Brett S. Lininger, Esq., Principal at Semmes, Bowen, Semmes presented - “Property & Casualty Legislative Up-Date” at the October 2013 67th Annual F. Addison Fowler Seminar held by The Insurance Roundtable of Baltimore in Hunt Valley, MD
1. Insurance Roundtable of Baltimore
67th Annual F. Addison Fowler Seminar
PROPERTY AND CASUALTY
LEGISLATIVE/REGULATORY UPDATE
Brett S. Lininger, Principal
Semmes, Bowen & Semmes
October 11, 2013
3. PROPERTY and CASUALTY
LEGISLATIVE ACTIVITY
HB 342 (Chapter 270)/SB 446 (Chapter 269)
Homeowner's or Renter's Insurance and Private Passenger
Motor Vehicle Insurance - Bundling Requirement – Prohibited
• Prohibits an insurer from denying, refusing to renew, or
cancelling coverage because individual fails to carry another
line with insurer or another insurer in the same insurance
holding company system
4. PROPERTY and CASUALTY
HB 392 (Chapter 111)
Motor Vehicle Liability Insurance - Personal Injury Protection
Coverage - Prohibition on Premium Increase
• Prohibits an insurer that issues a policy with PIP from
increasing the premium on the policy due to a PIP claim or
payment
5. PROPERTY and CASUALTY
HB 537 (Chapter 377)
Insurance Producers - Continuing Education - Online Courses
• Prohibits Insurance Commissioner from disapproving CE
course solely on the basis of methodology or technology
used to deliver instruction to individuals taking course
• Allows producer to obtain all or part of required CE credit
hours from correspondence or online courses
6. PROPERTY and CASUALTY
HB 585 (Chapter 505)
Procurement - Subcontractor Equal Access to Bonding Act of
2013
• Prohibits prime contractor from requiring sub-contractor to
provide a bid, performance, or payment bond on
procurement contract for services, supplies, or constructionrelated services with State, more stringent than current law
• Requires prime to accept bond by sub if it would be
accepted by State and provided by surety company
authorized to do business in State or Maryland Small
Business Development Financing Authority
7. PROPERTY and CASUALTY
HB 695 (Chapter 383)
Homeowner's Insurance - Anti-Concurrent Causation Clause Notice and Study
• Notification requirements
• Study of how anti-concurrent clauses have been applied in
other states and to determine with whom insureds
communicate for an explanation of a clause
8. PROPERTY and CASUALTY
Bulletin 13-18
Homeowners Insurance Anti-Concurrent Causation Clause –
Notice & Study
• Clarifies the applicability of the notice required by HB 695 is
to insurers offering homeowner’s insurance which includes
coverage for fire, extended coverage, vandalism and
malicious mischief, burglary, theft, or personal liability
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Does not include an umbrella policy
Committees conducting study
9. PROPERTY and CASUALTY
HB 1089/SB 919
Motor Vehicle Laws - Rental Vehicles - Required Security
• Would have allowed coverage for owners of rental vehicles
to be secondary behind the renter's primary coverage
• Stems from Virginia holding that self-insured car rental
company was permitted to seek reimbursement from
renter's personal automobile insurer after company satisfied
damages caused by renter of vehicle
• Referred to interim study by Committees of jurisdiction
10. PROPERTY and CASUALTY
HB 1132 (Chapter 74) SB 749 (Chapter 73)
Maryland Automobile Insurance Fund - Operational Changes
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Restructures MAIF Board
Removes the AG's office as legal counsel
Removes MAIF employees from State Personnel System
State auditors no longer responsible for auditing MAIF
Exempts MAIF from procurement laws relating to real estate
11. PROPERTY and CASUALTY
SB 930 (Chapter 334)
MAIF – Acceptance of Premium Payments on Installment
Basis and Premium Finance Agreements
• Authorizes MAIF to accept premiums on installment basis
• Requirements of MAIF installment plan
• For 12 month policy w/ less than $3k annual premium,
initial payment at least 25% of annual premium and offer
no more than 6 installment payments
• If more than $3k, initial payment at least 20% of annual
premium and no more than 8 installment payments
