Chapter 11. Motor Vehicle Rental Companies—Limited Lines License
Regulation .01 Scope.LinkCopy Citation
This chapter applies to motor vehicle rental companies that sell or offer any insurance coverage in this State to a motor vehicle renter in connection with, and incidental to, a motor vehicle rental agreement.
Regulation .02 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Franchisee” means a person to whom a franchise has been granted by a motor vehicle rental company under Business Regulation Article, Title 14, Subtitle 2, Annotated Code of Maryland.
(2)
“Limited lines license” means a limited lines license to sell insurance in connection with, and incidental to, the rental of a vehicle.
(3)
Motor Vehicle Rental Company.
(a)
“Motor vehicle rental company” means a person that is in the business of providing motor vehicles to the public under a rental agreement for a period of 180 days or less.
(b)
“Motor vehicle rental company” includes a franchisee or subsidiary that is in the business of providing motor vehicles to the public under a rental agreement for a period of 180 days or less.
(4)
“Rental agreement” means a written agreement containing the terms and conditions that govern the use of a vehicle provided by a motor vehicle rental company under the provisions of Transportation Article, Title 18, Annotated Code of Maryland.
(5)
“Renter” means a person obtaining the use of a vehicle from a motor vehicle rental company under the terms of a rental agreement.
(6)
“Subsidiary” means a business entity that is directly or indirectly controlled by a motor vehicle rental company.
(7)
“Vehicle” means a motor vehicle of the:
(a)
Private passenger type, including passenger vans, minivans, and sport utility vehicles; or
(b)
Cargo type, including cargo vans, pickup trucks, and trucks that do not require the operator to possess a commercial driver's license.
Regulation .03 Limited Lines License and Appointment Required.LinkCopy Citation
Before a motor vehicle rental company or an employee of a motor vehicle rental company sells or offers any policies of insurance in this State to a renter in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall:
A.
Hold a limited lines license issued by the Commissioner; and
B.
Have on file with the Commissioner an appointment from each authorized insurer that the motor vehicle rental company intends to represent.
Regulation .04 Application for Limited Lines License.LinkCopy Citation
An applicant for a limited lines license shall:
A.
Submit an application to the Commissioner on the form approved by the Commissioner;
B.
Pay to the Commissioner the applicable fee required under Insurance Article, §2-212, Annotated Code of Maryland, for an insurance producer license;
C.
Submit with the application a disclosure as set out in Regulation .06 of this chapter, including any brochures or other written material;
D.
Submit with the application the filing required by Regulation .07C of this chapter that describes the training program that a motor vehicle rental company must have approved by the Commissioner;
E.
If applicable, submit a written agreement signed by an officer of each insurer represented by the motor vehicle rental company that the premiums collected from a renter for the insurance do not need to be segregated from other funds collected by the motor vehicle rental company in connection with the vehicle rental; and
F.
Submit any other information or documentation that the Commissioner requires, including any information or documentation to determine the professional competence, good character, and trustworthiness of the motor vehicle rental company.
Regulation .05 Issuance, Term, and Renewal of Limited Lines License.LinkCopy Citation
A.
Issuance. The Commissioner shall issue a limited lines license to each applicant who meets the requirements of Regulation .04 of this chapter and Insurance Article, §§10-603 and 10-604, Annotated Code of Maryland.
B.
Term and Renewal. A limited lines license expires every other year on the anniversary date of the issuance of the license unless renewed as provided in Insurance Article, §10-115, Annotated Code of Maryland.
Regulation .06 Disclosures.LinkCopy Citation
A.
In General. Before the completion of a rental transaction, a motor vehicle rental company shall provide to a prospective renter who purchases any of the insurance coverages a disclosure that meets the requirements of this regulation.
B.
Sale or Offer of Insurance on Business Premises. If a motor vehicle rental company sells or offers to sell insurance on any business premises of the motor vehicle rental company in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall prominently display on the premises and make readily available to prospective renters a disclosure that meets the requirements of §F of this regulation.
C.
Sale or Offer of Insurance Over Telephone. If a motor vehicle rental company sells or offers to sell insurance over the telephone in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall, if the prospective renter requests insurance coverage or information on insurance coverage or otherwise indicates an interest in insurance coverage, advise the prospective renter that the State of Maryland has a consumer disclosure relating to insurance coverage for rental vehicles and offer to read the prospective renter a disclosure that meets the requirements of §F of this regulation.
D.
