court determines otherwise.
(e)
In addition to any other penalty provided by law, on proof satisfactory to the court, the court may impose on an insurer or other person that violates a final order of the Commissioner while the order is in effect a civil penalty not exceeding $250, or if the violation is willful, a civil penalty not exceeding $1,000.
(f)
(1)
After notice and a hearing, the Commissioner may suspend or revoke the license, certificate of authority, or certificate of qualification of an insurer or other person that violates a final order of the Commissioner.
(2)
The order for suspension or revocation is subject to judicial review in accordance with § 2-215 of this article.