# Insurance (GIN)

## Title 20. Maryland Automobile Insurance Fund

### Subtitle 1. Definitions

#### Section 20-101

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

(b) "Association" means the Industry Automobile Insurance Association.

(c)

  (1) "Association member" means an insurer that is licensed to write motor vehicle liability insurance or motor vehicle physical damage insurance in the State.

  (2) "Association member" does not include the Fund.

(d) "Board of Directors" means the Board of Directors of the Association.

(e) "Board of Trustees" means the Board of Trustees of the Fund.

(f) "Executive Director" means the Executive Director of the Fund.

(g) "Fund" means the Maryland Automobile Insurance Fund.

(h) "Motor vehicle liability insurance" means insurance coverage that is reported as private passenger auto no-fault, other private passenger auto liability, commercial auto no-fault, or other commercial auto liability on the exhibit of premiums and losses page of the annual statement that Association members are required to file with the Commissioner.

(i) "Motor vehicle physical damage insurance" means insurance coverage that is reported as private passenger auto physical damage or commercial auto physical damage on the exhibit of premiums and losses page of the annual statement that Association members are required to file with the Commissioner.

(j) "Person" includes a governmental unit.

(k) "Uninsured Division" means the unit within the Fund that is responsible for claims under Subtitle 6 of this title and activities related to reducing the rate of uninsured motorists in the State.

(l) "Uninsured motor vehicle" means a motor vehicle for which:

  (1) the security required under Sec. 17-103 of the Transportation Article is not in force; or

  (2) the security required under Sec. 17-103 of the Transportation Article is in force but a receiver or conservator has been appointed by a court for the insurer that issued the security.

### Subtitle 2. Administration of Fund

#### Section 20-201

(a) There is a Maryland Automobile Insurance Fund.

(b) The Fund is independent of all State units.

(c) The Fund is a member of the Property and Casualty Insurance Guaranty Corporation.

(d)

  (1) Except as otherwise provided by law, the Fund is subject to the provisions of this article.

  (2) Except as provided in paragraph (3) of this subsection, the Fund is not subject to any law, including Sec. 6-106 of the State Government Article, that affects governmental units.

  (3) The Fund is subject to:

    (i) Title 4 of the General Provisions Article;

    (ii) the Maryland Public Ethics Law;

    (iii) Title 10, Subtitle 1 of the State Government Article with respect to regulations adopted under Subtitle 6 of this title;

    (iv) Title 12 of the State Government Article; and

    (v) Title 5, Subtitle 3 of the State Personnel and Pensions Article.

  (4) Paragraph (2) of this subsection does not affect the exemption from property tax under Sec. 7-210 of the Tax - Property Article.

#### Section 20-202

(a) There is a Board of Trustees of the Fund.

(b)

  (1) The Board of Trustees consists of nine members appointed by the Governor with the advice and consent of the Senate.

  (2) Of the nine members:

    (i) at least three shall have insurance industry expertise; and

    (ii) at least two shall have financial management expertise.

  (3) Of the members described in paragraph (2)(i) of this subsection, at least one shall be appointed from a list of two or more individuals recommended by the Board of Directors.

(c) A member may not be actively affiliated with an insurance agency, insurance producer, insurer, or premium finance company that does business with the Fund.

(d)

  (1) Each member shall be a resident of the State.

  (2) In deciding which individuals to appoint, the Governor, to the extent practicable, shall consider the geographic and demographic, including race and gender, diversity of the State.

(e) Before taking office, each appointee to the Board of Trustees shall take the oath required by Article I, Sec. 9 of the Maryland Constitution.

(f)

  (1) The term of a member is 5 years.

  (2) The terms of members are staggered as required by the terms provided for members of the Board of Trustees on October 1, 2013.

  (3) At the end of a term, a member continues to serve until a successor is appointed and qualifies.

  (4) A member may not serve for more than:

    (i) two full terms; or

    (ii) a total of 10 years.

  (5) If a member of the Board of Trustees ceases to be a member of the Board, the Governor shall appoint a successor for the unexpired term.

(g) The Board of Trustees shall choose a chair from among its members.

(h) The Governor may remove a member of the Board of Trustees for incompetence or misconduct.

(i)

  (1) Each member of the Board of Trustees is entitled to:

    (i) reasonable compensation:

      (1) in the form of salary for work performed for the benefit of the Fund; and

      (2) as provided in the budget of the Board of Trustees; and

    (ii) reimbursement for expenses:

      (1) incurred in the performance of the member's duties; and

      (2) as provided in the budget of the Board of Trustees.

  (2) Nothing in paragraph (1)(i) of this subsection requires a member of the Board of Trustees to take compensation if the member has a conflict of interest with other employment that precludes the member from taking compensation for work performed for the benefit of the Fund.

(j) The Board of Trustees:

  (1) shall adopt rules, bylaws, and procedures; and

  (2) may adopt any policy to carry out this title.

#### Section 20-203

(a)

  (1) The Board of Trustees shall:

    (i) appoint the Executive Director of the Fund; and

    (ii) employ attorneys to advise and represent the Fund in all legal matters and, where necessary, to sue or defend suits in the name of the Fund.

  (2) The Executive Director serves at the pleasure of the Board of Trustees.

  (3) If the Board of Trustees fails to agree on a successor Executive Director, the Governor shall appoint the successor.

(b)

  (1) The Executive Director:

    (i) is the administrative head of the Fund; and

    (ii) shall exercise the powers and perform the duties conferred on the Fund by this title, except for those powers and duties conferred on the Board of Trustees.

  (2) The Board of Trustees shall advise the Executive Director on the exercise of the powers and duties conferred on the Executive Director by this title.

(c) The Board of Trustees shall determine the compensation of the Executive Director.

#### Section 20-204

(a)

  (1) Except as provided in paragraph (2) of this subsection, employees of the Fund are not in the State Personnel Management System.

  (2) A skilled service employee of the Fund hired before July 1, 2013, in a nonprofessional or nontechnical position shall remain in the skilled service in the State Personnel Management System or its equivalent as long as the employee remains in a nonprofessional or nontechnical position with the Fund.

  (3) The Executive Director shall appoint and remove employees of the Fund in accordance with the policies of the Board of Trustees.

  (4) Notwithstanding any other provision of law, the Executive Director may appoint claims adjusters, attorneys, and other necessary personnel directly as employees or on a contract basis.

(b) The Executive Director shall determine and administer the compensation of the employees of the Fund with the approval of the Board of Trustees.

(c) Except as otherwise provided in this subtitle, an employee of the Fund is not subject to any law, regulation, or executive order governing State employee compensation, including furloughs, salary reductions, and any other General Fund cost-saving measure.

### Subtitle 3. Purpose and General Provisions

#### Section 20-301

(a) The purpose of the Fund is to provide the financial security required under Sec. 17-103 of the Transportation Article to those eligible persons that are unable to obtain it from an Association member.

(b) Money of the Fund consists of revenues, premiums, and other receipts provided by law.

(c)

  (1) All operating expenses of the Fund shall be paid from the money collected by or for the Fund.

  (2)

    (i) Subject to subparagraphs (ii) through (iv) of this paragraph, money and property available to the Fund may be used for the general purposes of the Fund.

    (ii) Premiums collected and income accruing from those premiums may be used only for the payment of claims arising under policies issued by the Fund and for the administrative expenses of the Fund.

    (iii) The Fund shall keep separate records of any income and expenses directly attributable to the Uninsured Division, including the processing and payment of unsatisfied claims under Subtitle 6 of this title.

    (iv) The Fund shall keep separate records of any income and expenses directly attributable to its commercial policy and claims operations.

#### Section 20-302

(a) The account of the Fund is a special fund account and is not a part of the State Treasury.

(b) The State may not provide General Fund appropriations to the Fund.

(c) The debts and obligations of the Fund are not a debt of the State or a pledge of the credit of the State.

#### Section 20-303

(a)

  (1) A financial management committee of the Fund shall manage and invest all money collected by or for the Fund through premiums, earnings from investments, or from other sources.

  (2) The financial management committee consists of the Executive Director and two members of the Board of Trustees who have financial management expertise, chosen by the Board of Trustees.

(b)

  (1) Whenever the amount of money in the Fund exceeds the amount that the Executive Director believes is likely to be required immediately, the financial management committee may manage the excess as it considers appropriate and invest the excess in investments legal for casualty insurers under Sec.Sec. 5-601 through 5-609 of this article.

  (2) If use of the excess becomes necessary or expedient, the financial management committee may collect, sell, or otherwise realize on the investment and any accrued interest.

(c)

  (1)

    (i) Consistent with minority business purchasing standards applicable to units of State government under the State Finance and Procurement Article and consistent with the fiduciary duties of the financial management committee, the financial management committee shall attempt to use to the greatest extent feasible minority business enterprises to provide brokerage and investment management services to the committee.

    (ii) For purposes of this subsection, brokerage and investment management services shall include services relating to all allocated asset classes.

