# Insurance (GIN)

## Title 25. Alternative Market Mechanisms

### Subtitle 4. Maryland Property Insurance Availability Act

#### Section 25-401

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

(b) "Association" means the Joint Insurance Association.

(c) "Association member" means an insurer that is licensed to write in the State, on a direct basis, essential property insurance or a component of essential property insurance in multi-peril policies.

(d)

  (1) "Essential property insurance" means insurance against direct loss to property from the perils of fire, lightning, removal, explosion, windstorm, hail, smoke, aircraft, vehicles, riot, civil commotion, or vandalism as defined and limited in property insurance forms that the Association files with the Commissioner.

  (2) "Essential property insurance" does not include:

    (i) motor vehicle insurance;

    (ii) inland marine insurance; or

    (iii) insurance on property that:

      (1) is used for fabrication, processing, or assembly of products or components of products;

      (2) has an insurable value in excess of $250,000; and

      (3) is used in a business that employs at least 25 individuals.

(e) "Homeowner's insurance" means insurance for residential property that provides a combination of coverages including:

  (1) fire;

  (2) extended coverage;

  (3) vandalism and malicious mischief;

  (4) burglary;

  (5) theft; and

  (6) personal liability.

(f)

  (1) "Premiums written" means, as computed by the Association, gross direct premiums charged during the second preceding calendar year with respect to property in the State on all policies of essential property insurance and the essential property insurance components of multi-peril policies, less return premiums, dividends paid or credited to policyholders, or the unused or unabsorbed parts of premium deposits.

  (2) "Premiums written" does not include premiums or parts of premiums relating to risks ceded to the Association.

#### Section 25-402

The purposes of this subtitle are:

(1) to authorize and establish:

  (i) the Joint Insurance Association;

  (ii) a program to make essential property insurance available from the Association to qualified applicants with the least possible administrative detail and expense; and

  (iii) a program to make the homeowner's insurance that is provided by the Association available to qualified applicants with the least possible administrative detail and expense;

(2) to encourage the improvement of the condition of properties located in the State;

(3) to further orderly community development in general;

(4) to publicize the purposes and procedures of this subtitle so that no one fails to seek assistance from the Association because of ignorance;

(5) to utilize fully the voluntary insurance market as a source of essential property insurance and homeowner's insurance; and

(6) to encourage the delivery of essential property insurance, and the homeowner's insurance that is provided by the Association, at the most reasonable cost possible, provided that insurance pricing by the Association:

  (i) is actuarially self-supporting; and

  (ii) does not actively compete with insurance pricing in the voluntary insurance market.

#### Section 25-403

(a)

  (1) There is a Joint Insurance Association.

  (2) The Association is an unincorporated association.

(b)

  (1) The Association consists of all insurers that are licensed to write in the State, on a direct basis, essential property insurance or a component of essential property insurance in multi-peril policies.

  (2) As a condition of its authority to transact essential property insurance business in the State, an insurer must be and remain an Association member.

(c) The Association may:

  (1) establish a program of operation, subject to the approval of the Commissioner; and

  (2) cause policies to be issued and assume and cede reinsurance on risks written in conformity with the program of operation.

(d) Each Association member shall participate in the Association's expenses, profits, and losses in the proportion that the Association member's premiums written bear to the aggregate premiums written by all Association members.

(e)

  (1) A Governing Committee shall administer the Association.

  (2) The Governing Committee consists of nine Association members.

  (3) All Association members annually shall elect the members of the Governing Committee.

  (4) Votes shall be weighted in accordance with the premiums written by each Association member.

(f)

  (1) An Association member, the Association or its agents or employees, the Board of Directors, and the Commissioner or the Commissioner's representatives shall have the immunity from liability described in Sec. 5-411(a) of the Courts Article.

  (2) An Association member, the Association, the Governing Committee, their agents or employees, the Commissioner, and the Commissioner's authorized representatives shall have the immunity from liability described in Sec. 5-411(b) of the Courts Article.

#### Section 25-404

(a)

  (1) The Association is not and may not be deemed a department, unit, agency, or instrumentality of the State.

  (2) All debts, claims, obligations, and liabilities incurred by the Association shall be the debts, claims, obligations, and liabilities of the Association only and not of the State or the State's agencies, instrumentalities, officers, or employees.

(b)

  (1) The money of the Association is not part of the General Fund of the State.

  (2) The State may not budget for or provide General Fund appropriations to the Association.

  (3) The debts, claims, obligations, and liabilities of the Association are not debts of the State or pledges of the credit of the State.

(c) The records, reports, and communications of the Association, the Governing Committee, the committees of the Association, and their representatives, agents, and employees are not public documents.

#### Section 25-405

(a) The Governing Committee shall adopt a program of operation in accordance with this subtitle.

(b) The program of operation shall provide for economical, fair, and nondiscriminatory administration and for the prompt and efficient delivery of essential property insurance and homeowner's insurance to promote orderly community development.

(c)

  (1) With the approval of the Commissioner, the Association may amend the program of operation.

  (2) Association members shall vote on proposed amendments to the program of operation.