12. PROPERTY and CASUALTY
HB 1203 (Chapter 406)
Homeowner's or Renter's Insurance - Policy Exclusions for
Specific Breeds or Mixed Breeds of Dogs – Notices
• Requires insurers to disclose when policy excludes
coverage for certain breeds of dogs and which breeds or
mixes
13. PROPERTY and CASUALTY
SB 736 (Chapter 311)
Insurance - Fraudulent Insurance Acts - Compensation for
Deductible
• Prohibits contractors from directly or indirectly compensating
(or offering or promising to do so) an insured, with intent to
defraud an insurer, for any part of an insurance deductible
under insured's property or casualty insurance policy if
payment for services will be made from proceeds of policy
• Violation is fraudulent insurance act, subject to criminal
penalties
14. PROPERTY and CASUALTY
HB 1205 (Chapter 407)
Study of Captive Insurers
• Requires MIA to study methods to establish and properly
regulate captive in Maryland
15. PROPERTY and CASUALTY
REGULATORY ACTIVITY
Bulletin 13-25
Rate Filings – Content of Filings and Right of Public
Inspection
• Reminder that all P&C rate filings and any supporting
information filed is open to public inspection
• “any supporting information” includes underwriting
standards except when confidentiality is requested & they
serve to determine eligibility with no impact on premium
16. PROPERTY and CASUALTY
Bulletin 13-09
Underwriting Period – Discovery of a Material Risk Factor
• SB 531 (Chapter 253)
•
Allowed insurer to recalculate premium during underwriting
period based on finding material risk w/o cancelling
• Draft Regulations called for insurer to identify the newly
discovered material risk(s) and specify how each risk
impacted premium
• Industry would prefer to disclose material risk(s) but show
before and after comparison
17. PROPERTY and CASUALTY
Percentage Deductible
MIA Regulations held up by AELR Committee
• MIA held meeting with industry to address applicability
concerns
• No substantive changes made to regulations
18. PROPERTY and CASUALTY
MAIF Regulations
Binding Rules
• An attempt to address how to handle a producer’s loss of
license
• Sought to make MAIF policies the sole and exclusive
property of MAIF
• Would have allowed MAIF to terminate producer’s right to
service MAIF if producer’s right to bind coverage was
terminated
• Regulations pulled due to agent community response and
willingness to discuss alternative solutions
19. WORKERS’ COMPENSATION
LEGISLATIVE ACTIVITY
HB 370 (Chapter 226)/SB 313 (Chapter 225)
Workers' Compensation - Anne Arundel County Deputy Sheriff
• Specifies that, in Anne Arundel County, the deputy sheriff is
eligible for enhanced workers' compensation benefits for a
permanent partial disability
20. WORKERS’ COMPENSATION
SB 139 (Chapter 184)
Health Care Practitioners - Prescription Drug or Device
Dispensing - Medical Facilities or Clinics That Specialize in
Treatment Reimbursable Through Workers' Compensation
Insurance
• Requires dentists, physicians and podiatrists that primarily
treat workers’ compensation patients to obtain a dispensing
permit in order to dispense a prescription drug or device
• Removed an existing exemption
21. WORKERS’ COMPENSATION
HB 1330 (Chapter 676)
Workers' Compensation - Insurance Coverage - Employer
Compliance
• Modifies procedures for the Workers’ Compensation
Commission to enforce requirement that employers secure
workers' compensation insurance for covered employees
• Alters the penalty for noncompliance not to exceed $10,000
to be paid to the Uninsured Employers' Fund
• Establishes liability for companies who are unable to pay
any fine which is imposed upon them
22. WORKERS’ COMPENSATION
SB 65 (Chapter 16)
Workers' Compensation - Claim Processing - Electronic
Delivery of Decisions
• Authorizes the Workers' Compensation Commission to send
copies of its decisions and orders electronically if the party's
attorney of record or, if unrepresented, the party itself
consents
23. WORKERS’ COMPENSATION
SB 80 (Chapter 177)
Public Health - Prescription Drug Monitoring Program Disclosure of Prescription Monitoring Data
• Adds the Division of Drug Control to the list of entities to
which the Prescription Drug Monitoring Program must