  (2)

    (i) To assist it in achieving the goal described under paragraph (1) of this subsection, the financial management committee shall undertake measures to remove any barriers that limit full participation by minority business enterprises in brokerage and investment management services opportunities afforded by the Fund.

    (ii) The measures undertaken by the financial management committee shall include the use of a wide variety of media, including the Fund's website, to provide notice to a broad and varied range of potential providers about the brokerage and investment management services opportunities afforded by the Fund.

  (3) In conjunction with the Governor's Office of Small, Minority, and Women Business Affairs, the financial management committee shall develop guidelines to assist the committee in identifying and evaluating qualified minority business enterprises in order to help the Fund achieve the objective for greater use of minority business enterprises for brokerage and investment management services.

  (4) On or before September 1 each year, the financial management committee shall submit a report to the Governor's Office of Small, Minority, and Women Business Affairs and, subject to Sec. 2-1257 of the State Government Article, the General Assembly on:

    (i) the identity of the minority business enterprise brokerage and investment management services firms used by the financial management committee in the immediately preceding fiscal year;

    (ii) the percentage and dollar value of the Fund assets that are under the investment control of minority business enterprise brokerage and investment management services firms in each allocated asset class; and

    (iii) the measures the financial management committee undertook in the immediately preceding fiscal year in accordance with paragraph (2)(ii) of this subsection.

#### Section 20-304

(a)

  (1) An audit committee, composed of members of the Board of Trustees, shall require the Fund's internal auditor to conduct fiscal compliance and fiscal audits of the accounts and transactions of the Fund each year.

  (2) A fiscal compliance audit shall:

    (i) examine financial transactions and records and internal controls;

    (ii) evaluate compliance with applicable laws and regulations; and

    (iii) examine electronic data processing operations.

(b) If an independent auditor conducts a fiscal audit of the Fund, the audit committee shall direct the Fund's internal auditors not to duplicate the fiscal audit for the same period.

#### Section 20-305

(a) The Fund shall provide each commercial policyholder with a notice stating the expiration date of the current policy at least 45 days before the expiration of the current policy.

(b) If a commercial policyholder requests a rewritten policy with the Fund and the policyholder's fund producer is unable to generate a new rewritten policy quote without the assistance of the Fund, the Fund shall provide the policyholder's fund producer with a rewritten policy quote within 7 days after the Fund has received all necessary information from the fund producer.

#### Section 20-306

(a) In this section, "company action level RBC" has the meaning stated in Sec. 4-301(n)(1) of this article.

(b) The Fund shall calculate and report its RBC level in accordance with Title 4, Subtitle 3 of this article.

(c) Beginning December 31, 2026, the Fund shall maintain total adjusted capital, as defined in Sec. 4-301(r) of this article, in an amount that is greater than or equal to its company action level RBC.

### Subtitle 4. Industry Automobile Insurance Association

#### Section 20-401

There is an Industry Automobile Insurance Association.

#### Section 20-402

(a) The Association consists of all insurers except for the Fund that are licensed to write on a direct basis motor vehicle liability insurance or motor vehicle physical damage insurance in the State.

(b) As a condition of its authority to write motor vehicle liability insurance or motor vehicle physical damage insurance in the State, an insurer must be and remain an Association member.

#### Section 20-403

(a) There is a Board of Directors to administer the Association.

(b)

  (1) The Board of Directors consists of nine members elected by Association members.

  (2) Of the nine members of the Board of Directors:

    (i) four shall be nominated by the American Property Casualty Insurance Association;

    (ii) one shall be associated with a domestic insurer that is not affiliated with the American Property Casualty Insurance Association;

    (iii) two may not be affiliated with a member company of the American Property Casualty Insurance Association or with a domestic insurer that is otherwise represented on the Board of Directors; and

    (iv) two shall be nominated by the members of the Board of Directors selected under items (i) through (iii) of this paragraph.

  (3) The term of a member of the Board of Directors is 1 year.

  (4) If the American Property Casualty Insurance Association fails to submit the name of a nominee at least 10 days before the election, the requirement that four directors be from among nominees of that group need not be met for that year.

#### Section 20-404

(a) On or before March 15 of each year, the Fund shall determine and the Board of Trustees shall certify to the Board of Directors the information required under subsections (b) and (c) of this section.

(b) Subject to subsection (f) of this section, the following information certified to the Board of Directors shall be separately identified by commercial auto and private passenger auto results:

  (1) the statutory operating loss for the immediately preceding calendar year;

  (2) a calculation to yield a private passenger auto assessment limit that is determined by subtracting the year-end total surplus of the Fund for the immediately preceding calendar year from an amount equal to 25% of the average of net direct written private passenger auto premiums of the Fund for each of the three immediately preceding calendar years; and

  (3) a calculation to yield a commercial auto assessment limit that is determined by subtracting the year-end commercial auto surplus of the Fund for the immediately preceding calendar year from an amount equal to 25% of the average of net direct written commercial auto premiums of the Fund for each of the 3 immediately preceding calendar years.

(c) The assessment certified to the Board of Directors shall be equal to:

  (1) subject to subsection (d) of this section, the assessment limit, if the assessment limit is less than or equal to the statutory operating loss; or

  (2) the statutory operating loss, if the assessment limit is greater than the statutory operating loss.

(d) If the calculation under subsection (b)(2) of this section yields a number that is less than or equal to zero, the assessment limit is zero.

(e) The statutory operating loss or assessment certified to the Board of Directors may not include:

  (1) assessment money received for a prior year; or

  (2) money transferred between the commercial auto and private passenger auto divisions within the Fund.

(f) In a calculation made under this section, income or expenses not clearly attributable to either commercial auto or private passenger auto may be allocated pro rata for that year.

(g) Promptly after the certification of an assessment by the Board of Trustees for commercial auto or private passenger auto under subsection (c) of this section the Board of Directors shall notify the Commissioner of the certification.

(h) On the Commissioner's verification of the Board of Trustees' certification, the Board of Directors shall authorize the Fund to withdraw:

  (1) an amount equal to the commercial auto or private passenger auto assessment, if the assessment balance for that portion exceeds the assessment; or

  (2) the entire commercial auto or private passenger auto balance, if the assessment equals or exceeds the balance for that portion.

(i) Association members may not be subject to an annual assessment if the amount of money held by the Fund from a prior overassessment is equal to or greater than the assessment.

(j) Association members are subject to an annual assessment under Sec. 20-405 of this subtitle if the amount of money held by the Fund from a prior overassessment is less than the assessment, based on the difference between:

  (1) the commercial auto assessment or private passenger auto assessment; and

  (2) the applicable amount of money held by the Fund from a prior overassessment.

(k)

  (1) On June 1, 2023, the Board of Directors shall authorize the Fund to withdraw from the money held by the Fund from a prior overassessment.

  (2) The funds withdrawn:

    (i) shall be allocated to the surplus of the Fund; and

    (ii) may not be credited to Association members.

(l) On or before July 1, 2023, the Fund shall submit a report to the General Assembly, in accordance with Sec. 2-1257 of the State Government Article, on the application of the funds withdrawn under this section and all fund balances in the Fund's Insured and Uninsured Divisions.

#### Section 20-405

(a) In this section, "net direct written premiums" means direct gross premiums written on all policies of motor vehicle liability insurance and motor vehicle physical damage insurance less return premiums or dividends paid or credited to policyholders with respect to those policies.

(b) On or before June 30 of each year in which the Board of Directors receives the certification of an actual commercial auto or private passenger auto assessment for a preceding calendar year, the Board of Directors shall perform the duties specified in this section.

(c) The Board of Directors shall obtain from the Commissioner the aggregate net direct written premiums of all Association members during the most recent calendar year determined by the Commissioner for commercial auto and private passenger auto divisions of motor vehicle liability insurance and motor vehicle physical damage insurance.

(d)

  (1) The Board of Directors shall calculate assessment allocation percentages for commercial auto and private passenger auto divisions by dividing the most recent certified assessment for commercial auto and private passenger auto divisions by the total of:

    (i) the respective aggregate net direct written premiums obtained under subsection (c) of this section; and

    (ii) the respective total net direct written premiums of the Fund for the same period.

  (2) The assessment allocation percentage for the private passenger auto division may not exceed 3%.

(e) The Board of Directors shall give notice of the assessment allocation percentages determined under this section to the Fund, the Commissioner, and all Association members.

(f) The Board of Directors promptly shall assess and collect from each Association member for the commercial auto and private passenger auto divisions an assessment obtained by:

  (1) multiplying the Association member's net direct written premiums in each division for the most recent calendar year determined by the Commissioner by the appropriate assessment allocation percentage, calculated under subsection (d) of this section; and

  (2) adjusting the resulting product for any shortfall experienced by the Association member for the previous applicable surcharge year.

(g) An Association member may deduct an assessment payment from a retaliatory tax but may not deduct the payment from any other assessment or tax required by law.

