Chapter 14. Notice of Payment Options When Premium Financing is Offered
Regulation .01 Purpose.LinkCopy Citation
A.
The purpose of this chapter is to assure fair disclosure of availability of alternative payment plans and financing options when consumers purchase property and casualty insurance.
B.
This chapter is also designed to aid consumers by creating an industry standard with regard to required disclosure of insurers' alternative payment plans and premium financing agreements.
Regulation .02 Scope.LinkCopy Citation
This chapter does not apply to life insurance, health insurance, or annuities.
Regulation .03 Definitions.LinkCopy Citation
A.
In this chapter, the following terms have the meanings indicated.
B.
Terms Defined.
(1)
“Casualty insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.
(2)
“Insurance producer” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.
(3)
“Policy” means an individual or group policy, contract, or certificate issued by an insurer.
(4)
“Premium finance agreement” has the meaning stated in Insurance Article, §23-101, Annotated Code of Maryland.
(5)
“Premium finance company” has the meaning stated in Insurance Article, §23-101, Annotated Code of Maryland.
(6)
“Property insurance” has the meaning stated in Insurance Article, §1-101, Annotated Code of Maryland.
Regulation .04 Notice of Payment Options.LinkCopy Citation
A.
With respect to property and casualty insurance policies, an insurance producer may not finance an insurance premium unless the insurance producer first makes a disclosure to the applicant or insured that:
(1)
Provides the applicant or insured with a comparison of the costs and terms of the premium finance agreement with the insurer's alternative payment plan or plans, if the insurer offers an alternative; and
(2)
Is signed by the applicant or insured.
B.
The disclosure required by §A of this regulation shall:
(1)
State the total amount to be paid by the applicant or 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 applicant or insured under the insurer's alternative payment plan or plans during the policy term, including premium, any down payment, and all fees and charges incident to the alternative payment plan or plans.
Regulation .05 Retention of Signed Disclosure Forms.LinkCopy Citation
A.
An insurance producer that has provided an insured or applicant for property and casualty insurance with the various payment options available shall maintain the signed disclosure form required under Regulation .04 of this chapter, for a period of at least 5 years after the date the disclosure form is signed.
B.
If an insurance producer maintains the signed disclosure form required to be maintained under §A of this regulation electronically, the insurance producer shall maintain the signed disclosure form in a manner that allows the form to be retrieved within 10 working days after a request from the Insurance Commissioner.
Chapter annotations
Authority: Insurance Article, §§2-109(a)(1), 10-104(c), and 10-126(a)(5) and (6), Annotated Code of Maryland
History: Effective date: July 16, 2009 (36:14 Md. R. 985)