  (3) Votes shall be cast and counted on a weighted basis in accordance with the premiums written by each Association member.

  (4) An amendment to the program of operation is not effective until approved by a majority of the votes cast by Association members.

(d) The program of operation shall provide for:

  (1) establishment of adequate service facilities and other necessary facilities;

  (2) management of the Association;

  (3) assessment of Association members to defray losses and expenses;

  (4) commission arrangements;

  (5) reasonable and objective underwriting standards;

  (6) acceptance and cession of reinsurance;

  (7) procedures to determine amounts of insurance to be provided;

  (8) immediate binding of eligible risks;

  (9) a premium installment plan; and

  (10) notwithstanding Title 27, Subtitle 6 of this article, underwriting guidelines and procedures that allow the Association to shorten the cancellation period for policies of essential property insurance and homeowner's insurance for certain conditions that are determined to exist.

(e) The program of operation shall provide that the Association may not appoint insurance producers to act on its behalf and shall do business directly with applicants or with licensed insurance producers that represent applicants.

(f) The program of operation shall establish:

  (1) a maximum limit of liability of $1,500,000 on real or personal property composed of or contained in a single building; and

  (2) appropriate sublimits of liability based on construction, protection, and class of occupancy.

(g)

  (1) The program of operation shall implement procedures to make homeowner's insurance coverage available through the Association.

  (2) The homeowner's insurance policies that the Association issues may be limited to basic market value, repair cost, or actual cash value contracts for owner-occupants of one- to four-family dwellings, as approved by the Commissioner.

  (3) The homeowner's insurance shall be implemented through a program that entitles eligible applicants to immediate binding of coverage through the Association for a reasonable period of time pending underwriting and inspection of the premises to determine whether the premises meet the eligibility standards of the program.

(h)

  (1) The program of operation shall provide a method of recoupment by which Association members may recover losses and expenses that have been incurred by the Association and assessed to Association members.

  (2) To recoup loss and expense assessments, the program of operation shall provide for:

    (i) the calculation of the surcharge or rating factors to be added to direct premiums written for essential property insurance and homeowner's insurance covering property located in the State; and

    (ii) an adjustment each year for over or under recoupment of assessment.

(i)

  (1) The program of operation shall develop a participation credit for dwellings as an offset to Association member assessment for voluntary writings in those areas of the State with a significant proportion of essential property insurance policies or homeowner's insurance policies issued by or for the Association.

  (2) After consultation with the Governing Committee, the Commissioner shall determine whether an area has a significant proportion of Association policies.

#### Section 25-406

A person with an insurable interest in real or tangible personal property at a fixed location may apply to the Association for essential property insurance or homeowner's insurance if the person has been:

(1) unable to obtain essential property insurance or homeowner's insurance;

(2) able to obtain essential property insurance or homeowner's insurance only after application under Sec. 11-210 or Sec. 11-311 of this article; or

(3) able to obtain only partial coverage for the value of the property.

#### Section 25-407

(a) The Association may inspect the property of an applicant for essential property insurance or homeowner's insurance coverage.

(b)

  (1) Except as provided in paragraph (2) of this subsection, the Association shall inspect the property without cost to the owner.

  (2) If the Association is unable to complete an inspection of the property due to the fault of the owner or applicant, the Association may require the applicant to pay in advance the reasonable cost of subsequent efforts to inspect the property.

(c)

  (1) The applicant or representative of the applicant shall be afforded the opportunity to be present during the inspection.

  (2) The inspector does not have authority to advise whether the Association will provide coverage to the property being inspected.

  (3) The inspector may take photographs of the property during the inspection.

(d) The inspection report shall:

  (1) cover pertinent structural and occupancy features and the general condition of the building and surrounding structures;

  (2) indicate the pertinent features of building, construction, maintenance, occupancy, and surrounding property; and

  (3) include a rate makeup statement that covers any condition charges or surcharges imposed:

    (i) as a result of the inspection;

    (ii) under the program of operation; or

    (iii) under a substandard rating plan approved by the Commissioner.

(e) On request, the Association shall make available a copy of the inspection report to the applicant or the applicant's licensed insurance producer.

#### Section 25-408

(a) The Commissioner shall have the same powers over the Association as are granted under this article with respect to domestic insurers that are authorized insurers.

(b) If the Commissioner determines that the rate structure for policies of essential property insurance and homeowner's insurance offered by or through the Association does not compete with the rate structure of the voluntary insurance market in the State, the Commissioner shall approve the rate structure.

(c)

  (1) The Commissioner shall monitor and review the financial condition of Association members to ensure that the Association members are able to pay assessments that the Association may levy on them.

  (2) The Commissioner may use the annual statements of Association members and other available data to monitor and review their financial condition.

#### Section 25-409

(a)

  (1) An applicant for essential property insurance or homeowner's insurance or an affected insurer may appeal to the Governing Committee.

  (2) A decision of the Governing Committee may be appealed to the Commissioner within 30 days after the decision.

(b) An order or decision of the Commissioner made under this subtitle is subject to judicial review.

#### Section 25-410

This subtitle is the Maryland Property Insurance Availability Act.

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