(h)

  (1) The Association:

    (i) first, shall deposit the certified assessment into the Insufficiency Assessment Reserve Fund that is created under Sec. 20-410 of this subtitle and apply the appropriate parts of the certified assessment to the private passenger auto and commercial auto divisions of the Insufficiency Assessment Reserve Fund; and

    (ii) then, shall pay to the Fund the entire certified assessment in one sum, less the part of the certified assessment allocated to the Fund.

  (2) Any money in the Insufficiency Assessment Reserve Fund from a previous year shall be paid to the Fund on December 31 of each year.

#### Section 20-406

(a)

  (1) The Commissioner promptly shall review the assessment allocation percentages calculated by the Association.

  (2) Unless the Commissioner finds the calculation to be inaccurate, the Commissioner shall authorize each Association member to impose an assessment surcharge on each policy of motor vehicle liability insurance or motor vehicle physical damage insurance that is written or renewed in the State during the 1-year period beginning on the next July 1 following notice of the assessment.

  (3) Subject to Sec. 20-407 of this subtitle, the assessment surcharge shall be calculated by applying the appropriate assessment allocation percentage that is adjusted for any excess or shortfall to the premium at the inception or renewal of the policy.

  (4) The assessment surcharge may not be:

    (i) subject to change or refund; or

    (ii) considered premium income for the State premium tax or the payment of commissions.

(b)

  (1) In conformity with Sec.Sec. 20-405 through 20-409 of this subtitle, each year the Fund shall impose an assessment surcharge on all of its policyholders as if the Fund were a member of the Association.

  (2) The Fund may not make a payment to the Insufficiency Assessment Reserve Fund.

  (3) The Fund shall account separately for the assessment surcharges that the Fund assesses and receives.

#### Section 20-407

(a) On or before June 30 of each year, each Association member shall elect whether to recoup its share of the assessment for the immediately preceding year by imposing an assessment surcharge, where appropriate, on each of the Association member's commercial auto policyholders or private passenger auto policyholders, or both.

(b) An Association member that does not elect on or before June 30 to recoup its share of an assessment is considered to have recouped that assessment and to have waived its option to impose an assessment surcharge on its policyholders.

(c)

  (1) This section does not deny an Association member the right to:

    (i) absorb an annual assessment; or

    (ii) recover all or part of an annual assessment as costs in rate filings made under this article.

  (2) An Association member that recovers assessments as costs in rate filings shall identify the assessment on any premium billing to the policyholder.

#### Section 20-408

(a)

  (1) Each Association member shall apply and collect any assessment surcharge that the Association member elects to recoup under Sec. 20-407 of this subtitle.

  (2) Policyholders of an Association member shall receive any excess surcharge credits and may be charged for any surcharge shortfall that the Association member receives from or is charged by the Association.

(b)

  (1) If an Association member elects on or before June 30 to recoup its share of an assessment, the Association member must identify clearly the assessment surcharge imposed on its policyholders by stating on the premium billing of each policyholder: "Recoupment of MAIF assessment, $_____".

  (2) No other statement may accompany the premium billing.

(c) Each Association member shall:

  (1) report quarterly to the Association; and

  (2) require an officer of the Association member to certify, in the manner required by the Board of Directors, that any amounts collected and paid are an accurate accounting of the assessment surcharges of the Association member.

(d)

  (1) Each Association member may keep separate and detailed records of any expenses actually incurred that are directly attributable to collection of the assessment surcharge authorized under subsection (a) of this section.

  (2) The Commissioner shall consider verified and relevant expenses to be appropriate cost items in a subsequent rate filing by the Association member.

(e) If a policyholder fails to pay the assessment surcharge when due, the Association member may cancel the policy in accordance with the terms of the policy for nonpayment of premium.

#### Section 20-409

(a) If the aggregate amount of assessment surcharges received by an Association member during a surcharge year is less than that Association member's assessment payment, the Association member's assessment surcharge authorized under Sec. 20-406 of this subtitle shall be increased accordingly for the next appropriate surcharge year.

(b)

  (1) If the aggregate amount of assessment surcharges received by an Association member during a recoupment year exceeds the Association member's assessment payment, the Association shall promptly return the excess to the association member.

  (2) An Association member to whom an excess is returned under paragraph (1) of this subsection shall:

    (i) refund the excess to the policyholders who paid the excess; or

    (ii) apply the excess as an expense reduction in a subsequent rate filing.

#### Section 20-410

(a) There is an Insufficiency Assessment Reserve Fund.

(b) The Insufficiency Assessment Reserve Fund shall be maintained by the Association and shall consist of assessment payments collected by the Association and interest, if any.

(c)

  (1) Except as provided in paragraph (2) of this subsection, the Association shall hold money of the Insufficiency Assessment Reserve Fund in trust in a separate interest-bearing account in a financial institution in the State for the use of the Fund.

  (2) The Association may authorize the financial institution where the money is deposited to invest all or part of the money in investments allowed for casualty insurers, as provided in Sec.Sec. 5-601 through 5-609 of this article.

(d) An Association member shall deposit with the Association any gross excess surcharges received because of a future assessment not later than October 15 after the surcharge year in which the gross excess surcharge was received.

#### Section 20-411

(a) All money that the Fund receives from the Association to pay an assessment during the calendar year shall be considered a direct contribution to surplus for purposes of the annual statement.

(b)

  (1) The Fund shall include in its annual statement to the Commissioner an accounting of all money received during the preceding calendar year from the Insufficiency Assessment Reserve Fund.

  (2) When filing a rate with the Commissioner, the Fund may not consider money that is received from or that remains in the Insufficiency Assessment Reserve Fund.

### Subtitle 5. Policies for Covered Vehicles

#### Section 20-501

(a) In this subtitle, "covered vehicle" means a vehicle for which the Fund is required to provide coverage under this subtitle.

(b) "Covered vehicle" includes:

  (1) any motor vehicle required to be registered under Title 13 of the Transportation Article;

  (2) a moped; and

  (3) a motor scooter.

#### Section 20-502

(a) On payment of the premium set by the Fund, the Fund is authorized to and shall sell, issue, and deliver a policy that provides the security required under Sec. 17-103 of the Transportation Article to a person:

  (1) that owns a covered vehicle registered with the Motor Vehicle Administration, has a license issued by the Motor Vehicle Administration to drive a covered vehicle, or is a lessee under a "lease not intended as security", as defined in Sec. 11-127.2(b) of the Transportation Article;

  (2) that does not owe to the Fund:

    (i) an unpaid premium with respect to a policy that has expired or been canceled; or

    (ii) a claim payment obtained by fraud;

  (3) that:

    (i) has attempted in good faith to obtain a policy that provides the security required under Sec. 17-103 of the Transportation Article from at least two Association members and has been rejected or refused the policy by two Association members for any reason other than nonpayment of premiums;

    (ii) has had a policy that provides the security required under Sec. 17-103 of the Transportation Article canceled or nonrenewed by an Association member for any reason other than nonpayment of premiums; or

    (iii) has had a motor vehicle liability insurance policy but has been uninsured for a continuous period of 12 months or more immediately preceding the effective date of the Fund policy, as verified by a commercial third-party database or a State agency; and

  (4) that meets the requirements of subsection (b) of this section.

(b) To be eligible for a policy issued under this subtitle, a person must:

  (1) be domiciled in the State;

  (2) own, lease, or rent a primary place of residence in the State and, regardless of the person's domicile, reside in the State for more than 1 year;

  (3) maintain a main or branch office or warehouse facility in the State, and base and operate motor vehicles intrastate in the State;

  (4) have filed as a State resident for income tax purposes; or

  (5) have a nonresident permit issued under Sec. 13-402.1(e) of the Transportation Article.

(c)

  (1) Except as provided in paragraph (2) of this subsection, this section does not apply to a person to the extent that the person:

    (i) leases a covered vehicle that is a private passenger vehicle to an individual who does not meet the requirements of subsection (b) of this section; or

    (ii) garages the covered vehicle principally outside of the State.

  (2) This section applies to a person described in paragraph (1) of this subsection who is:

    (i) a member, on active duty, of the uniformed services; or

    (ii) a student enrolled in an accredited school, college, or university or serving a medical internship.

(d) The eligibility of an applicant for insurance from the Fund shall be certified at a time and in a manner approved by the Fund.

(e)

  (1) If a prospective insured fails to qualify under this section, any policy issued is void and a commission may not be paid by the Fund to a fund producer.

  (2)

    (i) Subject to the provisions of subparagraph (ii) of this paragraph, if a person fails to meet the requirements of subsection (b) of this section, the Fund may charge and collect the greater of:

      (1) a policy processing fee to cover its expenses; or

      (2) the amount that the person would have received after the Fund returns to a fund producer, or any other person other than the person who fails to meet the requirements of subsection (b) of this section, any gross unearned premiums that are due under the policy.

    (ii) Prior to charging and collecting a policy processing fee or the amount allowed under subparagraph (i) of this paragraph, the Fund shall refer to the Insurance Fraud Division in the Administration for investigation and possible prosecution of the person who fails to meet the requirements of subsection (b) of this section.

