An expansion of the requirement to submit to blood and breath testing in the event of an auto accident that leads to injuries and a move – once again – to allow the Maryland Automobile Insurance Fund to accept premiums on an installment payment basis have been introduced in the Maryland General Assembly.
Senate Bill 735 authorizes a premium finance company to enter into a premium finance agreement that includes the costs of a motor club membership. The bill also alters the method by which a finance charge in a premium finance agreement is calculated. The bill increases the amount of a cancellation charge and the ceiling of a delinquency and collection charge. The bill alters the circumstances in which a premium finance agreement may require an insured to pay a cancellation charge.
SB 735 would take effect June 1, 2013.
According to the fiscal note filed with the bill, Maryland’s top court held in 2011 that the application of the “Rule of 78s” by several of the state’s largest premium finance companies to calculate the amount of interest due violated the requirement that a premium finance company can not charge more than 1.15% for each 30-day period. As 97% of MAIF’s policyholders reportedly use a premium finance company, the bill could have a significant impact on these policyholders.
There are no prior introductions of the bill and there is no companion bill in the House.
Senate Bill 736 would prohibit a person from directly or indirectly compensating, or offering or promising to compensate, an insured for all or part of an insurance deductible under a policy as an inducement to contract to furnish goods and services. Violation of the bill would be a fraudulent insurance act, subject to criminal penalties. While there is no current state law prohibiting a person from offering to pay a deductible as inducement to contract for goods or services, according to the fiscal note filed with the bill, there are laws against a specified insurer or insurance producer offering premium rebates. Paying, or offering to pay, an insured’s deductible is insurance fraud in several states.
There are no prior introductions for SB 736. The companion bill in the House is HB 763.
Senate Bill 803 authorizes a motor vehicle insurer to offset benefit payments paid under personal injury protection (PIP) coverage against payments paid under uninsured or underinsured motorist coverage if damages are incurred for the same elements of loss in an action for uninsured or underinsured motorist coverage arising out of the same accident or occurrence as an action for PIP coverage. There are no prior introductions of the bill. The companion bill is HB 764.
Senate Bill 850 expands the type of injury that applies when a person, as directed by a police officer, is required to submit to a test of blood or breath, or both, after being involved in a motor vehicle accident. If the police officer detains a person because the officer has reasonable grounds to believe that the person committed an alcohol- and/or drug-related driving offense and the accident resulted in an injury to another person that requires sending the other person to a medical facility, then the detained person is required to submit to a test after being told to do so.
Under current law, a person must submit to a blood or breath test if the person is involved in a motor vehicle accident that results in death or life-threatening injury to another person and the police officer has reasonable grounds to believe that the person was driving or attempting to drive while under the influence of alcohol, impaired by alcohol, impaired by drugs or impaired by a controlled dangerous substance. Maryland is one of 15 states that have criminal sanctions for refusal to submit to a test for drivers age 21 and older.
There are no prior introductions of the bill. The companion bill in the House is HB 627. A hearing is scheduled in the Senate for March 21.
Senate Bill 930 authorizes the Maryland Automobile Insurance Fund (MAIF) to accept premiums on an installment payment basis on 12-month personal lines policies if specified requirements are met and the Insurance Commissioner provides approval. The bill does not apply to policies and contracts issued by MAIF before October 1, 2013.
MAIF provides automobile liability insurance to Maryland residents who are unable to obtain policies in the private insurance market. MAIF may not provide directly or indirectly for the financing of premiums or accept premiums on an installment basis. A premium owed to MAIF may be financed by a premium finance company registered with the Insurance Commissioner. As a result, policyholders who are unable to pay their total insurance premium in advance must use a premium finance company. The policyholder enters into a premium financing agreement, where the premium finance company pays the policyholder’s total premium to MAIF and the policyholder agrees to repay the loan with finance charges and service fees in installments. The District of Columbia, Delaware, Virginia, and Pennsylvania each have a direct assignment system in which applicants who cannot obtain insurance in the voluntary market are shared equitably among all insurers licensed to write automobile insurance. Each of these jurisdictions allows the payment of premiums on an installment basis.
Similar bills were introduced in the Maryland General Assembly in 2011, 2008, 2007, 2006 and 2005. So far, a companion bill has not been introduced.
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