disclose prescription data
24. WORKERS’ COMPENSATION
HB 1389/SB 914
Workers' Compensation - Reimbursement for Drugs - Fee
Schedule and Requirements
• Introduced on behalf of the national workers' compensation
insurers who were seeking to establish a fee schedule to
address the issue of physician dispensing prescriptions to
workers' compensation patients
• On the heels of an effort, in 2011 and 2012, by the Workers'
Compensation Commission to promulgate regulations in
same vein
• Called for the Commission to develop regulations using the
manufacturer's average wholesale price for prescriptions in
this setting
25. WORKERS’ COMPENSATION
HB 174/SB 247
Workers' Compensation - Payment for Physician-Dispensed
Prescriptions - Limitations
• Did not pass, but very important
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Sought to address the ongoing problem of physicians
dispensing prescriptions in their offices to workers'
compensation patients
Originally limited the insurers' or employers' liability for
such prescriptions to 72 hours after first consultation
Amended to limit liability to 30 days after first consultation
Goal of educating the respective committees was met
26. WORKERS’ COMPENSATION
HB 959
Workers' Compensation - Retaliation by Employer Prohibition
• Would have prohibited employer from retaliating in any way
against a covered employee because employee files claim
for workers' compensation
• Would have authorized a covered employee who is
aggrieved by a violation to bring civil suit against employer
• Supported by trial bar
• Referred to interim study by House Economic Matters
27. WORKERS’ COMPENSATION
HB 955 (Chapter 394)
Task Force to Study Temporary Disability Insurance Programs
and the Process for Assisting Individuals with Disabilities at
Local Departments of Social Services
• Study benefits available under State and Federal law to
people who become disabled due to non-work related
illness or injury
• Study wage replacement benefits available
• Make recommendations for temporary disability insurance
program in Maryland
28. WORKERS’ COMPENSATION
HB 1314/SB 681
Workers' Compensation - Insurance Coverage - Employer
Compliance
• Sought to delay by two years effective date of changes to
the medical presumptions for firefighters and related
personnel to allow medical expert to conduct study on
presumption issue
• Expect issue of presumptions for firefighters and other
emergency personnel to be ongoing debate
29. WORKERS’ COMPENSATION
Workers’ Compensation Commission
Stability
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One of the strongest systems in the country
Forward thinking Commission
Commissioners routinely reappointed
No regulatory complaints against insurers in the WC arena
Audits of insurers and self-insurers going well
30. WORKERS’ COMPENSATION
REGULATORY ACTIVITY
Regulatory Re-write
Statutorily required non-substantive review of regulations
• Held preliminary hearings on draft regulations
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WCC pulled regulations to revisit with new AAG
Expected to be completed by end of year
31. 2014 STATE ELECTIONS
Gubernatorial
• Lt. Governor Anthony G. Brown
• Democrat
• Former Delegate from Prince George’s County
• Ken Ulman (Lt. Governor Candidate)
– Howard County Executive
32. 2014 STATE ELECTIONS
Gubernatorial
• Attorney General Douglas F. Gansler
• Democrat
• Montgomery County State’s Attorney
• Has not announced Lt. Governor Running Mate
36. 2014 STATE ELECTIONS
Attorney General
• Brian Frosh
• Chair of Senate Judicial Proceedings Committee
• Senator from Montgomery County for 18 years
• Practicing attorney for 37 years
37. 2014 STATE ELECTIONS
Attorney General
• Jon Cardin
• Delegate from Baltimore County since 2003
• Name recognition
• Practicing attorney for 12 years
38. 2014 STATE ELECTIONS
Attorney General
• C. William (Bill) Frick
• Delegate from Montgomery County since 2007
• Practicing attorney for 13 years
39. 2014 STATE ELECTIONS
Attorney General
• Aisha Braveboy
• Delegate from Prince George’s County since 2007
• Practicing attorney for 13 years
41. 2014 STATE ELECTIONS
Maryland General Assembly