#### Section 20-503

(a) Each policy issued by the Fund shall contain the minimum coverages required under Title 19, Subtitle 5 of this article and may contain other provisions determined by the Executive Director and approved by the Board of Trustees and the Commissioner.

(b) At the time a policy of private passenger auto liability insurance is issued to an applicant, the Fund shall include in the policy a written notice to the applicant that contains the following disclosures:

  (1) the time and the conditions under which the applicant is eligible to seek insurance from an Association member;

  (2) that if the applicant seeks insurance from an Association member, the Association member may not refuse to underwrite the private passenger auto liability insurance risk solely because the applicant or named insured previously obtained insurance from the Fund; and

  (3) that if the applicant seeks insurance from an Association member and the Association member refuses to underwrite the applicant solely because the applicant or named insured previously obtained insurance from the Fund, the applicant may file a complaint with the Commissioner against that Association member.

(c) Whenever the Fund issues a policy of commercial auto liability insurance under this subtitle, the Fund:

  (1) may provide coverages in addition to and in excess of the minimum coverages required by Title 19, Subtitle 5 of this article and by Title 17 of the Transportation Article; but

  (2) is not required to provide coverages in addition to and in excess of the required minimum coverages except to the extent that reinsurance for the additional or excess coverage is available and acceptable to the Fund.

#### Section 20-504

(a)

  (1) In this section, "add-on coverage" means coverages or services sold in connection with a policy issued by the Fund, other than coverages authorized to be offered by the Fund under this subtitle.

  (2) "Add-on coverage" includes:

    (i) rental reimbursement coverage;

    (ii) personal effects theft coverage;

    (iii) collision and comprehensive deductible waiver coverage, other than collision and comprehensive coverages provided by the Fund or other authorized insurers;

    (iv) supplemental hospital benefit coverage;

    (v) emergency living expense coverage;

    (vi) vehicle towing coverage;

    (vii) emergency vehicle repair service coverage; and

    (viii) motor club services.

  (3) "Add-on coverage" does not include fire, life, and health insurance coverages that are not directly related to the underlying motor vehicle insurance coverage and are written by an authorized insurer.

(b)

  (1) At the time coverage provided by the Fund is bound and before any add-on coverage is sold, a fund producer shall provide a clear and conspicuous written disclosure, in the form approved by the Commissioner, that:

    (i) states that the cost of add-on coverage is not part of the premium for the related policy issued by the Fund;

    (ii) includes an itemized list of any add-on coverages to be sold to the insured;

    (iii) states the nature and cost of each add-on coverage to be sold; and

    (iv) states that add-on coverage is optional and is not required under Sec. 17-103 of the Transportation Article.

  (2) Before an insured may purchase add-on coverage, the insured shall expressly consent to the purchase by signing the disclosure form.

(c) On continuation of a policy that includes add-on coverage, an insured need not sign a disclosure form if:

  (1) the number and type of add-on coverages under the continuation do not change from the preceding policy; and

  (2) the insured has signed the original disclosure form.

(d)

  (1) A fund producer may not:

    (i) require an insured or prospective insured to purchase an add-on coverage as a condition to purchasing the related policy issued by the Fund; or

    (ii) sell add-on coverage or any combination of add-on coverages in an amount that exceeds $200 per covered vehicle in connection with a private passenger auto insurance policy.

  (2) A pattern or practice of violations of this section by a fund producer is subject to the same penalties as a violation of Sec. 20-513 of this subtitle.

#### Section 20-505

(a) The Executive Director shall settle, compromise, or defend claims against the Fund.

(b) Notwithstanding Sec. 9-602 of the Criminal Law Article, the Executive Director may authorize an employee of the Fund to record a telephone conversation with a policyholder, witness, claimant, investigating officer, or other interested party if:

  (1) the conversation is relevant to an accident or claim;

  (2) the party to be recorded has or might have information that is relevant to the accident or claim; and

  (3) before recording, the party to be recorded is advised of and consents to the recording.

#### Section 20-506

(a) The Executive Director shall:

  (1) establish and maintain reasonable and adequate reserves for payment of claims against the Fund; and

  (2) use the same criteria as is required for use by an Association member in determining the amount of reserves that are necessary.

(b) At least annually, the Board of Trustees shall review the reasonableness and adequacy of reserves.

#### Section 20-507

(a) Subject to the authority of the Commissioner to determine whether rates are excessive, inadequate, or unfairly discriminatory, as provided in Title 11, Subtitle 2 or Subtitle 3 of this article, the Executive Director shall determine the premiums to be charged on policies issued by the Fund.

(b)

  (1) Except as provided in subsections (c) and (d) of this section, the provisions of Title 11, Subtitle 3 of this article apply to the determination of premiums by the Executive Director and the filing of rates with the Commissioner.

  (2) Notwithstanding Title 11, Subtitle 2 or Subtitle 3 of this article or any other provision of this title, the Executive Director may base premiums on one or both of the following items:

    (i) the number of points accumulated by an insured or applicant for insurance under the point system provided for in Title 16, Subtitle 4 of the Transportation Article; or

    (ii) the prior claims experience of an insured or applicant for insurance.

(c) The provisions of Title 11, Subtitle 2 of this article apply to the determination of premiums by the Executive Director and the filing of rates with the Commissioner:

  (1) between July 1, 2025, and December 31, 2025, both inclusive; and

  (2) beginning January 1, 2026, if the Fund's total adjusted capital is less than the amount required under Sec. 20-306(c) of this title.

(d)

  (1) Premiums for all commercial coverage shall be determined in accordance with this section and Sec. 20-508 of this subtitle.

  (2) Notwithstanding paragraph (1) of this subsection, the rating principles under subsection (e) of this section may not be used to determine the premium for commercial coverage.

(e) In reviewing rates filed by the Fund, the Commissioner shall consider not only the rating principles under Title 11, Subtitle 2 or Subtitle 3 of this article but also the statutory purpose of the Fund under Sec. 20-301 of this title.

(f)

  (1) The Motor Vehicle Administration and Executive Director may arrange for the Motor Vehicle Administration to collect premiums on policies issued by the Fund when the Motor Vehicle Administration issues a driver's license or certificate of registration.

  (2) A premium collected under this subsection shall be paid to the State Treasurer for the account of the Fund.

(g)

  (1) The Fund may not provide directly or indirectly for the financing of premiums.

  (2) A premium may be financed only by a premium finance company registered with the Commissioner in accordance with Sec. 23-201 of this article.

  (3) If a prospective insured's initial payment to the Fund, a fund producer, or premium finance company is not honored, a policy or endorsement issued in reliance on that payment is void.

(h)

  (1)

    (i) Subject to the approval of the Commissioner and in accordance with this subsection, the Fund may accept premiums on an installment payment basis.

    (ii) In approving the Fund's plan for accepting premiums on an installment payment basis, the Commissioner shall:

      (1) consider as factors:

      (A) the percentage of the initial premium payment in comparison to the total premium under the policy;

      (B) the number of installment premium payments accepted on a policy under the installment payment plan; and

      (C) the overall affordability of the installment payment plan in comparison to other payment options available to the policyholder; and

      (2) ensure that the Fund's installment payment plan

      meets the requirements of Sec. 27-216 of this article.

  (2) The Fund may not discriminate among insureds by charging different premiums to insureds who select, as a payment option, the Fund's installment payment plan instead of a premium finance agreement.

  (3) In determining commissions paid to a fund producer, the Fund may not consider whether the fund producer placed an insured in an installment payment plan.

  (4)

    (i) In accordance with this paragraph, written and electronic communications, including the Fund's website, affecting the placement of coverage by the Fund or a fund producer shall include a statement, on a form approved by the Commissioner, advising an applicant or an insured of the payment options available to the applicant or insured.

    (ii) The statement shall state that the applicant or insured has the following payment options:

      (1) the Fund's installment payment plan;

      (2) a premium finance agreement; or

      (3) payment of the policy in full.

    (iii) The statement shall be included on written or electronic communications at the time the applicant or insured:

      (1) is issued a new policy; or

      (2) is issued a reissuance, rewrite, or renewal of an existing policy.

    (iv) The statement shall state that the applicant or insured should consult a fund producer who will fully describe the terms of each payment option.

(i)

  (1) If the Fund makes a change to its plan for accepting premiums on an installment payment basis, within 90 days after the change, the Commissioner shall submit a report to the General Assembly providing the reason for the change.

  (2) The report required under paragraph (1) of this subsection shall:

    (i) include the effect the change will have on the required factors for consideration under subsection (h)(1)(ii)1 of this section; and

    (ii) be submitted in accordance with Sec. 2-1257 of the State Government Article.

#### Section 20-508

(a) A policyholder is entitled to continuation of coverage from the Fund at rates that are reasonably comparable to those charged by standard insurers and approved by the Commissioner if, for 3 continuous years of coverage under a policy issued by the Fund, the policyholder has not:

  (1) been charged with a moving traffic violation;

  (2) had a chargeable traffic accident; and

  (3) been assessed more than one point by the Motor Vehicle Administration.

