New insurance-related regulations signed into law this spring by Gov. Larry Hogan went into effect this month in Maryland, including legislation that now permits insurance producers to charge credit card fees to clients on agency-billed business, and reducing the number of days before re-taking a failed license test.
Other new insurance laws include:
Private Passenger Motor Vehicle Liability Insurance – Enhanced Underinsured Motorist Coverage – House Bill 5 (Chapter 20)
Establishes a new optional coverage entitled enhanced underinsured motorist coverage (“EUIM”) to be offered by authorized motor vehicle liability insurers at the time of application as an alternative to existing uninsured and underinsured motorist (“UM”) coverage.
Provides that the amount of EUIM coverage must equal the amount of liability coverage provided under the policy.
Requires the Insurance Commissioner to develop the form for the offering of EUIM.
Applies to each policy of private passenger motor vehicle insurance issued, sold or delivered in the State on or after July 1, 2018.
Homeowner’s Insurance – Notices – House Bill 291/Senate Bill 297 (Chapter 123/Chapter 124)
Authorizes a homeowner’s insurer to send certain offers, renewal notices, and statements to an insured or applicant for a policy using electronic means if the notices sent in this manner meet existing requirements for notices sent using electronic means.
Requires the Insurance Commissioner to adopt by regulation a notice containing information about homeowner’s insurance policies such as flood, coverage from loss from water that backs up through sewers and drains, deductibles, storm loss protective device discounts, claims history and increased hazard.
Permits a homeowner’s insurer to fulfill certain notice requirements at renewal by using the Commissioner’s notice instead of having to send individual notices.
Motor Vehicle Insurance – Discrimination in Underwriting and Rating – Prohibitions – House Bill 916/Senate Bill 534 (Chapter 639/Chapter 640)
Prohibits the insurer of a private passenger motor vehicle insurance policy from increasing the premium for an insured who becomes a surviving spouse based solely on the insured’s change in marital status.
Motor Vehicle Liability Insurance Policies – Placement and Reinstatement – Senate Bill 290 (Chapter 725)
Authorizes a motor vehicle insurer, including MAIF, to reinstate a private passenger motor vehicle liability insurance policy that was canceled for nonpayment of a premium, without a lapse in coverage, if the policyholder certifies that there have not been any losses during the lapsed period and pays the premiums owed to the insurer and any reasonable reinstatement fee approved by the Insurance Commissioner.
Requires the Commissioner to review the administrative expenses of an insurer that are associated with reinstatements and may approve a fee that does not exceed: (1) $10 if charged by an insurer; and (2) $15 if charged by an insurance producer.
Increases the amount a MAIF producer may charge an applicant for automobile insurance with MAIF to $25 plus $1 more than the actual charge by the Motor Vehicle Administration (MVA) for a driving record.
Insurance – Producer Licensing Examinations – House Bill 1277 (Chapter 505)
Decreases the number of days, from 14 days to 4 days that an individual must wait before he or she can retake a failed insurance producer license examination.
HOW TO COLLECT CREDIT CARD FEES
Insurance producers can now charge credit card fees to clients on agency-billed business. The Maryland Insurance Administration (MIA) provided guidance on the change via Bulletin 17-10.
Senate Bill 94/House Bill 800, passed by the Maryland General Assembly earlier this year, specifies that Maryland insurance law does not prohibit an insurance producer from charging and collecting expenses incurred when an insured makes a premium payment using a credit card, subject to certain stipulations. The law takes effect on Sunday, Oct. 1.
The MIA’s latest guidance outlines the rules for the acceptance of credit cards as payment for insurance premiums, as well as the rules for the charging of fees for the use of credit cards. The bulletin states, in part, that:
- A licensed insurance producer may accept credit cards as payment of insurance premiums and collect from the insured actual expenses incurred by the insurance producer for payment of the premium for a policy by use of a credit card if the producer makes certain disclosures to the insured, including:
a. Disclosing all available payment methods accepted by the insurer or insurance producer; and
b. Disclosing any charge for actual expenses incurred by the insurance producer for payment of a premium by use of a credit card.
The bulletin also clarifies that an insurer may not impose a separate fee or service charge on an insured solely because the insured elects to use a credit card for the payment of premiums.
