Maryland Adopts Some, Not All, Ideas to Aid Urban Auto Insureds
Maryland is moving to address the higher costs of insurance for urban drivers, with passage of recent legislation requiring insurers to regularly review their rating territories and streamlining the process for protesting rates.
But some other recommendations of a recent urban insurance report have yet to be adopted.
Maryland Insurance Commissioner R. Steven Orr recently issued the final report of the Automobile Insurance Task Force to Study Rates in Urban Areas. This task force was formed in 2005 to study the factors that result in high auto insurance rates for consumers in urban areas, such as Baltimore City and Prince George’s County, and to make recommendations for legislative changes.
The task force held five public meetings during 2005.
“I believe the task force members learned a great deal through this process and a number of ideas or ways to help contain costs for consumers have emerged. I appreciate the time and interest that Senator Lisa Gladden as co-chair and other Task Force members devoted to this issue, ” said Orr. “The next step will be to continue our work with the General Assembly on making legislative changes that can positively impact Maryland drivers.”
Certain recommendations of the task force will be implemented as a result of legislation passed during the 2006 session. Specifically:
• Insurance companies will be required to affirmatively state in each rate filing made with the Maryland Insurance Administration that the company has reviewed their rating territories and that the territories being used and the rates for each territory are actuarially justified. (HB1600 and SB965)
• The MIA will continue to aggressively fight automobile insurance theft and fraud through efforts of the Insurance Fraud Division. (HB1600 and SB965)
• The requirements under § 27-605 of the Insurance Article for protests of rate increases will be clarified and streamlined. (HB760 and SB 948)
The task force also offered other recommendations that were not addressed by legislation during the 2006 Session, although some of the ideas were introduced. These include:
• To allow the Maryland Automobile Insurance Fund (MAIF) to accept installment payments from its insureds (was proposed in SB703).
• To allow insurance companies to create and introduce pilot programs that provide innovative ways to rate and price automobile insurance policies (was proposed during the 2005 legislative session as SB938).
• To eliminate multiple recoveries for the same injury by making Personal Injury Protection payments secondary to health insurance or other sources of recovery; reducing uninsured motorist benefits by the amount of compensation paid or payable from collateral sources; and reducing recoveries from third party liability insurers on third party liability claims or judgments by the amount of compensation paid or payable from collateral sources.
• To educate consumers regarding automobile insurance so they understand both required and optional coverages, and the factors that affect their premiums.
• To develop a state-wide public safety initiative to reduce accidents, which will result in a decrease in claims and, ultimately, premiums.
• To encourage the Motor Vehicle Administration to utilize electronic databases to cross check registration and insurance information on a real time basis so as to enforce the insurance requirements of the state.
• To provide financial incentives for people to drive with insurance.
The task force was originally formed in February 2005 by former Insurance Commissioner Alfred W. Redmer, Jr. Along with Co-Chairs Commissioner Redmer and Senator Lisa Gladden (41st), Baltimore City legislators on the task force include Senator Joan Carter Conway (43rd) and Delegates Peter Hammen (46th), Carolyn Krysiak (46th) and Marshall T. Goodwin (50th). Prince George’s County legislators who are serving include Senator Ulysses Currie (25th), Senator Gloria Lawlah (26th), and Delegates Dereck Davis (25th) and Obie Patterson (26th).
A copy of the full report can be accessed on the MIA’s web site, www.mdinsurance.state.md.us.
Source: Maryland Insurance Adminstration