(b) A policyholder who meets the requirements of subsection (a) of this section is not entitled to a safe driver credit as defined in the rules and rate schedules of the Fund filed with the Commissioner.

(c) In determining eligibility for rates that are reasonably comparable to those charged by standard insurers, the Fund may not consider:

  (1) a lapse in coverage of 30 days or less; and

  (2) the addition of a driver to the policy who has certified in a manner approved by the Fund for the immediately preceding 3 continuous years that the driver has not had a moving traffic violation, has not been assessed more than one point, and has not had a chargeable traffic accident.

#### Section 20-509

(a)

  (1) Subject to this section and the policies adopted by the Board of Trustees that relate to the binding of coverage, a fund producer may bind the minimum required coverage for an applicant in the Fund if the applicant submits an application to the fund producer and pays the appropriate premium.

  (2) To effect coverage, the fund producer must receive payment of the appropriate premium required under the policies adopted by the Board of Trustees that relate to the binding of coverage.

  (3) Payment of the appropriate premium does not occur so as to effect coverage if payment of all or part of the premium is made by an instrument that is later dishonored.

(b)

  (1) The Board of Trustees shall adopt and make available to each fund producer reasonable policies that relate to the authority of fund producers to bind coverage.

  (2) The policies shall include:

    (i) the amount of premium to be collected;

    (ii) the evidence necessary to establish the qualification of an applicant to be insured by the Fund;

    (iii) procedures for notifying the Fund of the binding of coverage; and

    (iv) the time within which the fund producer is to give notice.

(c) The Fund:

  (1) may refuse to grant the authority of a fund producer to an insurance producer that has been previously terminated as a fund producer or that has had its license previously revoked or surrendered; and

  (2) subject to the hearing provisions of Sec. 20-514 of this subtitle, may discipline a fund producer that:

    (i) employs or otherwise retains a person described in item (1) of this subsection; and

    (ii) allows the person to become involved in the fund producer's operations or management contrary to a requirement of this article or order of the Administration.

(d) Subject to subsection (e) of this section, the Fund is liable for coverage from the date that the fund producer binds coverage.

(e)

  (1) On review of an application, the Fund may cancel coverage and refuse to issue a policy if the Fund finds that:

    (i) the applicant is not qualified for insurance issued by the Fund;

    (ii) the applicant has not paid the appropriate premium; or

    (iii) the Fund is authorized to reject the application under Sec. 20-516 of this subtitle.

  (2) Cancellation of coverage may occur not later than 60 days after coverage is effective.

(f) Whenever coverage is canceled:

  (1) the Fund promptly shall notify the applicant, fund producer, and Motor Vehicle Administration of the cancellation;

  (2) the applicant has the right of appeal under Sec. 20-517 of this subtitle; and

  (3) if the cancellation occurred because an applicant did not pay the appropriate premium, the Fund shall give the applicant a reasonable opportunity to pay the appropriate premium.

#### Section 20-510

(a) Each fund producer is a fiduciary as to all premiums, return premiums, or other money that the fund producer receives from any person in connection with a policy or policy application issued by, to be issued by, or bound in the Fund.

(b) Each fund producer shall deposit as trust money into an account for premiums all money received under subsection (a) of this section to be accounted for and paid over to the Fund as the law requires.

#### Section 20-511

(a)

  (1) On application to the Fund for appointment as a fund producer, an applicant shall file with the Fund a bond for the benefit of the Fund for the balance of the current year.

  (2) On or before December 31 of each year, each fund producer shall file with the Fund a bond for the benefit of the Fund for the next succeeding year.

(b) A bond required under this section shall be:

  (1) in the amount of $10,000;

  (2) executed by an authorized surety insurer; and

  (3) conditioned that the fund producer will account for and pay over to the person entitled to it all money belonging to the person that comes into the fund producer's possession in accordance with this subtitle and the regulations that relate to the binding of coverage.

(c)

  (1) A fund producer is considered to have complied with this section if an Association member certifies to the Fund that:

    (i) the Association member has a bond in effect that covers the fund producer and complies with the requirements of this section; and

    (ii) the bond coverage extends to the Fund when persons apply to the Fund for coverage through the fund producer.

  (2) The certification shall be made by an authorized representative of the Association member.

  (3) A copy of the certification shall be mailed promptly to the Fund.

(d) A fund producer's authority to bind coverage in the Fund may be terminated on 10 days' written notice if the bond is not:

  (1) filed with the Fund in a timely manner; or

  (2) continuously maintained in effect while the fund producer has authority to bind coverage in the Fund.

#### Section 20-512

(a) Except as provided in subsection (b) of this section, the Fund shall pay to a fund producer of a policyholder to whom a policy is issued a commission:

  (1) for private passenger auto insurance issued by the Fund, at a rate determined by the Fund but not less than 5% and not to exceed 15% of the total premium; and

  (2) for any other insurance issued by the Fund, at a rate determined by the Fund but not to exceed 10% of the total premium.

(b) The Fund may not pay a commission:

  (1) on a fully earned basis;

  (2) if a prospective insured fails to qualify under Sec. 20-502 of this subtitle;

  (3) if a prospective insured's initial payment to the Fund, a fund producer, or premium finance company is not honored; or

  (4) on a policy written directly by the Fund without the involvement of a fund producer.

(c) If a policy issued by the Fund is canceled, the Fund shall refund any unearned commissions.

#### Section 20-513

The Fund may refuse to accept further applications from a fund producer or may terminate the authority of the fund producer to bind coverage or both if:

(1) the Fund finds that the fund producer has engaged in the practice of binding coverage in the Fund in violation of policies adopted by the Board of Trustees; or

(2) after demand has been made by the Fund, the fund producer fails to pay money owed the Fund as a result of:

  (i) the binding or change of coverage; or

  (ii) a commission paid to the fund producer on a policy that is canceled after the effective date of coverage.

#### Section 20-514

(a) Except as provided in subsection (b) of this section, the Fund shall give prior written notice to a fund producer of its intended action under Sec. 20-513 of this subtitle and give the fund producer an opportunity for a hearing before taking the action.

(b)

  (1) The Fund may exercise immediately any option under Sec. 20-513 of this subtitle if the Fund determines that there is a likelihood of substantial and immediate harm to the Fund, its policyholders, or others because of:

    (i) a violation of a policy adopted by the Board of Trustees that relates to the binding of coverage; or

    (ii) a failure to pay money owed.

  (2) After taking an action under Sec. 20-513 of this subtitle, the Fund promptly shall give notice to the fund producer and hold a hearing within 10 working days before a member of the Board of Trustees.

(c) The Board of Trustees shall adopt policies to provide procedures for notice and hearings under this section.

#### Section 20-515

(a) The Fund may use the Maryland Tax Refund Intercept Program to recover money owed to the Fund by a fund producer if the Fund makes a demand for the money and the fund producer does not make payment.

(b)

  (1) If the Fund makes payment to a claimant, the Fund is subrogated to the rights of the claimant against a responsible party and is entitled to recover all money that the Fund paid out and actual collection costs, including reasonable attorney's fees.

  (2) The Fund may recover from its insureds all past-due premiums and from the responsible party all money that the Fund paid out under this subtitle in any manner provided by law, including the Maryland Tax Refund Intercept Program.

#### Section 20-516

(a) Subject to Sec. 20-517 of this subtitle, the Fund:

  (1) may reject an application of insurance if the applicant owes to the Fund an unpaid premium on an expired or canceled policy;

  (2) at any time may cancel a policy for nonpayment of premiums; or

  (3) may reject an application of insurance or at any time may cancel a policy if it is found that the driver's license of the applicant or policyholder is:

    (i) suspended, unless the suspension is for a first offense under Sec. 16-205.1 of the Transportation Article for driving with an alcohol concentration of 0.08 or more; or

    (ii) revoked.

(b) The Fund shall notify the applicant or policyholder promptly after the Fund rejects an application or cancels a policy.

(c) If a person does not have a valid license or other privilege to drive a covered vehicle in the State, or is otherwise ineligible to be insured by the Fund, the Fund may issue the appropriate policy with an excluded driver endorsement under Sec. 27-609 of this article.

(d)

  (1) The Fund may cancel a policy if:

    (i) the temporary registration issued for the covered vehicle under Sec. 13-405 or Sec. 23-107(b) of the Transportation Article has expired; and

    (ii) the covered vehicle is not otherwise validly registered in the State.

  (2) The cancellation may not take effect until the day after the temporary registration of the covered vehicle expires.

#### Section 20-517

(a) An applicant whose application for insurance has been rejected or a policyholder whose policy has been canceled for a reason other than nonpayment of premiums may appeal the decision to a special board within 10 days after receipt of notice of the rejection or cancellation.

(b)

  (1) The special board consists of two members of the Board of Trustees and the Commissioner or designee of the Commissioner.

  (2) The Executive Director may not sit on the special board.