Sale or Offer of Insurance Through a Web Site. If a motor vehicle rental company sells or offers to sell insurance through a web site in connection with, and incidental to, a rental agreement, the motor vehicle rental company shall include on the web site an electronic disclosure that meets the requirements of §F of this regulation:
(1)
As part of any description of the insurance coverage that is included on the web site; and
(2)
On the same screen in close proximity to any click-through process or other electronic process that allows a prospective renter to indicate that the prospective renter would like to purchase insurance.
E.
Completion of Transaction.
(1)
When a renter goes to the business premises of a motor vehicle rental company to take possession of a vehicle pursuant to a rental agreement, the renter may reject or select any insurance coverage offered in connection with, and incidental to, the rental agreement regardless of any previous decision that the renter made by telephone or over the internet regarding insurance coverage.
(2)
An insurer, or a motor vehicle rental car company on behalf of an insurer, may not charge a renter a premium for any insurance coverage that the renter rejects when the renter takes possession of a vehicle regardless of any previous decision that the renter made by telephone or over the internet regarding insurance coverage.
F.
Form and Content of Disclosure. The disclosures required by §§A—D of this regulation shall include the following:
(1)
A summary that clearly and correctly describes the material terms of coverage offered to the renter, including any limitations or exclusions pertaining to that coverage;
(2)
The name of the authorized insurer;
(3)
A statement that the coverage offered by the motor vehicle rental company may provide duplication of coverage already provided by the renter's personal automobile insurance policy, homeowner's insurance policy, personal liability policy, or other source of coverage;
(4)
A statement, if in writing in at least 10-point type, that:
(5)
A description of the process through which the renter can file a claim, including the insurer's address, and where the claim should be filed.
G.
Filing and Approval of Disclosure.
(1)
Before providing the written disclosure required by §B of this regulation to a prospective renter, a motor vehicle rental company shall file with the Commissioner a copy of all written materials containing the disclosure.
(2)
Before providing the oral disclosure required by §C of this regulation to a prospective renter over the telephone, a motor vehicle rental company shall file the text of the oral disclosure with the Commissioner.
(3)
Before providing the electronic disclosure required by §D of this regulation to a prospective renter through a web site, a motor vehicle rental company shall:
(a)
Provide the Commissioner with access to an electronic prototype of the web site; or
(b)
File with the Commissioner a printout of each screen that contains the disclosure.
(4)
The Commissioner may disapprove a written, oral, or electronic disclosure at any time if the Commissioner determines that the disclosure does not comply with Insurance Article, §10-604, Annotated Code of Maryland.
(5)
If the Commissioner does not disapprove a written or oral disclosure, the disclosure is deemed to be approved 60 days after filing.
(6)
If the Commissioner does not disapprove an electronic disclosure through a web site, the disclosure is deemed to be approved 60 days after:
(a)
The Commissioner is provided with access to an electronic prototype of the web site; or
(b)
A printout of each screen that contains the disclosure is filed with the Commissioner.
(7)
The Commissioner may extend the time for review of a disclosure under §G(5) or (6) of this regulation for not more than 30 days.
Regulation .07 Training Program.LinkCopy Citation
A.
In General.
(1)
Each motor vehicle rental company shall have a training program for its employees who sell, solicit, or negotiate insurance coverage under this chapter.
(2)
Employees shall take the course, in person, before selling, soliciting, or negotiating insurance coverage.
B.
The training program shall include instruction:
(1)
About the kinds of insurance that motor vehicle rental companies may sell or offer under this chapter;
(2)
That the trainee shall inform a renter that purchasing any insurance from the motor vehicle rental company is not required in order to rent a vehicle;
(3)
That the trainee shall inform a renter that the purchase of insurance may be a duplication of coverage already provided by the renter's personal automobile insurance policy, homeowner's insurance policy, liability policy, or other source of coverage; and
(4)
About all the other requirements of Insurance Article, §§10-605 and 10-606, Annotated Code of Maryland.
C.
Approval of Training Program.
(1)
The training program shall be approved by the Commissioner before it is implemented.
(2)
A motor vehicle rental company that proposes to conduct a training program shall file with the Commissioner:
(a)
A description or outline of the course or video tapes of the course;
(b)
Copies of all written materials to be used in the course or with the video tapes; and
(c)
A list of instructors and their qualifications.
Chapter annotations
Authority: Insurance Article, §2-109, and Title 10, Subtitle 6; Annotated Code of Maryland
History: Effective date: September 1, 2002 (29:11 Md. R. 890)