Title 23. Premium Financing — Subtitle 5. Prohibited Acts; Penalties
Statutes in effect as of October 1, 2026.
Md. Code Ann., Ins. § 23-501 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–501LinkCopy Citation
A premium finance company, or an insurance producer, if applicable, may not require an insured or prospective insured to purchase or finance add-on coverage, as defined in § 20-504 of this article, as a condition of financing the premium for an insurance contract issued by the Maryland Automobile Insurance Fund.
Md. Code Ann., Ins. § 23-501.1 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–501.1LinkCopy Citation
(a)
A premium finance company may not impose any finance charge or other charge on any payment for the purchase price of a motor club service contract.
(b)
A premium finance company may not cancel an insurance contract if any payment under the premium finance agreement:
(1)
is sufficient to pay the installment due under the premium finance agreement that is related to the insurance contract obligation; but
(2)
is not sufficient to cover the amount of the monthly payment for the motor club service contract.
Md. Code Ann., Ins. § 23-502 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–502LinkCopy Citation
(a)
A person may not pay any part of an initial service fee or any other fee or charge to an insurance producer, employee of an insurance producer, or to any other person as an inducement to financing an insurance contract with a premium financing company.
(b)
An insurance producer, employee of an insurance producer, or any other person may not accept, directly or indirectly, any valuable consideration as an inducement to facilitate an agreement to finance an insurance premium that contains an assignment of or is otherwise secured by the unearned premium or refund obtainable from an insurer on cancellation of an insurance contract.
Md. Code Ann., Ins. § 23-503 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–503LinkCopy Citation
A premium finance company may not induce an insured to enter into more than one premium finance agreement in order to obtain more than one initial service fee.
Md. Code Ann., Ins. § 23-504 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–504LinkCopy Citation
Unless otherwise authorized by law, a person may not charge, take, receive from, reserve, or impose on an insured or prospective insured greater charges than those allowed by this title.
Md. Code Ann., Ins. § 23-505 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–505LinkCopy Citation
The holder of a power of attorney may not cancel an insurance contract because a delinquency and collection charge under § 23-306 of this title has not been paid.
Md. Code Ann., Ins. § 23-505.1 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–505.1LinkCopy Citation
An insurer that markets through independent insurance producers as defined in this article may not:
(1)
refuse to issue or deny the issuance of a policy because premiums have been advanced by a registered premium finance company not affiliated with the insurer; or
(2)
require an insured to use a particular premium finance company or other installment plan.
Md. Code Ann., Ins. § 23-505.2 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–505.2LinkCopy Citation
(a)
An insurer that markets through independent insurance producers as defined in this article may not discriminate, intimidate, or retaliate against an insurance producer or insured that uses premium financing by denying the insurance producer or insured the same rights accorded to insurance producers or insureds who pay premiums in a different manner.
(b)
With respect to personal lines automobile insurance, an insurance producer, who directly or indirectly has an ownership interest in a premium finance company, shall provide a disclosure to be signed by the insured comparing the costs and terms of premium financing with the insurer’s alternative payment plan.
(c)
The disclosure required by subsection (b) of this section shall:
(1)
state the total amount to be paid by the insured under the premium finance agreement during the policy term, including premium, any down payment, and all interest, fees, and charges incident to the premium finance agreement and resulting extension of credit; and
(2)
state the total amount to be paid by the insured under the insurer’s alternative payment plan during the policy term, including premium, any down payment, and all fees and charges incident to the alternative payment plan.
(d)
An insurance producer, or an employee or agent of the insurance producer, who directly or indirectly has an ownership interest in a motor club shall provide a disclosure to be signed by the insured informing the insured of the insurance producer’s or the insurance producer’s employee’s or agent’s interest in the motor club.
Md. Code Ann., Ins. § 23-506 (2026)
Title 23. Premium Financing
Subtitle 5. Prohibited Acts; Penalties
§ 23–506LinkCopy Citation
In addition to any other applicable administrative or civil penalty, a premium finance company, insurer, or insurance producer that willfully and knowingly violates any provision of this title is guilty of a misdemeanor and on conviction is subject to a fine not exceeding $1,000 or imprisonment not exceeding 1 year or both.