(c)

  (1) The special board:

    (i) may affirm, reverse, or modify the decision on the record; or

    (ii) on at least 10 days' written notice to the applicant, may hold a hearing and then affirm, reverse, or modify the decision.

  (2) The current policy of a policyholder who appeals the decision to the special board remains in effect until the special board decides the appeal.

(d) The Fund shall notify the Motor Vehicle Administration immediately after:

  (1) the Fund cancels a policy or terminates coverage of an insured; or

  (2) the Fund rejects an application for insurance and the action is final because:

    (i) the rejection was not appealed to the special board; or

    (ii) the special board does not reverse or modify the decision to cancel as to require issuance of a policy.

#### Section 20-518

(a)

  (1) The Executive Director shall refer the status of an insured's driver's license to the Motor Vehicle Administration for a determination whenever the Executive Director finds that the insured, in the last 12-month period, had three or more chargeable accidents under the rules and rate schedules of the Fund filed with the Commissioner involving third-party liability, regardless of the number of points assessed for those accidents.

  (2) The Executive Director may refer any other matter about an insured's driving record to the Motor Vehicle Administration for a determination.

(b) If, after a hearing, the Motor Vehicle Administration suspends or revokes the insured's driver's license, the Executive Director shall cancel or refuse to continue the coverage after having given the notice required under Sec. 27-602 of this article.

(c) If the Motor Vehicle Administration does not suspend or revoke the insured's driver's license under subsection (b) of this section, the Executive Director may not cancel or refuse to continue the coverage of the insured.

#### Section 20-519

If a policy covers a spouse or other household member of the family of the policyholder:

(1) cancellation of the policy of an insured whose driver's license is suspended or revoked does not result in the cancellation of the coverage of the spouse or other family member whose driver's license is not suspended or revoked; and

(2) the Fund shall reclassify the rate of risk of the spouse or other family member for the purpose of setting the premium.

#### Section 20-520

(a) Except as provided in subsection (b) of this section, an insurer that issues, sells, or delivers private passenger motor vehicle insurance in the State may not refuse to issue a policy of private passenger motor vehicle insurance to any person who, for the immediately preceding 3 continuous years:

  (1) has been insured by the Fund;

  (2) has not had a moving traffic violation; and

  (3) has not had a chargeable traffic accident.

(b) Subject to Sec. 27-501 of this article, an insurer may refuse to issue a policy under subsection (a) of this section if the person does not satisfy the insurer's eligibility or underwriting standards.

(c) A person who is entitled to insurance under subsection (a) of this section:

  (1) shall be rated by the insurer in the same manner as any other policyholder not previously insured by the Fund having the same risk characteristics; and

  (2) may not be surcharged or rated by the insurer solely because the person was insured by the Fund.

(d)

  (1) At least 60 days before expiration or renewal of a policy of private passenger motor vehicle insurance, the Fund shall provide written notice to each person entitled to insurance under subsection (a) of this section.

  (2) The notice shall:

    (i) inform the person of the person's right to insurance under subsection (a) of this section;

    (ii) advise the person to contact the fund producer that bound the person's coverage with the Fund during the most recent coverage period;

    (iii) include a copy of a sample rate guide produced by the Administration; and

    (iv) provide the toll-free telephone number established under Sec. 2-109 of this article.

#### Section 20-521

### Subtitle 6. Unsatisfied Claims

#### Section 20-601

(a)

  (1) In this section, "qualified person" means:

    (i) a resident of the State;

    (ii) the owner of a motor vehicle registered in the State, unless the owner is not a resident of the State and the motor vehicle bears temporary registration plates issued under Title 13, Subtitle 6, Part I of the Transportation Article;

    (iii) a resident of another state or foreign country that affords recourse to residents of this State that is substantially similar to that provided under this title; or

    (iv) an individual injured by an uninsured motorist who later files for bankruptcy or other protection from creditors that bars the Fund from a subrogation recovery.

  (2) "Qualified person" does not include:

    (i) an automobile collision insurer or other insurer that seeks by subrogation to recover payment for damages to a motor vehicle or real or other personal property, or injuries to individuals under any insurance coverages, including collision, fire, theft, medical payments, and uninsured motorist coverages;

    (ii) a holder of a certificate of self-insurance under this article; or

    (iii) an insured under a policy provision that:

      (1) provides coverage for damages sustained by the insured as a result of the operation of an uninsured motor vehicle; and

      (2) is authorized to be included in an automobile liability policy delivered or issued for delivery in the State.

(b) To the extent that a policy of motor vehicle liability insurance does not provide coverage, a claim that arises out of circumstances described in subsection (c), (d), or (e) of this section may be made against the Fund if:

  (1) the claim is for:

    (i) damage to property greater than $250; or

    (ii) the death of or personal injury to a qualified person;

  (2)

    (i) at the time of the accident, the claimant was not driving or riding in an uninsured motor vehicle owned by the claimant or a member of the claimant's family who resides in the claimant's household; and

    (ii) the claimant is not the personal representative of the individual who was driving or riding in the uninsured motor vehicle; and

  (3)

    (i) at the time of the accident, the claimant was not driving a motor vehicle with a certificate of registration that was suspended, canceled, or revoked, or was holding a driver's license that was suspended, canceled, or revoked; and

    (ii) the claimant is not the personal representative or a member of the family who resides in the household of the individual who was driving the motor vehicle.

(c) A claim that arises out of the ownership, maintenance, or use of a motor vehicle in the State may be made against the Fund if:

  (1) the requirements of subsection (b) of this section are met;

  (2)

    (i) the identity of the motor vehicle and of its driver and owner cannot be established; or

    (ii) the identity of the individual who was driving the motor vehicle cannot be established and it is established that, at the time of the accident, the motor vehicle was in the possession of an individual other than the owner without the owner's consent;

  (3) the claimant has a cause of action against the driver or owner of the motor vehicle; and

  (4) all reasonable efforts to establish the identity of the motor vehicle and of its owner and driver are unsuccessful.

(d) A claim that arises out of ownership, maintenance, or use of a motor vehicle in the State may be made against the Fund if:

  (1) the requirements of subsection (b) of this section are met;

  (2) the claimant has a cause of action against the driver or owner of the motor vehicle;

  (3) despite all reasonable efforts, the driver or owner of the motor vehicle cannot be located; and

  (4)

    (i) at the time of the accident the motor vehicle was an uninsured motor vehicle; or

    (ii) despite all reasonable efforts, it is impossible to establish whether the motor vehicle was insured.

(e)

  (1) Subject to paragraph (2) of this subsection, a claim that arises out of the ownership, maintenance, or use of a motor vehicle in the State may be made against the Fund if:

    (i) the requirements of subsection (b) of this section are met;

    (ii) the driver or owner of the motor vehicle is uninsured and can be located for service of process;

    (iii)

      (1) the claimant is not the uninsured driver's spouse who resides in the uninsured driver's household or another family member who resides in the uninsured driver's household; and

      (2) the claimant is not the personal representative of the spouse who resided in that household;

    (iv) the claim is not made for damage to or destruction of an uninsured motor vehicle owned wholly or partly by the claimant; and

    (v) the claimant is not eligible to make a claim arising from the same accident against the Property and Casualty Insurance Guaranty Corporation under Title 9, Subtitle 3 of this article.

  (2) A claim under this subsection may not be made by or for:

    (i) an insurer under a policy that makes the insurer liable to pay, wholly or partly, the amount of the claim; or

    (ii) an insurer for any amount sought or claimed for damages or destruction to the property of the claimant or an insured by reason of:

      (1) collision with a motor vehicle or other object, or by upset of the motor vehicle; or

      (2) coverage of the insured that provides indemnification from injury or damages caused by uninsured motorists.

  (3) The amount to be paid out of the Fund may not be sought, wholly or partly, to:

    (i) take the place of making a claim or receiving a payment that is payable under a policy specified in paragraph (2)(i) of this subsection; or

    (ii) reimburse or otherwise indemnify an insurer for an amount paid or payable under a policy specified in paragraph (2)(i) of this subsection.

#### Section 20-602

(a) The maximum amount payable from the Fund, exclusive of interest and costs, for claims filed under this subtitle arising from one accident is:

  (1) $30,000 on account of injury to or death of one individual;

  (2) subject to the limit specified in item (1) of this subsection, $60,000 on account of injury to or death of more than one individual; and

  (3) $15,000 for damages to property.

(b)

  (1) The following deductions shall be made from the smaller of the applicable maximum amount under subsection (a) of this section and the amount of the judgment:

    (i) $250 from a judgment or part of a judgment for damages to property; and

    (ii) the total amount that the claimant has received or is likely to receive:

      (1) from any source toward payment of the settlement or judgment;

      (2) toward payment of a judgment against a person against whom the claimant has a cause of action, arising out of the same accident, for damages for bodily injury or death or damage to property;

      (3) under a policy affording indemnity for damage to or destruction of property of the applicant; and

      (4) by reason of the accident out of which the claim arises under any workers' compensation law.