• Over 38 current members will not maintain
current seats
• Over 20% of the Legislature
42. 2014 STATE ELECTIONS
Maryland General Assembly
• Senate Finance Committee
• Major changes
• 4 out of 11 leaving
• Chairman Thomas McClain (“Mac”) Middleton
• Democrat, District 28, Charles County
• Should be safe despite changing demographics
• Vice Chairman John Astle
• Democrat, District 30, Anne Arundel County
• Should be safe
43. 2014 STATE ELECTIONS
Maryland General Assembly
• Rob Garagiola
• Democrat, District 15, Montgomery County
• Former Majority Leader
• Resigned as of September 1, 2013
• Barry Glassman
• Republican, District 35, Harford County
• Running for Harford County Executive
• Unopposed
• Delores Kelley
• Democrat, District 10, Baltimore County
• Tougher than normal race due to redistricting
44. 2014 STATE ELECTIONS
Maryland General Assembly
• Allan Kittleman
• Republican, District 9, Carroll & Howard Counties
• Running for Howard County Executive
• Katherine Klausmeier
• Democrat, District 8, Baltimore County
• Should be safe
• Jim Mathias
• Democrat, District 38, Somerset, Wicomico & Worcester
Counties
• Should be safe, although had tough race to get the seat
45. 2014 STATE ELECTIONS
Maryland General Assembly
• E. J. Pipkin
• Republican, District 36, Caroline, Cecil, Kent & Queen
Anne's Counties
• Resigned August 2013 to pursue master’s degree in sports
management
• Catherine Pugh
• Democrat, District 40, Baltimore City
• Should be safe
• Victor Ramirez
• Democrat, District 47, Prince George's County
• Should be safe
46. 2014 STATE ELECTIONS
Maryland General Assembly
• House Economic Matters Committee
• Significant change
• 8 out of 23 leaving House of Delegates
• Chairman Dereck Davis
• Democrat, District 25, Prince George's County
• Should be safe
• Vice Chairman David Rudolph
• Democrat, District 34B, Cecil County
• Should be safe
47. 2014 STATE ELECTIONS
Maryland General Assembly
• Charles Barkley
• Democrat, District 39, Montgomery County
• Should be safe
• Benjamin Barnes
• Democrat, District 21, Anne Arundel & Prince George's
Counties
• Should be safe
• Aisha Braveboy
• Democrat, District 25, Prince George's County
• Running for Attorney General
48. 2014 STATE ELECTIONS
Maryland General Assembly
• Emmett Burns
• Democrat, District 10, Baltimore County
• Not seeking re-election
• Galen Claggett
• Democrat, District 3A, Frederick County Counties
• Running for Mayor of Frederick
• Brian Feldman
• Democrat, District 15, Montgomery County
• Filled Senator Garagiola’s vacated seat
49. 2014 STATE ELECTIONS
Maryland General Assembly
• Jeannie Haddaway-Riccio
• Republican, District 37B, Caroline, Dorchester, Talbot &
Wicomico Counties
• Running for Lieutenant Governor on Republican ticket
• Stephen Hershey
• Republican, District 36, Caroline, Cecil, Kent & Queen
Anne's Counties
• Filled Senator Pipkin’s vacated seat
• Tom Hucker
• Democrat, District 20, Montgomery County
• Should be safe
50. 2014 STATE ELECTIONS
Maryland General Assembly
• Rick Impallaria
• Republican, District 7, Baltimore & Harford Counties
• Should be safe
• Sally Jameson
• Democrat, District 28, Charles County
• Tough race as a result of changed demographics
• Ben Kramer
• Democrat, District 19, Montgomery County
• Should be safe
51. 2014 STATE ELECTIONS
Maryland General Assembly
• Mary Ann Love
• Democrat, District 32, Anne Arundel County
• Seeking re-election?
• Brian McHale
• Democrat, District 46, Baltimore City
• Not seeking re-election
• Warren Miller
• Republican, District 9A, Howard County
• Should be safe
52. 2014 STATE ELECTIONS
Maryland General Assembly
• Sonny Minnick
• Democrat, District 6, Baltimore County
• Not seeking re-election
• John Olszewski, Jr.
• Democrat, District 6, Baltimore County
• Running for Norman Stone’s Senate seat (retiring)
• Steve Shuh
• Republican, District 31, Anne Arundel County
• Should be safe
53. 2014 STATE ELECTIONS
Maryland General Assembly
• Kelley Schulz
• Republican, District 4A, Frederick County
• Should be safe
• Donna Stifler
• Republican, District 35A, Harford County
• Running?
• Should be safe
• Michael Vaughn
• Democrat, District 24, Prince George's County
• Should be safe