Title 20. Maryland Automobile Insurance Fund — Subtitle 4. Industry Automobile Insurance Association

The Board of Directors consists of nine members elected by Association members.

Of the nine members of the Board of Directors:

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

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.

the statutory operating loss for the immediately preceding calendar year;

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

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.

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

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

assessment money received for a prior year; or

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

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

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

the commercial auto assessment or private passenger auto assessment; and

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

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.

The funds withdrawn:

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:

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

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

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

The Association:

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

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

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.

Subject to § 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.

The assessment surcharge may not be:

In conformity with §§ 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.

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

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

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

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

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

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.

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, $_____”.

No other statement may accompany the premium billing.

report quarterly to the Association; and

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.

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.

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

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.

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

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.

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 §§ 5–601 through 5–609 of this article.

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.

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.