  (2) For the purposes of this subtitle, medical, hospital, funeral, or other benefits paid or payable for the applicant under the Maryland Workers' Compensation Act shall be considered to be received or receivable by the claimant.

(c) The Fund may recover any amount paid out of the Fund that exceeds the amount authorized under this subtitle by bringing an action against the person that received the excess payment.

(d)

  (1) Notwithstanding any workers' compensation law or similar law to the contrary, whenever the amount of a payment by the Fund has been reduced by the amount of benefits paid or to be paid in accordance with a workers' compensation law or similar law, the employer of an injured person or decedent and the insurer of that employer is not entitled to a lien on payment from the Fund.

  (2) Workers' compensation benefits may not be reduced because of the reduced payment from the Fund.

#### Section 20-603

(a)

  (1) Except as provided in paragraph (2) of this subsection, notice of a claim for damages must be filed with the Fund within 180 days after the accident out of which the cause of action arises before a person may apply or sue for payment from the Fund under this subtitle.

  (2) If notice of a claim is not filed within the time required under paragraph (1) of this subsection, a claim or suit may not be filed or maintained unless the claimant provides proof:

    (i) that the claimant was physically incapable of filing notice within the time required and filed notice within 30 days after becoming physically capable of doing so or, if the claimant did not become capable of filing notice, that a notice was filed for the claimant within a reasonable period;

    (ii) that the claimant filed notice within 30 days after having received notice that an insurer had disclaimed on a policy and thus removed or withdrew liability insurance coverage for the claim against a defendant; or

    (iii) that the claimant gave the notice required under paragraph (1) of this subsection within 30 days after receiving notice that the insurer of the defendant was insolvent if:

      (1) the insurer of the defendant is not authorized to transact insurance business in the State; and

      (2) the claimant is not eligible to make a claim against the Property and Casualty Insurance Guaranty Corporation.

(b) The notice of a claim shall contain:

  (1) evidence that the claimant:

    (i) has fulfilled all requirements to file a claim; and

    (ii) is not eligible for uninsured motorist coverage benefits from a policy issued to the claimant or a family member who resides in the claimant's household;

  (2) certification by the claimant's employer of all lost wages incurred up to the filing of notice of a claim;

  (3) evidence of all medical expenses incurred up to the filing of notice of a claim;

  (4) all reports of medical treatment and consultation for injuries sustained;

  (5) evidence of all other damages claimed up to the filing of the notice of claim;

  (6) all available police or other accident reports; and

  (7) additional information that the Executive Director requires by regulation.

(c) To the extent practicable, information required in notice of a claim shall be submitted in one filing.

#### Section 20-604

(a)

  (1) The Executive Director shall adopt regulations and the Supreme Court of Maryland shall adopt rules that set forth procedural requirements for claims and actions against the Fund filed under this subtitle.

  (2) Before the Fund becomes liable under this subtitle, a claimant must comply with each procedural requirement for claims and actions against the Fund.

  (3) On behalf of the Fund, the Executive Director or designee of the Executive Director may stipulate that the procedural requirements have been met and consent to the claimant bringing an action against the Fund.

  (4) A stipulation or consent does not waive any defense that the Fund may have with respect to the case.

(b)

  (1) At any time and without filing a petition for payment or other court approval, the Fund may settle, compromise, and pay claims and actions brought and judgments obtained under this subtitle.

  (2) The Executive Director shall adopt regulations setting forth the procedure for settlement or payment.

  (3) Interest shall accrue from the date of judgment in accordance with Sec. 11-107 of the Courts Article.

#### Section 20-605

(a)

  (1) After the Fund negotiates with a plaintiff or claimant a settlement offer that the Fund finds reasonable, the Fund shall give notice to the defendant or uninsured party of the offer in accordance with regulations of the Fund.

  (2) If a defendant or uninsured party approves the settlement offer, the plaintiff or claimant shall proceed to settlement in accordance with regulations of the Fund and the Maryland Rules.

(b)

  (1) If a defendant or uninsured party rejects a settlement offer, the Fund shall cause notice to be served on the defendant or uninsured party by any lawful manner, including:

    (i) a sheriff;

    (ii) a private process server; and

    (iii) certified mail bearing a postmark from the United States Postal Service to the last known address of the defendant or uninsured party or the last address on file with the Motor Vehicle Administration of this State or the state where the defendant or uninsured was last known to reside.

  (2) The notice served under this subsection shall state that:

    (i) without further notice, the Fund will withdraw from the claim or action 30 days after the date of the notice;

    (ii) within 30 days after the date of the notice, an appearance may be entered by the defendant or uninsured party or by defense counsel whom the defendant or uninsured party chooses; and

    (iii) if the provisions of item (ii) of this paragraph are not met, at any time after 30 days following the date of the notice and without further notice, suit may be filed or judgment may be entered against the defendant or uninsured party in the amount of the settlement offer.

(c) After the end of the 30-day period following notice served to a defendant or uninsured party under subsection (b) of this section, the Fund may settle the claim, file suit, or request the court to set the action for an expedited hearing.

(d) At a hearing authorized under subsection (c) of this section, the court may proceed in a summary manner and, if satisfied that each applicable provision of this title has been met, enter judgment in favor of the plaintiff or Fund in the amount of the settlement offer.

(e)

  (1) The defendant or uninsured party may file an appeal within 10 days after the date of entry of the judgment.

  (2) Absent proof of fraud, mutual mistake, or obvious irregularity, the judgment is not subject to appeal, amendment, or other action of the court after the period for filing an appeal has expired.

#### Section 20-606

(a) When a claim subject to this subtitle results in a default judgment that is entered for want of a plea by a defendant other than the Fund, or in a judgment that is entered with the consent of the defendant without the knowledge and approval of the Fund, the Fund shall answer or apply for relief against the judgment and for permission to answer and defend the claim within 30 days after receipt of actual notice of the judgment.

(b)

  (1) The Fund may elect to intervene in or defend a claim subject to this subtitle.

  (2) The Fund is entitled to each defense that would have been or is available to the uninsured owner or driver.

(c)

  (1) A defendant shall cooperate with the Fund in defense of a claim in which the Fund has intervened under this subtitle.

  (2) If the defendant fails to cooperate, the Fund may apply to the court for an order that directs cooperation or proceed as provided under this subtitle.

#### Section 20-607

An appeal to the appropriate court may be taken from a final order, decree, or judgment of a court made under this subtitle:

(1) that debars a claimant from further proceeding against the Fund or denies the claim;

(2) that awards the claimant less than that to which the claimant believes the claimant is entitled; or

(3) except as provided in Sec. 20-605 of this subtitle, that causes the defendant, the uninsured party, the Fund, or other party to be aggrieved.

#### Section 20-608

(a) All money paid out by the Fund under this subtitle may be recovered by the Fund from the uninsured party at fault in any manner provided by law, including the Maryland Tax Refund Intercept Program.

(b) A judgment that is assigned to or obtained by the Fund:

  (1) is considered in its entirety as taken for the use of the State; and

  (2) shall be indexed in the appropriate court records in the name of the State of Maryland, Maryland Automobile Insurance Fund.

(c) If the Fund brings suit to enforce a judgment obtained under this subtitle against an uninsured party at fault, the Fund may recover the actual costs of collection, including reasonable attorney's fees.

#### Section 20-609

(a) Whenever the Fund makes payment in an action brought or claim made under this subtitle, the Fund shall be subrogated to the cause of action of the claimant receiving the payment against the driver or owner of the motor vehicle by which the accident was occasioned.

(b) The Fund:

  (1) if the identity and whereabouts are established of the person that is the driver or owner, may bring an action against that person for the amount of damage the claimant sustains; and

  (2) may recover that amount out of any money payable with respect to death or injury under any policy in force when the accident occurred.

(c) If the amount recovered in an action under subsection (b) of this section is greater than the amount paid out of the Fund, the Fund:

  (1) first, shall reimburse itself as provided in Sec. 20-608 of this subtitle; and

  (2) second:

    (i) shall collect and pay the unpaid balance to the claimant; or

    (ii) shall assign and transfer to the claimant any judgment, note, or other right, interest, or cause of action that the Fund has against the uninsured driver or owner.

(d) Notwithstanding any other statute of limitations, the Fund may bring an action against the person that is the driver or owner within 6 months after the identity and whereabouts of that person are established.

#### Section 20-610

The General Assembly finds and declares that: 

(1) there is an unacceptably large number of uninsured motorists in the State;

(2) uninsured motorists cause harm to insured drivers by increasing the cost of automobile insurance for everyone required to purchase uninsured motorist coverage;

(3) uninsured motorists are a financial drain on the State and require substantial funding for the Uninsured Division of the Fund to cover legitimate claims of innocent pedestrians, passengers, and drivers who are injured by uninsured motorists;

(4) to encourage uninsured motorists to become insured, the law for many years has provided financial penalties to be imposed on uninsured motorists and a substantial number of penalties are issued every year;

(5) to further address the rate of uninsured motorists, the General Assembly passed legislation (Chapter 446 of the Acts of 2016) to require the Motor Vehicle Administration to conduct a program that waived substantial portions of delinquent uninsured motorist fines as an incentive for eligible participants to become insured, but less than 4% of eligible uninsured motorists actually entered the program;

(6) the General Assembly also passed legislation (Chapter 401 of the Acts of 2016) to require drivers to carry proof of automobile insurance;

(7) despite these statutory efforts, the rate of uninsured motorists has remained stubbornly high, hovering at about 12% according to the Insurance Research Council;

(8) it is in the best interests of the State to address the rate of uninsured motorists in the State in a comprehensive and coordinated fashion;

(9) the Fund was established in 1973 to provide the financial security required under the Maryland Vehicle Law to individuals who are unable to obtain automobile insurance from private insurers;

(10) in addition to the Fund, motor vehicle liability insurance in the State is provided through a system of private insurers, insurance producers, and independent insurance producers;

(11) the Uninsured Division is uniquely positioned to reduce the rate of uninsured motorists by conducting outreach and incentivizing, educating, and encouraging uninsured motorists to obtain automobile insurance from private insurers or the Fund; and

(12) the effort to reduce the rate of uninsured motorists would be greatly enhanced by making the Uninsured Division the primary State agency with responsibility to conduct outreach and incentivize, educate, and encourage uninsured motorists to become insured.

#### Section 20-611

(a) In this section, "Uninsured Motorist Fund" means the Uninsured Motorist Education and Enforcement Fund.

(b) There is an Uninsured Motorist Education and Enforcement Fund.

(c) The purpose of the Uninsured Motorist Fund is to provide funding for the education of drivers about, and the enforcement of, the security requirements for motor vehicles under the Maryland Vehicle Law.

(d) The Uninsured Division shall administer the Uninsured Motorist Fund.

(e) The Uninsured Motorist Fund is a special, nonlapsing fund that is not subject to Sec. 7-302 of the State Finance and Procurement Article.

(f) The Uninsured Motorist Fund consists of:

  (1) revenues deposited to the Uninsured Motorist Fund under Sec. 17-104.2 of the Transportation Article;

  (2) interest and investment earnings of the Uninsured Motorist Fund; and

  (3) any other money from any other source accepted for the benefit of the Uninsured Motorist Fund.

(g) Money in the Uninsured Motorist Fund shall be used solely for:

  (1) the administration of the Uninsured Motorist Fund; and

  (2) the education of drivers and the public about:

    (i) the security requirements under the Maryland Vehicle Law; and

    (ii) the sources of automobile insurance in the State, including private insurers and the Fund.

#### Section 20-612

(a)

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

  (2) "Central Collection Unit fee" means the fee the Central Collection Unit in the Department of Budget and Management is authorized under Sec. 3-304 of the State Finance and Procurement Article to assess on debts or claims collected.

  (3) "Program" means the Program to Incentivize and Enable Uninsured Vehicle Owners to Be Insured established under subsection (b)(1) of this section.

  (4) "Program period" means the period during which vehicle owners may have a portion of delinquent uninsured vehicle penalties waived under the Program.

  (5) "Uninsured vehicle penalty" means the fine the Motor Vehicle Administration may assess a vehicle owner under Sec. 17-106 of the Transportation Article for a lapse of the required security on a vehicle during a registration year.

(b)

  (1) There is a Program to Incentivize and Enable Uninsured Vehicle Owners to Be Insured in the Uninsured Division.

  (2) The Program is administered by the Uninsured Division.

  (3) The purpose of the Program is to reduce the number of uninsured vehicles in the State by incentivizing and enabling individuals with delinquent uninsured vehicle penalties to become:

    (i) eligible to register a vehicle in the State; and

    (ii) insured after paying a reduced uninsured vehicle penalty.

(c) The Program period:

  (1) may not exceed 180 calendar days; and

  (2) shall begin not earlier than July 1, 2018, and end not later than  December 31, 2019.

(d) An individual is eligible to participate in the Program if the individual:

  (1) is a State resident;

  (2) has delinquent uninsured vehicle penalties that became delinquent on or before December 31, 2016;

  (3) does not have the required insurance on any vehicle owned by the individual; and

  (4) has not been issued a judgment by the Central Collection Unit.

(e)

  (1) The Motor Vehicle Administration and the Central Collection Unit shall provide the Uninsured Division with contact information and the total amount of delinquent uninsured vehicle penalties of each individual who may be eligible to participate in the Program.

  (2) The Uninsured Division shall notify individuals who may be eligible to participate in the Program at the individual's last known address.

  (3) The notification required under paragraph (2) of this subsection shall include:

    (i) the website addresses of the Motor Vehicle Administration, the Fund, and the Administration, where individuals may find contact information for insurers that write motor vehicle liability insurance in the State and other information about motor vehicle insurance; and

    (ii) the total amount of delinquent uninsured vehicle penalties that the individual owes and the amount of the penalties that may be waived under the Program.

(f)

  (1) On notification by the Uninsured Division that an applicant meets the eligibility requirements for the Program, the Motor Vehicle Administration shall waive 80% of an eligible individual's delinquent uninsured vehicle penalties that became delinquent on or before December 31, 2016.

  (2)

    (i) As a condition of receiving a waiver under paragraph (1) of this subsection, the eligible individual shall pay the balance of the delinquent uninsured vehicle penalties owed after subtracting the waived amount under paragraph (1) of this subsection.

    (ii) If a claim against an eligible individual has been sent to the Central Collection Unit, in addition to the balance owed under subparagraph (i) of this paragraph, the eligible individual shall pay a Central Collection Unit fee calculated as a percentage of the amount of the balance owed under subparagraph (i) of this paragraph.

    (iii)

      (1) Except as provided in subsubparagraph 2 of this subparagraph, an eligible individual shall pay the balance owed under subparagraph (i) of this paragraph and any Central Collection Unit fee owed under subparagraph (ii) of this paragraph before the end of the Program period.

      (2) An eligible individual may pay the balance owed under subparagraph (i) of this paragraph and any Central Collection Unit fee owed under subparagraph (ii) of this paragraph using a monthly installment payment plan that extends payments beyond the end of the Program period if the terms of the monthly installment payment plan require:

      (A) the first payment to be due on entry into the Program; and

      (B) the remaining balance owed to be paid within 6 months after entry into the Program.

  (3)

    (i) As a condition of receiving a waiver under paragraph (1) of this subsection, an eligible individual who owns a vehicle at the time of the waiver, or an eligible individual who does not own a vehicle at the time of the waiver but subsequently registers a vehicle, shall purchase and maintain the required security on the vehicle for the period of time specified in subparagraph (ii) of this paragraph.

    (ii) The eligible individual shall maintain the required security on the vehicle for a period of:

      (1) at least 6 months; or

      (2) at least 1 year if the waived amount under paragraph (1) of this subsection exceeds $3,000.

(g)

  (1) On behalf of the State, the Uninsured Division may collect the amount of the delinquent uninsured vehicle penalties due together with any Central Collection Unit fee that is due and transmit the money that is owed to the Motor Vehicle Administration and the Central Collection Unit.

  (2) On notification from the Uninsured Division that the required amount of the uninsured vehicle penalties and Central Collection Unit fees have been received from an eligible individual, the Motor Vehicle Administration and the Central Collection Unit shall take the necessary steps to allow the eligible individual to register a vehicle.

#### Section 20-613

An applicant for a policy from the Fund who is participating in the Program under Sec. 20-612 of this subtitle may:

(1) be considered by the Fund to have met the requirements of Sec. 20-502(a)(3) of this title; and

(2) pay the premium for the policy in installments in accordance with Sec. 20-507(g)(1)(ii)1B of this title, regardless of the amount of the premium.

#### Section 20-614

(a) If the Uninsured Division receives information from the Motor Vehicle Administration as required under Sec. 17-106 of the Transportation Article regarding an owner of a vehicle who has been notified by the Motor Vehicle Administration that the registration of the vehicle has been suspended, the Uninsured Division may not, in any fashion, contact the owner until at least 60 days after the effective date of the final termination or lapse of the required security, as reported to the Motor Vehicle Administration by an insurer.

(b) If the Uninsured Division uses the information received from the Motor Vehicle Administration under Sec. 17-106 of the Transportation Article to contact an owner, the Uninsured Division shall send a notice to the owner that:

  (1) provides the website addresses of the Motor Vehicle Administration, the Fund, and the Administration where the owner may find contact information for insurers that write motor vehicle liability insurance in the State and other information about motor vehicle liability insurance; and

  (2) advises the owner that the owner may contact the owner's insurance producer, if any, or the owner's prior insurer to determine whether motor vehicle liability insurance may be placed for the owner by the insurance producer or the insurer.

### Subtitle 7

#### Section 20-701

(a) A person may not knowingly file with the Fund a notice or document required under this title that is false or that contains a material misstatement of fact.

(b) A person that violates this section is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $500 or imprisonment not exceeding 30 days or both.

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